Hiring Workers
- Employer's Obligations When Hiring Workers
- Classifying Workers
- State New Hire Registry
- Advance Earned Income Credit
- Worker's Compensation Insurance
- Federal Employment Taxes
- Employment Eligibility Verification
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- Business Structures
- Start-up Costs
- Depreciation
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- Home Office Deduction
- Travel Expenses
- Hiring Workers
- Meals and Entertainment
- Retirement
- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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Classifying Workers
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What Are Statutory Nonemployees?
A statutory nonemployee is defined by law and is treated as self-employed for all federal tax purposes, including income, social security, and Medicare taxes.
Statutory Nonemployees Include:
- Direct sellers
- Qualified real estate agents
- Certain companion sitters
Withholding Taxes
A statutory nonemployee is not subject to tax withholding.
Do not issue Form W-2 to statutory nonemployees.
Schedule C and Self-Employment Taxes for Statutory Nonemployees
A statutory nonemployee reports income and expenses on Schedule C just like a sole proprietor. Net profit (or loss) is carried to Form 1040.
Since no social security or Medicare taxes are withheld from a statutory nonemployee's income, these taxes must be paid by the statutory nonemployee via self-employment taxes (Schedule SE).
Schedule C and Schedule SE are filed along with Form 1040.
Related Links
- Employee or Independent Contractor?
- Types of Workers
- Employee Defined
- What Are Common Law Employees?
- Not Sure How to Classify Someone?
- What Are Statutory Employees?
- Withholding Taxes for Statutory Employees
- Statutory Employees Have Two Options for Reporting Income
- What is the Earned Income Credit?
- Advance Earned Income Credit Payments
- Form W-5
- Maximum Advance Earned Income Credit Payment
- Withholding Taxes
- Advance Earned Income Credit Payments Treated as Tax Deposits
- How Advance Earned Income Credit Payments are Provided to Employees
- Reporting Advance EIC payments
- Answering Employee Questions About Advance Earned Income Credit Payments
- What is Workers' Compensation Insurance?
- Who is Required to Carry Workers' Compensation Insurance?
- Self-Employed Persons
- Withholding Employment Taxes
- Employment Tax Forms Used When Hiring
- Annual Employment Forms
- Employment Verification
- State New Hire Registry
Copyright © 2008-2012 Larry Villano. All rights reserved.