Tax Season

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Working With Independent Contractors? Minimize Last-Minute Tax Headaches With These Tips
Working With Independent Contractors? Minimize Last-Minute Tax Headaches With These Tips 2560 1707 PayReel

The tax implications that come with hiring independent contractors require special considerations–both when you hire and pay workers as well as when you’re preparing for tax time. Making the right moves up front and throughout the process can minimize last-minute stress.

Minimize Last-Minute Headaches by Following These Tips When Engaging Independent Contractors

  1. Make Accurate Worker Classification a Priority: One of the foundational decisions when engaging workers is always going to be how you classify workers. This dictates how you handle subsequent details, including taxation.
  2. Collect Required Paperwork up Front: While companies don’t generally withhold taxes from independent contractors’ payments, they are required to report payments that total $600 or more during the tax year. This requires collecting W-9s from workers and filing either a Form 1099-NEC or 1099-MISC at tax time. As a part of collecting information up front, companies should confirm that each 1099 worker has an appropriate business entity and insurance policies.
  3. Keep Accurate Records: Keep accurate records of all payments–including invoices and receipts.
  4. Be Aware of State and Local Tax Laws: State and local tax laws may vary. Understand any additional reporting or withholding requirements for any state you engage workers in.
  5. Report on Time: Ensure you make payments and report them on time to avoid penalties. The deadline for issuing 1099 forms is typically in January.

When to Consider Engaging a Partner

Many companies find that outsourcing the administrative worker classification and payroll details to capable partners is cost effective and reduces stress. The right partner can also help mitigate compliance concerns and minimize last-minute tax headaches. Sound like something your company could benefit from? Contact us for a free consultation!

The Bottom Line

To prepare for tax time, any company that engages independent contractors should maintain accurate records, stay informed about relevant tax laws, and consult with tax professionals or other partners as needed.

 

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Do you know if you need to pay local taxes?
Do you know if you need to pay local taxes? 150 150 PayReel

If you don’t, it might be time to hire a payroll service.

Would you rather think about federal, state, and local (yes, local—such as in NYC and LA) taxes more or less?

A) More
B) Less

If you answered A, you have found your life’s work: Become a CPA and you can spend your days researching tax laws and perfecting the art of the deduction. We are forever grateful for tax professionals who view Schedule Cs as their signature move and audits as their national championship games.

Note: Unless you’re one of said saintly tax professionals, you’re not legally allowed to give your employees tax advice. Send them to the IRS. If you answered B, a payroll service may be the solution that gives you a whole lot less to think about when it comes to taxes.

Hiring A Payroll Service Lets You Think About Taxes Less

If you can’t (or just don’t want to) keep up with the rules and developments that happen almost yearly with federal, state, and now local taxes—PayReel can keep up for you. Not only will we research the ever-changing laws, but we will also handle W-4s, keep you compliant on worker classification, and make sure you’re paying freelancers fairly and accurately.

The Bottom Line

It’s really simple when you think about it—and even more simple when you don’t. Hire a payroll service like PayReel to save on time, fines, and headaches by taking tax management off your plate. Contact the PayReel team at 303-526-4900 or by emailing us here.

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Don’t know if your locality taxes? Might be time to hire a payroll service.
Don’t know if your locality taxes? Might be time to hire a payroll service. 4000 2668 PayReel

Would you rather think about federal, state, and local (yes, local—such as in NYC and LA) taxes more or less?

A) More

B) Less

If you answered A, you have found your calling in life. Become a CPA and you can spend your days researching tax laws and perfecting the art of the deduction. We are forever grateful for tax professionals who view Schedule Cs as their signature move and audits as their national championship games. Note: Unless you’re one of said saintly tax professionals, (which we’re not) you’re not legally allowed to give your employees tax advice. Send them to the IRS.

If you answered B, a payroll service may be the solution that gives you a whole lot less to think about when it comes to taxes.

 

Here’s how to think about taxes less

If you can’t (or just don’t want to) keep up with the rules and developments that happen almost yearly with federal, state, and now local taxes—PayReel can keep up for you. Not only will we research the ever-changing laws, but we will also handle W-4s, keep you compliant on worker classification, and make sure you’re paying freelancers fairly and accurately.

 

The bottom line:

It’s really simple when you think about it—and even more simple when you don’t. Work with PayReel and save on time, fines, and headaches by taking tax management off your plate. Contact the PayReel team at 303-526-4900 or by emailing us here so you can get back to focusing on pulling off your next flawless production.

 

 

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want, when they want, and that everyone is paid properly. Leave all payroll services and details (even taxes) up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

 

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How do you keep track of all those W-4s?
How do you keep track of all those W-4s? 4928 3264 PayReel

 

The infamous W-4 might seem like a simple little piece of paper on the surface, but it’s how employers calculate tax withholdings. And unfortunately, it has the less-than-magical power to multiply exponentially when you execute live events, produce multimedia content, or just simply employ a whole lotta people.

 

Here’s why W-4s are so dang hard to keep track of:

1. They’re subject to change without warning

This is one of those documents that employees can change as often as they want. Maybe they got married or moved to a new address. Or, maybe they change their mind about the number of allowances they want to claim every month. Whatever the reason for the change, employers must implement changes within 30 days of receiving new paperwork. That’s a lot of uncertainty combined with a lot of time updating records.

 

2. The battle continues: State versus federal

Some states use their own unique W-4s, some just default to the federal W-4, and some even call them by another name entirely. Some states (Here’s lookin’ at you, Nevada!) don’t even tax while others have a slightly more complicated approach than usual. For example, in California, if an employee has more than 10 exemptions, their W-4 needs to be sent to the federal government for verification. Any other place, if an employee needs more than 10 exemptions, they’ll need a lock-in letter from the IRS. To top it all off—any of this could change at any time.

 

3. Employee mistakes cost YOU time

When the state or federal government does an audit on individual taxes and discovers someone has been withholding incorrectly (usually it happens when an employee claims exempt), the government sends a letter to the employer requesting the corrected paperwork. Did we mention that the tax filing process could cause uncertainty and eat up your time…?

 

The bottom line:

Even if you hired an employee for a single event or just one day last year, you still have to have the correct W-4 for them. Whether you don’t know how to keep track of the W-4 du jour, aren’t sure how to get your hands on the right documents, or you just simply don’t have the time; PayReel can save you the headache by taking tax management off your plate. We can make all that hands-on paper-collecting and tax management a distant memory—including keeping you compliant. In the wise words of Forrest Gump, “Well that’s good. One less thing.”

 

One more thing: There are certain career paths (like tax lawyering) that really require a special type of person. Unless you’re one of those, (which we’re not) you’re not legally allowed to give your employee’s tax advice. Send them to the IRS.

 

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave all payroll services and details (even taxes) up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

 

payroll services payreel Rubiks
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Is preparing for April 15 a pain in your tax? We can help.
Is preparing for April 15 a pain in your tax? We can help. 3502 2334 PayReel

Doing taxes is as challenging as solving a Rubik’s cube but without any of the fun. Also like a Rubik’s cube, there are endless ways to get it wrong. For individuals, getting taxes wrong can be painful, but the stakes are even higher for businesses.

One of the biggest challenges we’re seeing for businesses right now is the rise in the popularity of local taxes. Since most state W-4s don’t list such taxes directly, employees and employers are left to find out about changes through trial and error (yikes!). New Yorkers: Take heart. Yours is the one state that has localities listed on the W-4s and allows employees to claim different deductions on the local, state, and federal levels.

No matter where you are, it’s a lot to think about.

 

Would you like to think less about taxes? Here’s how hiring PayReel can help: 

As the employer of record, we’re responsible for taxation. That means you can save yourself some time and headache. We handle it all. We keep addresses up to date, send out W-4s, and make sure your workers are classified correctly so you give them the correct forms. We also make sure you’re using the right W-4 for your state and keep track of the federal, state, and local taxes.

Hand over the Rubik’s cube. We’re like this guy.

 

One more thing: There are certain career paths (like tax lawyering) that really require a special type of person. Unless you’re one of those, (which we’re not) you’re not legally allowed to give your employee’s tax advice. Send them to the IRS.

 

About PayReel

Producing multimedia content and executing live events is chaotic. At PayReel, we make sure our clients are able to hire who they want when they want and that everyone is paid properly. Leave all payroll services and details (even taxes) up to the PayReel team so you can focus on pulling off a flawless production. Contact us anytime at 303-526-4900 or by emailing us here.

Relax. We got it.

 

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