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Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers

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🧾 Day 13: What to Know About 1099-NEC & Contractors: A Simple Guide for Businesses and Freelancers In today’s flexible work landscape, hiring independent contractors can be a smart move—offering agility without the long-term commitments of traditional employment. But with this freedom comes responsibility, especially when it’s time to tackle tax forms like the 1099-NEC . Let’s break down what you need to know about using this form and working with contractors, without the tax jargon overload. πŸ“Œ What Is the 1099-NEC? The 1099-NEC (Nonemployee Compensation) is an IRS form used to report payments made to nonemployees for services. It replaced the old use of Form 1099-MISC for service payments starting in 2020 . You’ll need to issue this form if you paid: $600 or more in the calendar year To an individual or business not classified as an employee For services (not products or rent) Who is not incorporated—i.e., a sole proprietor or LLC taxed as such It goes to both t...
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Do I Need to Pay Myself a Salary as a Business Owner?

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  πŸ’Ό Do I Need to Pay Myself a Salary as a Business Owner? One of the most common questions solo entrepreneurs ask once their business starts generating consistent income is: "Should I pay myself a salary?" The answer depends on your business structure—and choosing the right approach can impact both your tax liability and legal compliance . πŸ‘€ If You're a Sole Proprietor or Single-Member LLC Good news: You don’t need to pay yourself a formal salary. In these structures, the IRS treats you and your business as the same entity. This means: You take an owner’s draw , not a salary. All profits flow through to your personal tax return via Schedule C . You're not considered an employee, so no payroll taxes or W-2s are involved. But remember: You’re still responsible for self-employment tax (which covers Social Security and Medicare), so setting aside about 25–30% of profits for taxes is a smart move. 🏒 If You're an S Corporation Here’s where thi...
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Hiring a Remote Employee in Georgia: What You Must Know About Payroll Compliance

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  πŸ“Œ Hiring a Remote Employee in Georgia: What You Must Know About Payroll Compliance As remote work becomes more common, many small business owners find themselves navigating complex payroll requirements across state lines. If you hire a remote employee who lives and works in Georgia , there are critical compliance steps you must take — even if your business is located in another state. In this post, we'll walk through exactly what you need to do — and when foreign business registration might be required. πŸ“ The Scenario You’ve just hired your first remote employee who lives in Georgia . What does that mean for payroll taxes? ✅ Step 1: Register for Georgia State Payroll Taxes Even though your business is not located in Georgia, you are still responsible for complying with Georgia’s tax laws if your employee performs work there . That means: 1. Georgia Income Tax Withholding You must: Register for a Georgia Withholding Tax Account through the Georgia Tax Center Wit...
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