My client has no employees but needs someone between now and the end of the year. Would be my clients only employee. I know enough about payroll taxes to probably make me dangerous but its my understanding there are forms like 940, 941 then W-2...I am probably missing something. The client files a Sch C using his SS#, no EIN. Does my client need a EIN for 940, 941 & W-2 forms or can my client use their SS#? Any and all help would be appreciated.
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Employment taxes will require an EIN. -
He can obtain the EIN online in about 10 miniutes. He will probably need to register with the state for withholding taxes as well. He will need to file 941, state withholding, 940, W2, etc. Depending upon total payroll, he may need to file state unemployment taxes as well."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Check your state's requirements for workers comp. insurance also. You are entering a whole new world here. Read up over the holidays.Comment
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Consider..
Whether your client can delay paying the new employee until Jan 1, 2011 (semi-monthly payroll perhaps, with the employee not starting until Dec 16th and paid 1/1/11 hey, that's a cool date). Payroll is date sensitive to when the check is cut, NOT when the work is done. That would eliminate the need for any forms for this year. And give you time to get all the paperwork in order, including getting set up for EFTPS (as Form 8109's for payroll tax deposits are no longer acceptable). What state are you dealing with?Comment
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Client is in AZ and other details
I believe the 940, 941 and W-2 are Fed forms, correct? AZ then must have it own form, if so anyone know what that form number is?
Also, the gross wage will be about $6000 for all of 2010 but earned roughly Dec 15th thru Dec 30th.
Any thing I left out that may help?Comment
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In NC the $6,000 in a single quarter would automatically make the employer eligible for registering and paying unemployment tax (in addition to the other withholdings & SocSec/FICA matching). I don't know AZ law, but I strongly suspect it's the same there.
I expect others will chime in who know more about AZ specifically, but here's your link for withholding questions:
And here's your link for unemployment taxes:
https://www.azdes.gov/landing.aspx?id=4214Last edited by JohnH; 12-14-2010, 09:07 AM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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If they are only going to have 1 employee he might want to consider a temp service. Most have a temp to hire provision if he likes someone. Having a regular employee for odd hours is a hassle.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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Temp agency
Contract with a temp employment agency and he doesn't have to mess with the employment laws. There's not enough time before the end of the year for him jump through all the hoops to hire, the workers' comp insurance MUST be in place BEFORE he hires anyone. He'll pay a little more for the service but the temp agency is the only way to go."A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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AZ has a real good web site where you can get a copy of the application. It is a Joint Application for the Use Tax and Payroll Taxes.
Payroll is a very complex issue, and the penalties are very large. I think you need to make a decision on whether you want to do payroll or not. If you are going to be serious about payroll, learn what you are doing, and then go and get more payroll accounts. It is a good money maker.
If you don't want to do it, then suggest that they contact their bank. Most banks are set up and are anxious for the business. I also understand they can get better rates for Unemployment and Workman's Comp. From what I have seen they are not to expensive. There are also companies that do only payroll.Comment
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