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single member LLC hiring freelance web designer

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Ed Kulzer
single member LLC hiring freelance web designer
on Feb 3, 2009 at 6:43:03 pm

Hi there COW; quick question from a new business-owner.

For the owner of a single-member LLC, is it necessary to get the web designer (who's constructing my LLC's website) to sign tax forms and get him a 1099-Misc at the end of the tax year?



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walter biscardi
Re: single member LLC hiring freelance web designer
on Feb 3, 2009 at 7:42:02 pm

Yes on the W9 to fill out for you and yes on the 1099 if they go over the amount required.

Here in Georgia it's something like $900 I think. Anything under that for the year does not require a 1099.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

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Trey Gregory
Re: single member LLC hiring freelance web designer
on Feb 3, 2009 at 7:56:00 pm

Ed-

There are 2 main ways to pay people from your company. Unless you want to take out and pay taxes for your web designer, I would recommend paying them as a contractor. To do this, you need to do the following.

1. Have them fill out a W9. (like Walter recommended) We do this for ANYONE we pay, even if it's only a small gig.

2. Write them a check and keep tabs on how much money you pay them.

3. At the end of the year, before Jan 31st. Get the total of all the contractors that you paid. If you paid any 1 of them more than $599.00(for the year 2008) the government requires that you report the payment of that contractor when you do your taxes.

4. Send a 1099-misc to all individuals who you paid more than that year's threshold.

A few things to keep in mind. If the person you are paying has an EIN and not an SSN, then you DO NOT have to 1099 them. They are responsible for reporting their own income to the gov't and it's no longer your problem.

That being said, we use an CPA to prepare and pour over our books at the end of each year....I would recommend you do the same, even if you just have them look over your work and double-check it.

Trey Gregory
ECG Productions - Atlanta
HD Production and Post
http://www.ecgprod.com


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Rich Rubasch
Re: single member LLC hiring freelance web designer
on Feb 3, 2009 at 11:03:33 pm

One clarification....in Wisconsin EVEN if they have an EIN but they are an LLC we have to issue a 1099 at the end of the year. Only Corporations are exempt from receiving 1099s in Wisconsin.

Check your state laws...isn't business ownership fun?

Rich Rubasch
Tilt Media Inc.



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walter biscardi
Re: single member LLC hiring freelance web designer
on Feb 4, 2009 at 12:20:19 am

[Rich Rubasch] "One clarification....in Wisconsin EVEN if they have an EIN but they are an LLC we have to issue a 1099 at the end of the year"

Yeah, we get them from everyone too, but we don't need them. We just pass them along to our CPA but he just files them away.



Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

Read my Blog!

STOP STARING AND START GRADING WITH APPLE COLOR Apple Color Training DVD available now!


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Steve Wargo
Re: single member LLC hiring freelance web designer
on Feb 4, 2009 at 6:46:07 am

Isn't that whole thing a Federal IRS regulation or are we talking state taxes here guys?


Steve Wargo
Tempe, Arizona
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Bob Zelin
Re: single member LLC hiring freelance web designer
on Feb 8, 2009 at 4:51:26 pm

Hi Ed -
what you didn't specify is how your "web designer" operates. In most states, if you conduct a business, you must have a company name, or be an S Corporation, or a full corporation (I am a one man band, and am a full corporation). If you found a "kid" who is a brilliant web designer, but doesn't have some formal tax stuff setup (like state company papers), you can pay him up to $600 before you get into trouble. After that, he is your employee. This is always everyone's problems - you find a "cheap crew" or a "cheap graphics guy" who wants to make some extra money (that includes a seasoned professional that is on staff at a large company, that wants to make a few bucks on the side). No state tax papers - he is an employee, and it's your job and his job to prove otherwise.

Don't screw around with this stuff. I have seen guys get screwed becuase a grip filed for unemployment insurance, and they went after my client who hired him as a grip for a shoot for just one day. They did a one year audit on his entire company !

Bob Zelin




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grinner hester
Re: single member LLC hiring freelance web designer
on Feb 8, 2009 at 6:09:45 pm

if he made over 600 bucks, yes.



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