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1099 vs hiring
etcSudoers
Member
in General
I run a solo-gig MSP shop. The money has been fine, and work steady.
By word of mouth my client list is growing, and existing clients are starting to have greater demands. That's great -- More $$$!
However, I foresee in the next few months I might need to consider spreading this work out a little to another person. So I figured I might ask here, as I am guessing there are a few people similar to me, should I hire someone or contract them out as 1099?
I do not know squat about accounting -- I only know how to manage my personal sales and use taxes, and pay the government their cut.
Thoughts?
Comments
A 1099 contractor would save you the employer's share of Social Security and Medicare, but the situation needs to conform to the IRS 20 factor test or they will nail you for these taxes along with penalties and interest.
Typically, you've got a valid contractor if they: provide their own equipment, set their own hours, do contract work for others, work at their own location, and make their services available to the general public. Other factors can substitute for these, but ultimately it has to pass the smell test.