What's the difference between an employee and an independent contractor?
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What's the difference between an employee and an independent contractor?
The distinctions between employees and contractors can be confusing, but it’s important to correctly classify the workers you pay. Both positions have different tax obligations for your business.
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W2 should be defined here as well as other abbreviated terms in footnotes.
Can the new contractor function in Wave produce the T5018 for subcontractors?
Thank you for the feedback @k16e !
@TDunsford I don't believe so for this current tax season, but we are working to have the requisite functionality available for tax reporting for Canadian contractors by next tax season!
I was hoping to find out who should receive a 1099-MISC form. Is it any and all contractors? Specifically, I've hired an Amish carpenter to take on some of my work. I suspect they may have an exemption.
It would be nice if there was a way to delete a comment.
Hi @Cory , here is a list of criteria for Form 1099-MISC found on the IRS website: https://www.irs.gov/forms-pubs/about-form-1099-misc
I don't see anything specific to Amish contractors here. I would advise that you reach out to the IRS for accurate advice on this. If there are any other users here who have insight into this question, we'd love to hear from you!
To delete a comment, click the gear icon to the top right of your comment, and click the Delete option.
Thanks!
@Cory,
Here is a link to the IRS 1099 requirements. I don't believe someone who is Amish would be exempt from you reporting the payments made to them. In short payments made in excess of $600 in a calendar year should be reported in box 7 of Form 1099-MISC.
https://irs.gov/businesses/small-businesses-self-employed/am-i-required-to-file-a-form-1099-or-other-information-return
Can this be used to manage overseas tech / VA contractors?
I believe if the work is performed outside of the US then it is beyond the scope of 1099 reporting. It's a whole different ballgame if the work is performed in the US by foreign individuals.
I do not pay my contractors, I set them up with work and they are paid by that person. however I charge a fee that the contractors will be invoiced for monthly. will this cause tax issues if I track them here as vendors on wave (simply for tracking purposes)?
Hey @solisolu , you'd be best reaching out to an accountant or CPA to determine the tax implications of this as they may change regionally.
How do I send my contractors an invite so they can see their paystubs online every time I pay them?
Hey @MarvinPhillips . The system doesn't generate pay stubs for Contractors as you pay them through our Bills function so you can't invite them to the system. You can screen save the Bills pages themselves if you find that this does the trick.
Is there a way to add a 1099-misc contractor without entering their EIN initially?
Is there a way to add a 1099-misc contractor without entering their EIN? contractor will not provide EIN and I stille need to submit 1099-misc to IRS.
@csiengineer,
The IRS will not accept a 1099-MISC without an EIN.
Gotcha, I e file all my client 1099's so they do not go through if there is no EIN. At this point though they are late.
Quick question: I'm serving as a marketplace platform, if I receive the payments from the buyers, how should i disburse the payment (minus commission and sales tax) to the seller?
How should I categorize international contractors? Seems "Country" is fixed to United States when Contractor>Individual is selected.
Hey there @1Haus_Collective ! Do you mind clarifying your question for me. Can you you provide a use case, potential examples using numbers, and what your invoicing patterns typically look like? This will give me a better understanding of what you are trying to action in Wave.
Hi @Citizen_of_the_World ! With Wave Payroll, I'm afraid that US businesses cannot pay employees or contractors outside of the United States. They must be in the same country. Also, the business currency must match the countries currency.
Hello,
Going back to the question @Citizen_of_the_World asked on Sept 30th, 2020
The independent contractors is in India, but they are (the business name) registered in the U.S Delaware.
Can I consider them as an independent contractor for 1099 at the end of they year? If so I can create a payroll for them. And yes I will be paying them for more than $600.
Thank you for your answer
Hey there @greenapptech !
In this case, you may be able to. However, as much as we try to help answer every question we get, this one may be better suited for an accounting professional. Our support team is trained to help you find the best way to use Wave, but this is a bit outside of what we can advise on.
You can learn more here: https://www.waveapps.com/wave-advisors and sign up for paid bookkeeping or accounting coaching from a member of Wave’s team.
You can also see what other entrepreneurs have done to solve a similar problem, or find an accountant near you in our community forum.
How should I add an overseas contractor. This person does not have a US or Canada tax payer ID. I will have him fill out a form W-8 BEN for tax purposes but how do I add him in Waveapps so as to record the payments made to him?