Home Advertise Contact Blog Advertiser Login RSS
Newsletter Signup

Buy A Business Opportunity of Franchise
Home-Based Businesses
Choosing a Business Opportunity Growth and Profit Marketing and Sales
Plans and Goals Running Your Own Business Start-Up
Working From Home Entrepreneur Exchange Feature Articles
Opportunity Community Opportunity Focus In The News

Happy first day of December! It’s December and the end of the year is in full-swing. Don’t go into the holiday travel season without the December Book-of-the-Month: Business Adventures by John Brooks.

December means that its holiday time. No matter what holiday you celebrate it’ll...

Female celebrities are breaking the stereotypes of Hollywood and diving into the world of business. Check out how these women are using their fame, fortune, and power to start their own companies. From media production to makeup, these Top Female Celebrity Business Owners are doing it all!

As...

With only a few weeks lefts in 2017, it’s time to get organized now! The holidays are around the corner and you don’t want to be scrambling at the end of the year. Use these Small Business Organization and Tax Tips to End 2017 to help you keep the end of the year stress to a minimum.

Happy...

Sponsors

STARSCAPES®
Imagine making up to $500 to $1,800 a day! Call or click now see how you can get your business for FREE! (602) 679-0257
Promotional Products Home Business
Run Your Own Business. Be Your Own Boss. Earn Great Profit Potential. Start At A Low Cost. Try It For Free! Learn More.
Residual Income Business Opportunities
Residual Income is the way that you work once and get paid multiple times—sounds great!... Read On
Top 7 Reasons to Consider a CMS
The internet loves obscure abbreviations. You can skip over most of them, but not CMS. What is CMS? read on...
The Ideal Length of Everything Online, Including Social Media Posts
When one of your busiest marketing channels limits you to 140 characters, you know that the internet sets its own rules.
Low Cost Business Opportunities to Own
Are your right for a Low Cost Business Opportunities to Own? The desire to own your own business... Read On
Why Advertise Your Business Opportunity?
Over the years we have been fortunate enough to receive quite a few testimonials. In fact, ... read on
National Property Inspections
Flexible work schedule, no experience needed, and complete training and support available!
How Many Leads Does It Take To Close A Sale?
This Featured Article is live on our blog and I know could be very insightful for connectivity and ROI.
Top 50 Home-Based Business Ideas
Home-Based Business ownership can be the most rewarding endeavor you will ever undertake. The new year... Read On
I Want To Buy a Business Opportunity or Franchise
Who are the types of people who buy a business opportunity or small franchise? According to people in... Read on
Copying & Publishing Business Opportunities
Today creativity abounds in the printing and publishing space with more unique business solutions than ever imaginable.
 
Resource Center > Article
To Hire A Home-Based 1099 Or Not To Hire A Home-Based 1099? What You Don’t Know Can Cost You Big!
Share this Article:

With every venture large and small there comes a time when you can’t do it all. It’s at this juncture, as you are  reaching a critical mass, that you can potentially make a tremendous costly mistake that can come back to haunt you for many a moon.

Many home-based business owners start out on their own to break free from corporate America and enjoy the feeling of success derived from the fruits of their own labor. Being your own “everything” from CEO to janitor is truly a great feeling. Then something happens–growth. With growth comes a myriad of new challenges that one person can no longer tackle alone. Once you’ve past the start-up phase and move into the growth-phase you need to hire some help.

At this phase of your home-based business you need to make a plan and ask yourself what kind of help you require and how is it going to aid you to maximize your productivity & profits. Do you need someone to answer the phone or someone to do your payables, receivables, and
 everything else in between? Or do you need someone to perform your marketing? At this critical juncture you need to consider not only whom to hire and where to place ads on web sites or in print, you need to decide just what type of hire will it be. Will this new person be a full-time or part-time employee or should you consider hiring an 
Independent Contractor, also known as a “1099”?

When you hire an employee you need to address the additional costs associated with doing so. You must consider Federal and State taxes, social security taxes, and any number of additional taxes that can make your head spin. A good accountant will come in very handy at this point to aid you in making your decision. You also need to consider where your new employee will be working and what they will use as furniture and business equipment. If you’ve grown from the coffee table into your spare room do you have enough space for a second person? As you can see, hiring a second person can be more taxing, time consuming, and costly than you first have thought.

Here is where the story gets even more tricky. As a rule of thumb, when hiring an employee you should usually estimate costs at roughly 30% over the wage you will be paying them. So, if you thought you’d pay your new hire $14 per hour, your true cost will most likely be upwards of $18 to $20 per hour.

And before you think that hiring a 1099 will make those extra costs magically disappear, consider that while 1099’s  do afford you more flexibility, they usually charge more for their services. While hiring a contractor can ease the tax burden associated with having an employee, this flexibility for your now growing home-based business can come at a high price if this step isn’t well thought out.

Definition of a 1099 Independent Contractor

It’s very important to understand what a a 1099 is. Basically, a 1099 is an individual or business that provides services to another individual or business. A 1099 is a separate business entity and is not considered an employee. Some examples of 1099’s are consultants, agents, brokers or web designers. If you hire a maintenance company to paint your home office, the company is a 1099. The IRS has established a test which can help you determine whether a worker is a 1099 or an employee.

1099 Contractor

Disadvantages of Hiring a 1099

The main disadvantage of hiring a 1099 is miss-classification. Miss-classification is by far the biggest mistake you can make in this arena of hiring help. If you simply label said new hire as a 1009 that isn’t enough. They must actually be a 1099. 

If you do miss-classify an employee as a 1099, you
 might be subject to potentially huge IRS penalties such as back-taxes and interest. You might also risk exposure for an audit if your so-called 1099 attempts to file for unemployment 
benefits upon their termination. In such 
situations, you'd better be able to protect yourself by proving that 
the arrangement was for a 1099 and not a 
employee.

Additional Food For Thought

If you do decide to go the route of hiring on a full-fledged employee you need to determine who that person really is. Doing a background check for roughly a hundred dollars or so might be the best money you’ve spent in a long time.

 

Related Blog Posts

Have you always wondered about running a home-based business? Are you looking for tips to make your home-based business a success? Look no further! Check out these tips and business opportunities!

Running a home-based business may seem like it’s all fun and games, but it can be tough. People...

These four top companies are giving back this holiday season to help women in need and foster entrepreneurship among women. Check out these companies donating to empower women and how your company can do the same!

The end of the year is approaching and companies are looking to donate to the...

As we enter the holiday season, we’re getting excited to celebrate the holiday and catch up with friends and family for some much-needed rest and relaxation. This can be tough for the home-based business owner or entrepreneur. To help you manage it all, we’re bringing you our 6 Tips to Balance...

Buying a computer for your business is a big decision. Don’t take it lightly! To help, we’re sharing our tips to Choosing the Best Business Computer.

If you’re thinking about buying a computer for your business, please read this, PLEASE! Buying a computer is one of the most important business...

Feeling overwhelmed with being a mom and an entrepreneur? We got you covered with our Success Advice for Mom Entrepreneurs!

Being a mom is a full-time job itself. It is no secret that children require a lot of attention. This can be tough if you are trying to start or run your business from...
 
   

I had the pleasure of chatting with Shawn Pigg, CEO of Hotels Etc. for BusinessOpportunity.com's Podcast series that will be released very soon on our new Digital Platform.  Here is the transcript from that call for our regular RSS feed subscribers who get all of our posts first.

If you would...
Read More


Premium Sponsor