Wedding Videography SPP in NY Questions

[tomhangler]

Hi. I started a wedding videography business in State of New York and I need serious help as I'm a complete noob. First, my business is very small so I will hire an employee (my brother) to literally only work for me at weddings as a videographer. So he will only work for me for about 20 days a year.

So, why do I need to withhold taxes from him? Is there any way to avoid all that stupid paperwork? Can I just hire him as a "contractor", per job basis, write him a check for each job. What do I need to do in terms of paperwork for this method? Can I just write him a check for each job he does and not worry about doing all the paperwork? On his end (the employee), does he need to do any paperwork to become a "contractor"? Or can he during tax season, just claim the pay he got from me as "self-employed"?

My other question is this, is there a benefit to have my wife work for free and help me with the business, or is it better for taxes to "hire her" and pay her again, similarly to my brother.

Finally, do you guys know if I need to charge sales tax for a wedding videography business? If I don't what penalty is there for not chargin sales tax?

 

[Becky]

Unfortunately I only know about employment status issues in the UK - hopefully someone with knowledge of how it works in the USA will be along to answer your query!

In the UK, if someone is deemed to be an employee based on the facts of the situation (there are a number of indicators taken into account) then the employer must pay them as such. If they do not, then the employer is at fault and historical penalties can be charged by HMRC. However I don't know whether it is similar in the US...

 

[MasterMJ]

Hi. I started a wedding videography business in State of New York and I need serious help as I'm a complete noob. First, my business is very small so I will hire an employee (my brother) to literally only work for me at weddings as a videographer. So he will only work for me for about 20 days a year.

So, why do I need to withhold taxes from him? Is there any way to avoid all that stupid paperwork? Can I just hire him as a "contractor", per job basis, write him a check for each job. What do I need to do in terms of paperwork for this method? Can I just write him a check for each job he does and not worry about doing all the paperwork? On his end (the employee), does he need to do any paperwork to become a "contractor"? Or can he during tax season, just claim the pay he got from me as "self-employed"?

My other question is this, is there a benefit to have my wife work for free and help me with the business, or is it better for taxes to "hire her" and pay her again, similarly to my brother.

Finally, do you guys know if I need to charge sales tax for a wedding videography business? If I don't what penalty is there for not chargin sales tax?

Congrats on starting your own business! I'm sure it will be a fun and exciting ride. Please understand that the advice I am giving here is just from personal experience and should not be used as if taken from a CPA.

As you are just starting out, I suggest that you pay the "employee" as a contractor. They would be considered an independent contractor and will have to pay taxes on the income personally as if they are self-employed. Another word for this would be a 1099 contractor. At the end of the year, you would be required to send a 1099 to this contractor listed the total amounts paid throughout the year. Once they receive the 1099 there will be a place on their personal tax return where they can enter the information.

I hope this helps, and let me know if you have any more questions!