You can hire international employees by using an EOR (Employee of Record) or PEO (Professional Employer Organization). If you are a bookkeeper, you may want to hire another bookkeeper to handle the client work, giving you more time to grow your business. Saving money and paying estimated taxes in advance will help set you up for a more promising future.
When you need to outsource your bookkeeping to a contractor.
Setting yourself up for a more promising future will involve saving money and paying anticipated taxes in advance. Paying taxes and having precise estimates of your upcoming tax obligations are quite beneficial. Putting your estimated tax payments in each month or every three months will help you avoid a tax bill that isn’t expected. You are still eligible for the payment if you work as a hired contractor. However, generating your Employer ID Number is very advantageous.
How to hire a bookkeeper: Tips and key considerations to find the best fit
Getting paid to your personal account can be https://digitaledge.org/the-role-of-construction-bookkeeping-in-improving-business-efficiency/ too tempting to sweep it under the rug. While there are short-term benefits, like not paying taxes on that money, it is not worth being caught during an audit. If you are not diligent in separating your personal and business bank accounts, you might get paid directly to your personal account. The trade-off is that your employers do not put money towards your health insurance, workers’ compensation, bonuses, unemployment taxes, payroll taxes, or contribute to your 401(K). You will also forgo employee benefits like the Occupational Safety & Health Act (OSHA), the Fair Labor Standards Act (FLSA), and Title VII of the Civil Rights Act. As an independent contractor, you have a lot more freedom than employees of most workplaces.
What Makes Independent Contractors Successful?
Tracking the money you bring in and the money you send out of your account is essential as an independent contractor. Independent contractors need to pay the IRS self-employment taxes. Currently, that means you will pay social security 15.3%-12.4% and Medicare 2.9%. It is best practice to reach out to a CPA for construction bookkeeping advice when choosing what accounting method will work best for your independent contracting business. Everything can be too alluring to just brush it under the rug to get paid to your own account. Even if there are some immediate advantages, like avoiding having to pay taxes on that money, getting discovered during an audit is not worthwhile.
- Ever since my first bookkeeping job over the summer in 1990, I’ve been focused on helping small businesses grow by better understanding their numbers.
- Independent contractors are self-employed individuals who work for themselves and not for an employer.
- Your bookkeeper should be well-versed in popular accounting software like QuickBooks, Sage, or Xero.
- When deciding to bring in a professional or not, you may ask yourself if you can afford to.
- This is an informational form that must be submitted to the IRS in order to report non-salary income.
When you need to hire a bookkeeper as an employee.
Remember, a few negative reviews are normal, but consistent complaints are a red flag. If you’re getting 30 hours of billable work from your employee, they’re only 75% billable. In reality, 75% is generous, but we’ll use that for today’s scenario.