How to properly pay my employee?

[phaz0rz]

So, here's my situation. My success on eBay the past few years has thrust me into the position of "small business owner" a bit unprepared. I've learned tons about eBay Stealth and am bringing in decent money from several stealths. But I'm fairly uneducated about dealing with the government and some other financial aspects of my operation.

Please do not respond telling me to talk to an accountant. I plan to, I just can't at the moment.

My wife is currently my only employee, and I've been paying her cash to do my shipping for the last 3 months. I write a receipt for documentation purposes, but I know that's not enough. The BoA account I use for my stealth's is a personal account so I can't currently write a business check. My business is registered with my state so I could change the type of bank account if needed.

I guess my question to anyone experienced in paying small-business employees would be, should I upgrade the BoA account to a business acct? If I did upgrade, would I be able to write a standard payroll check with the proper deductions? Or, could I continue as I'm doing and have my wife file a 1099?

Any input would be appreciated here. I'm not looking for condescension from senior members, and I do not consider myself stupid..

[GreenBean]

Nice you are in a position to have an employee.

My advice is just this. Introduce yourself to this site

https://www.irs.gov/


Also check your State small business bureaus and your State's tax employment requirements.

Form a picture of where you may go with this business. Check in with an accoutant as soon as possible.

Good Luck

[phaz0rz]

Thank you Greenbean. I know it was a bit of a broad/poorly formatted question, but I certainly appreciate your insight.

If anyone else has any experience in this realm, please feel free to chime in. I suppose my first step would be consulting BoA and a tax accountant. I was just curious if anyone else has ever been in a similar situation.

[GreenBean]

Many of us have.

This is like how long is a piece of string. Because all of our circumstances differ, users need to consider all options.

EG, I have some Oregon based business accounts purely for state sales tax benefits.