7 ms·

I'm in the US but I'll say for sure that things like this are about half the reason I haven't hired any employees for my LLC. I wish I could, but I'd be de fact

by orzig 3y ago

I'm in the US but I'll say for sure that things like this are about half the reason I haven't hired any employees for my LLC. I wish I could, but I'd be de facto hiring an accountant as well!

jweir 3y ago
If you are considering hiring and the hire is a developer or at all involved in research and experimentation make sure you are well versed in Section 174. You could be on the hook for a large tax bill since you have to write off developer expenses over 5 years – this is true whether an employee or contractor. Hopefully it will be repealed* – but if not it is one of those things that no one would expect to exist since it is in the words of Senator Wyden "stupid." https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174 * edit It won't be repealed but a law can be created to ignored it until a future date. Once on the books, because of accounting, it is very hard to remove a tax law.
- shutupnerd0000 3y ago
  My guy, you're replying to someone that said theyre not considering hiring
  - orzig 3y ago
    That's fine, I appreciate it! We're all conversing in public, and I'm sure it will be useful to someone. And besides, this information makes me even more happy with an opinion I already have - isn't that what the internet is for?
IG_Semmelweiss 3y ago
If you ever consider to, *given the remote work trends*, consider this: I'd place high importance on the employee state to the state you are hiring them out of. Some states are a nightmare to deal with. For example, NJ, CA, NY and OH. Once you are registered in X state, your company is fair game to be pursued for any kind of perceived (lack of) compliance by that state, long after that employee has left you for another job. For example, you could earn a large fine for not filing to report you have no staff in the state. States that I found were lovely to deal with were ID, TN, and TX. Generally speaking, its highly recommendable to hire employees from your state only for this reason. I would not hire unless you are absolutely needing to.
- pnw 3y ago
  I got a notice for unpaid back taxes from some state agency in California for a company that had been sold over a decade earlier, merely because we had one part-time employee in California for a few months.
- newZWhoDis 3y ago
  This. I never hire anyone from NY or CA out of principle.
jjeaff 3y ago
As far as calculating payroll and remitting payments to the proper agencies federally and in their respective states, that shouldn't be a hindrance at all. There are countless payroll service companies that will do all the calculations and remittances for $30-$50 a month per employee. You definitely don't need an accountant for regular payroll.
danjc 3y ago
Doesn't a PEO like ADP make this a lot easier?
hn_throwaway_99 3y ago
Like another comment said, there are reasons payroll companies exist, and these days there are tons of services that make this easy to do, compliantly. E.g. there is a good reason like the majority of small/medium-ish sized business I know use Gusto because they make it really easy to add contractors or employees (and I'm not specifically pitching Gusto, there are a lot of competitors you can search for). While these products aren't free, the benefit of their SaaS model is that it's a per-employee cost that can grow with you.
pnw 3y ago
This is why PEO's like Justworks are great IMHO. You can offer the big company benefits experience without getting ground to dust by federal/state/local regulations. I can't imagine going back to the old way at any small company.
pcthrowaway 3y ago
If the issue is figuring out payroll (rather than accounting complexities that arise from having additional expenses), you can also hire via remote.com or deel.com, even if hiring domestically, as long as your employee is either salaried or operating as an independent contractor (not actually an employee in that situation though) Employers of record ensure compliance with all local laws and basically just bill you the employee's fully loaded cost, plus their service fee

by orzig 3y ago

I'm in the US but I'll say for sure that things like this are about half the reason I haven't hired any employees for my LLC. I wish I could, but I'd be de facto hiring an accountant as well!

jweir 3y ago

If you are considering hiring and the hire is a developer or at all involved in research and experimentation make sure you are well versed in Section 174. You could be on the hook for a large tax bill since you have to write off developer expenses over 5 years – this is true whether an employee or contractor. Hopefully it will be repealed* – but if not it is one of those things that no one would expect to exist since it is in the words of Senator Wyden "stupid." https://www.law.cornell.edu/uscode/text/26/174 https://www.law.cornell.edu/uscode/text/26/174 * edit It won't be repealed but a law can be created to ignored it until a future date. Once on the books, because of accounting, it is very hard to remove a tax law.

shutupnerd0000 3y ago
My guy, you're replying to someone that said theyre not considering hiring
- orzig 3y ago
  That's fine, I appreciate it! We're all conversing in public, and I'm sure it will be useful to someone. And besides, this information makes me even more happy with an opinion I already have - isn't that what the internet is for?

IG_Semmelweiss 3y ago

If you ever consider to, *given the remote work trends*, consider this: I'd place high importance on the employee state to the state you are hiring them out of. Some states are a nightmare to deal with. For example, NJ, CA, NY and OH. Once you are registered in X state, your company is fair game to be pursued for any kind of perceived (lack of) compliance by that state, long after that employee has left you for another job. For example, you could earn a large fine for not filing to report you have no staff in the state. States that I found were lovely to deal with were ID, TN, and TX. Generally speaking, its highly recommendable to hire employees from your state only for this reason. I would not hire unless you are absolutely needing to.

pnw 3y ago
I got a notice for unpaid back taxes from some state agency in California for a company that had been sold over a decade earlier, merely because we had one part-time employee in California for a few months.
newZWhoDis 3y ago
This. I never hire anyone from NY or CA out of principle.

jjeaff 3y ago

As far as calculating payroll and remitting payments to the proper agencies federally and in their respective states, that shouldn't be a hindrance at all. There are countless payroll service companies that will do all the calculations and remittances for $30-$50 a month per employee. You definitely don't need an accountant for regular payroll.

danjc 3y ago

Doesn't a PEO like ADP make this a lot easier?

hn_throwaway_99 3y ago

Like another comment said, there are reasons payroll companies exist, and these days there are tons of services that make this easy to do, compliantly. E.g. there is a good reason like the majority of small/medium-ish sized business I know use Gusto because they make it really easy to add contractors or employees (and I'm not specifically pitching Gusto, there are a lot of competitors you can search for). While these products aren't free, the benefit of their SaaS model is that it's a per-employee cost that can grow with you.

pnw 3y ago

This is why PEO's like Justworks are great IMHO. You can offer the big company benefits experience without getting ground to dust by federal/state/local regulations. I can't imagine going back to the old way at any small company.

pcthrowaway 3y ago

If the issue is figuring out payroll (rather than accounting complexities that arise from having additional expenses), you can also hire via remote.com or deel.com, even if hiring domestically, as long as your employee is either salaried or operating as an independent contractor (not actually an employee in that situation though) Employers of record ensure compliance with all local laws and basically just bill you the employee's fully loaded cost, plus their service fee