I am a small company with 5 independent contractors that work for my company. I have been in business 15 years and always had independent contractors, because the turn over rate is so high! These contractors are now wanting federal taxes taken from their checks and sent in so they do not owe at the end of the year.
As a DBA company, can I do this without going into full blown payroll mode?=======>>no; they are contractors NOT regular W2 employees? also,you need full blown payroll mode for your W2 employees.you
are required to withhold federal income tax (as well as Social Security and Medicare taxes) from your employees' pay. contracotors work on their own, they are required to pay these taxes on your own, either through quarterly estimated tax payments or when you file your tax return at the end of the year
I don't want to do that if I don't have too. I just want to take federal taxes out for them.==>as mentioned above, No you can not just take fed taxes out of them UNLESS they are your W2 employees.
I have already been withholding the taxes from their checks, but I have not made any sort of payments yet.=>>As said, you can not withhold the axes form their checks UNLESS they are regular W2 employees.
Should I just hold the money until the end of the year and give it to them, or should I pay it in, and W2 them at the end of the year instead of them getting their 1099's?==>>UNLESS they are regular W2 employees, you can not withhold taxes from their paychecks;Once you W2 them then, you need full blown payroll mode;you, as an employer, are required to report your payroll tax obligations and to deposit payroll taxes in a timely manner. Reporting requirements include:
Making federal tax deposits;Annual federal unemployment tax return (Form 940 or 940EZ);Employer's quarterly payroll tax return (Form 941)
;Annual Return of Withheld Federal Income Tax (Form 945)
;Wage and Tax Statements (Form W-2)
You also have requirements to file reports with various state and local agencies