
Business versus Self-Employed Taxes and Other Responsibilities
Part of being a business owner is having different kinds of responsibilities, especially legal. Usually in a business, you end up being responsible not just for yourself but for the employment of others. That means there is extra paperwork, and extra duties, and even extra departments at times. Let’s compare what businesses require versus when you are employing just yourself. These things can be complex — many small business owners keep an attorney on-hand to help them walk through the legalities.
Taxes
When you are self-employed, if you make over four hundred dollars based on your side gig in a year, you file for taxes. Simple. Sometimes the people you work for will give you a form as well. If you are running a business, depending on what kind of business, you may have to report business returns or even pay taxes on the profit. If you have employees, you will have to start withholding social security, medicaid, and sometimes disability. You will also have to give your employees W2 forms to file their own taxes with.
Liability
If you are just a freelancer, there is no particular premises. But often businesses have offices or other specific premises that require liability. You have to inspect and maintain your premises, as well as even obtain insurance. Your business is also liable for product safety. You must be familiar with all laws related to your products and manufacturing. Another thing that helps prevent liability is making sure that your business has obtained all necessary certificates and permits.
Human Resources
If you haven’t noticed, a lot of these extra challenges come with employing other humans. Now, you have to pay attention to general human resources. There are labor laws and health insurance and worker classification. There are hours worked, leave policies, and paid time off policies. All of this and more falls under human resources.
