 So, and then we've got the federal unemployment tax. That's the FUTA tax. That's the tax that we have to pay an employer only tax. So for more information, see publication 15, circular E, employer's tax guide. That publication explains tax responsibilities as an employer. Now dealing with payroll is in and of itself a whole topic in and of itself. It does get quite complex quite easily. And you do wanna make sure it's one of those things that you wanna do right the first time. Note that if you have any lawsuits or anything like that, unfortunately those are most likely to come from employees or ex-employees. So you wanna make sure that you have everything documented as best you can. If you're using tax software, like a QuickBooks or something like that, then there's usually gonna be an add-on type of feature to help you to process the payroll. And that's one way that you can deal with payroll. Another way you can deal with payroll is by hiring a third-party payroll provider. The big ones are like an EDP or a paychecks or payroll. They process payroll, they specialize in payroll and might also be able to help with like some human resources kind of stuff. But when dealing with payroll, you might first wanna go to your accountant or your CPA for example, and get an opinion about how you should deal with payroll and whether or not you should structure an employee or situation from the beginning before you talk to people that are gonna make their money by selling you payroll. You wanna talk to someone who's not gonna benefit from you buying payroll from them or their services but get an independent decision and then go to your payroll providers and see which one would be the best one to deal with. Also note, if you're sole proprietorship and you're trying to grow, there's a few different ways if you need human capital, other people working for you, you could either hire them as contractors possibly, depending on the structure, you could hire them as employees possibly or you can hire them as equity partners in the partnership kind of situation. If you hire them as employees, you have the most control over them, what they're gonna do and whatnot but then you have to deal with payroll taxes which is of course a mess. If you hire them as a contractor, you gotta make sure that they qualify as a contractor, otherwise the iris might say that no, they're employees and then they get you in trouble on that sense, you gotta make sure that they are contractors in nature and then you still may have to issue them a 1099 but you don't have to deal with the payroll taxes so much but of course you don't have as much control, the contractors are likely to come and go more than if they were a W-2 employee and then you could hire someone as an equity partner given them an equity interest in the revenue of the business but in that situation you need to be careful with liability because an equity partner can make decisions on your behalf so they might make decisions that you're liable to and obviously you lose a lot of control in your decision-making process as now you have basically a committee making decisions and the tax returns become more complex because instead of filing a schedule C, you generally have to file a partnership return and then have it flow through to the 1040s. All right, so caution, do not reduce your deduction for social security and Medicare taxes by the non-refundable and refundable portions of the family's first Coronavirus Response Act and American Rescue Plan Act of 2021, credits for qualified sick and family leave wages claimed on employment tax return instead report the credits as income. So this was a whole situation that happened with the Coronavirus situation and they tried to kind of shore up payroll, help people to stay on payroll. So you gotta be careful of that situation. Hopefully after this has kind of ironed itself out we'll be back into the normal kind of payroll structure going forward to help you determine whether the people working for you are your employees, you can see publication 15A. Now remember from the IRS's perspective, they like the structure to be an employee or employee situation. Why? Because they can force the employer to withhold. So that's the instruction, that's the structure from the IRS's perspective. You would kind of imagine them angling towards. They're gonna try to act like it's a cut and dry scenario as to whether you should be an employee or a contractor. If you make someone a contractor and the IRS says they should be an employee, then you might end up having to pay payroll taxes and whatnot. So then you have to make sure that you have correctly categorized someone as a contractor or vice versa. And vice versa. But usually it goes in the case of as a contractor and you can go to publication 15A. So do they do their own work? Do they have their own tools? Do they have their own hours? And that kind of stuff would help to determine whether they're a contractor versus an employee. That publication has information to help you determine whether an individual is an independent contractor or an employee caution. If you incorrectly classify an employee as an independent contractor, you may be held liable for employment taxes for that worker plus penalty. So again, the IRS is trying, you can see them angling towards you being their tax collector, meaning an employee employer situation. And they don't really like the contractor situation as much. So you're gonna have to make sure that you can argue if you want a contractor instead of an employee employer situation why that works in accordance with their code. An independent contractor is someone who is self-employed. So you generally do not have to withhold or pay any taxes on payments made to an independent contractor. Notice if you're paying a contractor, it's basically as easy as paying almost like any other bill. Like paying the utility bill is not a problem. I don't need to hire a whole nother payroll company to pay the utility bill. I just say, well, how much did I work? Here's the money. Let's shake hands. Let's make an agreement. But with payroll, it's way more complex than that because of course you have to deal with the withholdings and all that kind of stuff. So you have to balance the complexity of hiring versus a contractor and whether or not you can hire someone as a contractor.