Originally Posted by Unregistered:
I'm doing a home daycare, but would like to get into a separate building in the next year or so. My question is this. If I do that, I will hire a few others to help me. Maybe two other people to start. I'm curious as to how taxes work. Right not, I'm getting taxed once and the rest is my profit. A friend, who is not in business, is telling me if I hire more people I will have to pay taxes twice. For example, now if I'm getting a 100 per week child and I pay say 20 dollars in taxes. My friend is saying, I will paying more taxes on my pay than that on my pay. If anyone employees more than one person can you tell me how many times you pay tax on the income? It will help me to set a guide line. There's a big difference between getting 80 dollars after taxes and say 60.
Double taxation only comes into play if you form a C corporation. Otherwise, this is not an issue. You will need to pay all the payroll taxes when hiring employees: Social Security taxes, federal and state unemployment taxes and getting workers compensation insurance.