Episode summary

Most agents are 1099 themselves, so when it’s time to get help, 1099 feels like the obvious answer. You bring on a transaction coordinator, or a showing assistant, or your spouse, and you pay them the way you get paid. Nobody sits down and prices it first.

Shelby Henning owns Payroll Vault here in the East Valley, and cleaning that up is her whole job. We get into who actually decides whether somebody’s a contractor or an employee, and here’s the short version. It isn’t you, and it isn’t the agreement you both signed.

From there it gets practical. What a W-2 really costs compared to a 1099 once you add everything in. What changed in the rules. Whether putting your spouse or your kids on payroll is smart or just a good story. When the S-corp conversation is worth having, and what reasonable salary means before somebody else decides it for you.

It’s the last thing most agents want to think about in October, which is exactly why October’s the month to do it.

Takeaways

• Classification isn’t a preference. It’s a test, and how the work actually runs is what answers it.
• A W-2 costs more than the wage, and most people have never added up the difference before they hired somebody.
• Family payroll can be a real move or a mess, and which one depends on details people skip.
• The S-corp question has a wrong time to ask it, and that time is April.
• Reasonable salary is the part people guess at, and guessing is where the exposure lives.
• Payroll run well is boring. Boring is the goal.

Chapters

00:00 Why payroll is a planning problem
02:58 Employee or contractor, and who actually decides
05:59 What a W-2 costs that a 1099 doesn’t
09:01 What changed in the rules
12:00 Putting your spouse or your kids on payroll
14:50 When to stop doing payroll yourself
17:46 The S-corp conversation
21:03 Reasonable salary, and how people get it wrong
23:50 Payroll myths worth killing
26:56 Making it boring on purpose

About the guest

Shelby Henning owns Payroll Vault in the East Valley serving Queen Creek, Gilbert, Mesa, and Chandler. She grew up in Gilbert, played golf on a full ride at the University of Iowa, and worked in human resources, accounting, and business strategy at her family’s company before she opened Payroll Vault.

Payroll Vault Gilbert

(480) 992-5581

One housekeeping note

This whole conversation is general. Classification, entity elections, and reasonable salary all depend on your situation and your state, and the rules move. Nothing here is legal or tax advice. If something in this episode made you uneasy about how you’re paying somebody right now, that’s the point. Go get your own situation looked at.

Come talk to me

If you want a second set of eyes on your numbers before you set next year up, grab a free consult at Apex Accounting and Advisory. No pitch, just a look at your real numbers with somebody who speaks business, not accounting.