OK, School me on what I need to do, what all entails everything having to do with having a freelance "employee" who I outsource my album designing to, and pay plat rates per album.... she says she fills out the w-9 form for her freelance work, but what does that do to me? Will I have to pay taxes on what I pay her? Should I be taking taxes out of her check? How will that mess me/help me when next years tax season rolls around?
I know it's probably different in each state (I'm guessing??)
I'm in South Carolina, but if anyone has any idea what I need to do or remember, please chime in!:)

Definitely talk to an accountant about this because there are rules about what defines a freelancer vs. an employee. This is the kind of stuff you really should do properly.

It may be as simple as the freelancer invoicing you and paying their own estimated tax, but only an accountant will know for sure.

It means that if you pay her more than $600.00 you should cut her a 1099-misc at the end of the year. (Due by Jan 31). The 1099-misc lets the government know she is self employed and it gives you the deduction against your business income. The form W-9 is just a vehicle to get you her name, address and social security number. You do not file that form with anyone, you just keep it for your records.

The best thing to do is contact you accountant; and let him/her know you may have 1099's to prepare next year. More than likely they will add you to their list of 1099s they do for their clients and take care of the whole thing for you. For a fee of course.

If the freelance person does not work in your office and you do not dictate her schedule and she invoices you for the work she performs I would say you are pretty safe not having her as an employee. But again contact your tax advisor in your state.

I hope that helps.

Melissa O