Why do I need to identify my owners or partners?
The IRS taxes the owners of a business differently from the business' W-2 employees. Depending on the business' entity type, these owners may be partners (e.g., partnerships), shareholders (S Corporations), officers (Corporations) or simply sole proprietors. Payroll providers such as Zenefits Payroll need to know which of a business' employees are also owners of the company in order to determine:
- how to manage benefits costs for these owners and officers;
- how the business should be taxed based on its entity type, and what forms it should file; and
- whether any employees are also family members of owners or partners.