[kfb]

I agree with most of the advice given so far, but be careful that you do not interpret it too liberally. You can't get around payroll by just calling your workers contractors and sending them a 1099. The IRS has pretty stringent rules about who is a contractor and who isn't. Furthermore, you can't get around paying payroll taxes by not taking a salary yourself. The IRS presumes no one would work for free so expects everyone working for the company is getting compensated somehow. If you are a valid contractor, it is fine to get paid as such. But if you are working full time long term for the company I can't imagine there is an accountant or lawyer who will tell you it is ok to call yourself a contractor and skip doing payroll.