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Invisibleseven
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Male

Registered: 06/09/08
Posts: 1,478
Loc: north carolina
unexpected 1099 wtf!
    #9086541 - 10/16/08 01:00 PM (15 years, 3 months ago)

so ive been working for this subcontractor for 2 years. nothing has been mentioned of taxes the first year or the second till now at the end of the year. he asks for my info friday i give him false info. monday i confront him about not warning me he would give me a 1099. we get into an arguement which almost turns into a fight. i quit and told him to suck a dick and told him i gave him the wrong ss number friday. i would of had no problems if he would have warned me and i could have saved a portion from each payday. but i felt he was trying to fuck me. what can he do? he knows my name and where i live.


--------------------
grind


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Offlinenonwo
truth seeker
Male


Registered: 08/08/08
Posts: 1,431
Loc: southern usa
Last seen: 14 years, 9 months
Re: unexpected 1099 wtf! [Re: seven]
    #9086570 - 10/16/08 01:04 PM (15 years, 3 months ago)

i had that happen but the boss dint make shure i filled out a tax form and i just didnt its was only like2400 $


--------------------
yellow red black and white cometogether as humans and fallow the path the creater intended


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InvisibleLiquidkick
H2O
Registered: 05/03/02
Posts: 2,635
Re: unexpected 1099 wtf! [Re: seven]
    #9087575 - 10/16/08 05:14 PM (15 years, 3 months ago)

LOL....


According to the internal revenue code, people can actually get paid to turn your ass into the IRS.

Be careful who you tell about your tax situation.


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Invisiblesherm
sherman
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Registered: 10/02/03
Posts: 20,498
Loc: Euthanasia
Re: unexpected 1099 wtf! [Re: seven]
    #9087691 - 10/16/08 05:40 PM (15 years, 3 months ago)

If hes trying to fuck you, fill out an SS-8 form and fuck him harder.
handing people 1099s is a pretty common douche bag employer practice.
http://www.irs.gov/pub/irs-pdf/fss8.pdf

http://www.irs.gov/faqs/faq4-3.html
Quote:

I received a Form 1099-MISC instead of a Form W-2. I'm not self-employed, I do not have a business. How do I report this income?

If payment for services you provided is listed in box 7 of Form 1099-MISC (PDF), you are being treated as a self-employed worker, also referred to as an independent contractor. You do not necessarily have to "have a business," but simply perform services as a nonemployee to have your compensation treated this way. The payer has determined that an employer-employee relationship does not exist in your case. That determination is complex, but is essentially made by examining the right to control how, when, and where you perform those services. It is not based on how you are paid, how often you are paid, nor whether you work part-time or full-time. There are three basic areas that are relevant to determine employment status:

    * behavioral control,
    * financial control, and
    * relationship of the parties

For more information on employer-employee relationships, refer to Chapter 2 of Publication 15, Circular E, Employer's Tax Guide and Chapter 2 of Publication 15-A (PDF), Employer's Supplemental Tax Guide. If you think that you were, or are, an employee and you would like the IRS to issue a determination, you may submit Form SS-8 (PDF), Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.






http://www.irs.gov/publications/p15/ar02.html#d0e982

Quote:

2. Who Are Employees?

Generally, employees are defined either under common law or under statutes for certain situations.
Employee status under common law.  Generally, a worker who performs services for you is your employee if you have the right to control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that you have the right to control the details of how the services are performed. See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee.

  Generally, people in business for themselves are not employees. For example, doctors, lawyers, veterinarians, construction contractors, and others in an independent trade in which they offer their services to the public are usually not employees. However, if the business is incorporated, corporate officers who work in the business are employees.

  If an employer-employee relationship exists, it does not matter what it is called. The employee may be called an agent or independent contractor. It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time.

Statutory employees.  If someone who works for you is not an employee under the common law rules discussed above, do not withhold federal income tax from his or her pay, unless backup withholding applies. Although the following persons may not be common law employees, they may be considered employees by statute for social security, Medicare, and FUTA tax purposes under certain conditions.

    *

      An agent (or commission) driver who delivers food, beverages (other than milk), laundry, or dry cleaning for someone else.
    *

      A full-time life insurance salesperson who sells primarily for one company.
    *

      A homeworker who works by guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates.
    *

      A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. The orders must be for items for resale or use as supplies in the customer's business. The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging.

  See Publication 15-A for details on statutory employees.

Statutory nonemployees.  Direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. They are generally treated as self-employed for all federal tax purposes, including income and employment taxes. See Publication 15-A for details.

Treating employees as nonemployees.  You will generally be liable for social security and Medicare taxes and withheld income tax if you do not deduct and withhold these taxes because you treated an employee as a nonemployee. See Internal Revenue Code section 3509 for details. Also see Special additions to tax liability under Prior Period Adjustments in section 13.

Relief provisions.  If you have a reasonable basis for not treating a worker as an employee, you may be relieved from having to pay employment taxes for that worker. To get this relief, you must file all required federal tax returns, including information returns, on a basis consistent with your treatment of the worker. You (or your predecessor) must not have treated any worker holding a substantially similar position as an employee for any periods beginning after 1977.

IRS help.  If you want the IRS to determine whether a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.




--------------------
shroomery.
not even once.



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InvisibleVeritas
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Registered: 04/15/05
Posts: 11,089
Re: unexpected 1099 wtf! [Re: sherm]
    #9087782 - 10/16/08 05:55 PM (15 years, 3 months ago)

If they rule that he is an employee, he will still owe taxes on the wages he has received.  If the subcontractor is determined to report the money, it is likely that a tax liability will be incurred.


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Invisiblesherm
sherman
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Registered: 10/02/03
Posts: 20,498
Loc: Euthanasia
Re: unexpected 1099 wtf! [Re: Veritas]
    #9087896 - 10/16/08 06:12 PM (15 years, 3 months ago)

if his employer is filling out paper work and handing him forms hes going to have to pay something on the money he has made.
If i remember correctly, filling out an SS-8 and being found to be an employee will knock off half of the money he owes and jam it up back up his employers ass.:flowerchild::hippie::sun:


--------------------
shroomery.
not even once.



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InvisibleVeritas
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Posts: 11,089
Re: unexpected 1099 wtf! [Re: sherm]
    #9088088 - 10/16/08 06:55 PM (15 years, 3 months ago)

An employee does not have to pay the employer's 1/2 of Social Security and Medicare, but they have to pay Federal and State income tax through withholding, as well as State worker's compensation tax.  An employee cannot take any deductions for their expenses involved in working, either, so their entire compensation is taxable.  A self-employed person only pays taxes on their profits not on their gross receipts.

In short, a redetermination of employment status will NOT cut his tax obligation in half.


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Offlinenonwo
truth seeker
Male


Registered: 08/08/08
Posts: 1,431
Loc: southern usa
Last seen: 14 years, 9 months
Re: unexpected 1099 wtf! [Re: Veritas]
    #9088198 - 10/16/08 07:19 PM (15 years, 3 months ago)

income is profits gained of an investment
when u work u trade labor for money this is not income


--------------------
yellow red black and white cometogether as humans and fallow the path the creater intended


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InvisibleautomanM
blasted chipmunk
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Registered: 09/18/03
Posts: 8,272
Re: unexpected 1099 wtf! [Re: Veritas]
    #9088203 - 10/16/08 07:20 PM (15 years, 3 months ago)

i would assume that the OP profit = gross pay. since he wasnt aware that he was self employed, he probably didnt keep receipts for anything. while it wouldnt cut his taxes in half, his employer would be responsable for half of is unemployement tax and a portion of his medicare. also, the employer would get fucked since he would have to pay for the last year of OP's worker's comp, depending on what state he is in. if i were the OP, i would go give the guy my correct workers info and tell him to report me as an employee, not an independant contractor. not threate him with what i might do if he doesnt. just make the request. he if doesnt do it, then inform the irs of my actual status and set up arrangments to pay my tax debt once it is adjusted down to the correct level. then if my boss gave me shit after that, THEN i would inform his insurance company and force his back payments.


--------------------
No, no, you're not thinking, you're just being logical. ~ Niels Bohr


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Invisiblesherm
sherman
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Registered: 10/02/03
Posts: 20,498
Loc: Euthanasia
Re: unexpected 1099 wtf! [Re: Veritas]
    #9088269 - 10/16/08 07:32 PM (15 years, 3 months ago)

i was under the impression that a person is taxed about 15% of their total earnings (federal) and that the employer pays about 7.5% and the employee pays about 7.5%. (assuming its at 15%)
and that by giving someone a 1099 an employer avoids paying their half of the 15%.  Filling out an SS-8 and being determined to be an employee would place that half of the 15% back on the employer.

Am i incorrect?

this is what i found.
http://taxes.about.com/b/2006/06/05/payroll-taxes-are-mandatory.htm
Quote:

Even freelancers and other self-employed people cannot avoid the Social Security and Medicare taxes. They pay the Self-Employment Tax, which is 15.3% on net profits from their trade or business. The 15.3% combines both the employer's portion (7.65%) and employee's portion (another 7.65%) of payroll taxes.




--------------------
shroomery.
not even once.



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Invisiblesherm
sherman
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Registered: 10/02/03
Posts: 20,498
Loc: Euthanasia
Re: unexpected 1099 wtf! [Re: automan]
    #9088279 - 10/16/08 07:34 PM (15 years, 3 months ago)

i like your style


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shroomery.
not even once.



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InvisibleVeritas
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Posts: 11,089
Re: unexpected 1099 wtf! [Re: sherm]
    #9088398 - 10/16/08 07:54 PM (15 years, 3 months ago)

Quote:

sherm said:
i was under the impression that a person is taxed about 15% of their total earnings (federal) and that the employer pays about 7.5% and the employee pays about 7.5%. (assuming its at 15%)
and that by giving someone a 1099 an employer avoids paying their half of the 15%.  Filling out an SS-8 and being determined to be an employee would place that half of the 15% back on the employer.

Am i incorrect?






That is what I said...he would not have to pay the employer's portion of SS and Medicare taxes.  This does not mean that his Federal income tax and State income tax liabilities would be cut in in half.  Plus, once you file your taxes as a self-employed person, the employer's portion of SS and Medicare is deducted from your taxable income, which reduces your Federal income tax liability. 


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Invisiblesherm
sherman
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Registered: 10/02/03
Posts: 20,498
Loc: Euthanasia
Re: unexpected 1099 wtf! [Re: Veritas]
    #9088426 - 10/16/08 08:02 PM (15 years, 3 months ago)

:yoda2::3dglasses::lizhurley:


--------------------
shroomery.
not even once.



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InvisibleVeritas
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Re: unexpected 1099 wtf! [Re: automan]
    #9088430 - 10/16/08 08:02 PM (15 years, 3 months ago)

Quote:

automan said:
i would assume that the OP profit = gross pay. since he wasnt aware that he was self employed, he probably didnt keep receipts for anything.




He could still prove his expenses through bank records/cancelled checks.  There are many deductions available to a self-employed person which are not available to an employee.  Even if he could not determine ALL of his deductible expenses, he would still reduce the income upon which he would be taxed.

Quote:

while it wouldnt cut his taxes in half, his employer would be responsable for half of is unemployement tax and a portion of his medicare.




Actually, in most states (if not all) the employer pays 100% of the unemployment tax.  Employees pay 1/2 of the worker's compensation tax which is calculated on the number of hours they worked.


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InvisibleVeritas
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Re: unexpected 1099 wtf! [Re: sherm]
    #9088437 - 10/16/08 08:04 PM (15 years, 3 months ago)

:lol:  I've been handling payroll and income taxes for many years.


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Invisibleseven
.
Male

Registered: 06/09/08
Posts: 1,478
Loc: north carolina
Re: unexpected 1099 wtf! [Re: Veritas]
    #9088947 - 10/16/08 09:38 PM (15 years, 3 months ago)

wow thats alot to take in. i will give more details and hope for advise on a course of action. this said employer of mine im sure is in trouble with the irs as is because i see the irs letters in his van often. i made thirty percent of each job after supplys and his phone bill wer taken off the check by the carpet shop. he subcontracts from them and i was just a helper so to speak. he sprung this on me at the last second. fucking bullshit i say!


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grind


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Invisibleseven
.
Male

Registered: 06/09/08
Posts: 1,478
Loc: north carolina
Re: unexpected 1099 wtf! [Re: seven]
    #9089080 - 10/16/08 09:58 PM (15 years, 3 months ago)

to add : i have no records of anything and neither does he. he paid me cash. i signed nothing to get the job. i barely made money to pay my rent.  i feel he could list i made more money than i really did. and screw me on the taxes. after the harsh words we had im sure he would have no problem. i was his only employee\helper. someone please give me advise in clear language. i havent ever had to deal with anything of the sort. i just took my W2'S to h and r block and they have always took care of the rest.


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grind


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InvisibleVeritas
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Re: unexpected 1099 wtf! [Re: seven]
    #9090737 - 10/17/08 09:23 AM (15 years, 3 months ago)

OK, the bottom line is that you DID receive payment for services.  Either that payment was wages (employee) or it was gross receipts (self-employed).  If he reports the amount inaccurately, you have the right to contest it & the burden of proof would be on him.  If he has not kept records of payments to you, it is likely that the IRS would disallow his deduction for that expense AND void the 1099 report.

But if he has kept records, you will either owe taxes as an employee OR as a self-employed individual.  There is no way around this.  The IRS is quite serious about collecting tax obligations, and they do not look kindly upon "under the table" work, as it is clearly a method of tax evasion.

If you receive a 1099 for non-employee compensation, you can still take it to H&R Block & they will prepare your return.  It's really not a big deal, though it may seem so when you had the expectation of paying $0 in tax.


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Invisibleseven
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Male

Registered: 06/09/08
Posts: 1,478
Loc: north carolina
Re: unexpected 1099 wtf! [Re: Veritas]
    #9091191 - 10/17/08 11:04 AM (15 years, 3 months ago)

haha thanks thats was short and sweet. one more question. if i feel the amount is wrong that he turns in. how do i go about contesting it? and thank you so much for all your effort in helping me understand the options and laws.


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grind


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InvisibleVeritas
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Re: unexpected 1099 wtf! [Re: seven]
    #9091259 - 10/17/08 11:19 AM (15 years, 3 months ago)

IRS "dot" gov is a searchable, user-friendly site.  I highly recommend reviewing the 1099 topics there, as well as other topics related to individuals.


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