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Category: Tax
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My employer does not withhold any tax or other deductions from

Resolved Question:

My employer does not withhold any tax or other deductions from my pay. What should I do?
Submitted: 5 years ago.
Category: Tax
Expert:  Merlo replied 5 years ago.
HelloCustomer

It sounds as though he is paying you as an independent contractor.

What type of work do you do for this company?


Customer: replied 5 years ago.
I basically am the operations manager and senior technician. I work as a network technician and design, install, test, and maintain entire computer network systems or clients. I am the only employee or independent contractor in this company.
Expert:  Merlo replied 5 years ago.
Hello againCustomer

All of the income that you receive from this company will be subject to tax, and must be reported on your tax return. The company paying you should send you a 1099 form at the end of the year to show the total amount you were paid. If they do not provide you with such a form, then you will have to rely on your own records to figure your income for the year that needs to be reported.

Since you are being paid as an independent contractor, you are considered to be self employed. As a self employed person you will report your income on Schedule C. On that same schedule you will also be allowed to deduct any ordinary and necessary expenses that you had in connection with your job. This might include such things as a mileage allowance for use of your personal vehicle, cost of supplies, tools, etc. Once you deduct your expenses from your gross income, you will be liable for tax on the net amount.

As an independent contractor, you will not only be liable for federal and state income taxes, but you will also owe the full share of social security and medicare taxes.

If you feel that your employer has wrongly mis-classified you as an independent contractor rather than an employee, you may file
Form SS-8 with the IRS to explain your job, and they will make a determination on how you should be classified. This determination would be binding on all parties.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.
Merlo, Accountant
Category: Tax
Satisfied Customers: 9783
Experience: 25+ years tax consulting. Specializing in returns for US citizens living abroad
Merlo and 5 other Tax Specialists are ready to help you
Customer: replied 5 years ago.

Thanks for pointing me in the right direction. Although your Answer opens up many more questions concerning my unique situation, I now have some idea as to what my options may be.

 

 

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Merlo
Merlo
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25+ years tax consulting. Specializing in returns for US citizens living abroad