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RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Is it true that if you work as an independent contractor (W-9)

Resolved Question:

Is it true that if you work as an independent contractor (W-9) and you dont reach a $700 annual with the company you dont need to file for tax?

If yes, how does it work and if no I still would like to know more details

Thanks!
Submitted: 6 years ago.
Category: Tax
Expert:  RD replied 6 years ago.
Chat Conversation Started
RD :

If you work as independent contractor you are considered self employed.

RD :

You have to report and file if have net earnings of $400 or more. You are required to pay self-employment tax by filing Schedule SE (PDF), to your FOrm 1040

RD :

If your income is $700 than you can claim expenses that you may have incurred in carrying on this activity. If as a result your net income is under $400 than there is no self employment tax due but you are required to file a tax return.

Customer :

got it.

Customer :

So why my employer said that since I didnt acheve the 700 I wouldnt need to receive the 1099 form from them? cause thats what they told me and i never got it..

Customer :

what should I do cause I want to have my taxes done..

RD :

Normally, if the payment is $600 or more in a year than they are required to issue you a Form 1099.

RD :

I do not think the employer gave you the correct info.

RD :

You can prepare your taxes even without the Form 1099. You need to report the income that you received.

Customer :

Im filing for immigration for permanent residency (thru marriege) and I'm concerned cause I didnt do taxes and I used my SS that I got with the j-1 visa but my visa expired 2 years ago.. do u think if I file paperwork before doing tax that can be an issue?

Customer :

what is your knowladge on that field?

Customer :

I already asked lawyers and the tell me that I'll be forgiven for the work but they told me to ask a tax expert regarding the tax it self

RD :

I do not think this should be an issue esp. since your employer has not issued a Form 1099 and so really the IRS has no info of the income you received.

Customer :

got it!

RD :

Plus....$700 is not a very big amount.

RD :

You may want to file it once your paperwork is cleared and that should be fine....I suppose. Do check with your lawyer on this.

Customer :

so whats the % I'll have to pay for the income? 30%? do I have any penalty?

Customer :

can I do it online or u should I hire someone?

RD :

You may not have to pay anything if your net income after expenses is under $400. You should be able to do it online using the tax software or manually by downloading forms from www.irs.gov

RD and other Tax Specialists are ready to help you