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Wallstreet Esq.
Wallstreet Esq., Tax Attorney
Category: Tax
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Experience:  10 years experience
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I have been asked to sub at a job for a salaried employee.

Customer Question

Hi - I have been asked to sub at a job for a salaried employee. He is on leave for about 6 months. During that time he wants to retain his salary and pay me (and another sub) for work done for him. He says he will continue to pay the taxes on his salary but in the meantime, he is asking if I take a cash or check payment for him on a per diem basis. I am still putting into my IRA. and I would rather be paid by the employer directly and submit a tax form. Is what my friend doing legal? What do you suggest I do?
Submitted: 2 months ago.
Category: Tax
Expert:  emc011075 replied 2 months ago.

Hi. My name is ***** ***** I will be happy to help you.

If somebody is an employee, generally he is not allowed to subcontract the job to somebody else. I am surprised that his employer allows it.

That being said, there's nothing wrong with the arrangement. He pays you as an independent contractor and you will report the income on Schedule C and deduct your expenses. But here's the catch. Your self-employment income will be subject to 15.3% self-employment tax (Social security and Medicare tax) in addition to regular income tax. You may also have to pay estimated taxes since no taxes will be withheld from your pay. You should account for about 25% of your pay for federal taxes, plus state and local taxes, if applicable.

Expert:  emc011075 replied 2 months ago.

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

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