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JB Umphrey
JB Umphrey, Attorney
Category: Legal
Satisfied Customers: 20233
Experience:  Explains legal matters based on 14+ years experience.
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I have worked for a property owner as a freelance resident

Resolved Question:

I have worked for a property owner as a freelance resident manager for about 5 mounths. He provides me an apartment and 2k a month. I asked that he provide a 1022/1099 so that I could report my earnings to the IRS.Now, he decides to go the W-2 /W-4 route and
wants take the back taxes (I would have owed the IRS) out of my check. Presumeably to gain the credit (he would have received by the IRS) on the loss of paying a contractor to do the work. This would violate our agreement on the 2k a month for services rendered among other IRS implications.
Submitted: 6 years ago.
Category: Legal
Expert:  JB Umphrey replied 6 years ago.
Thank you for using JustAnswer!

Can you please clarify what is your actual question that you would like assistance with?
Customer: replied 6 years ago.

Can he bill me for this? My YTD earnings only account for the check i received today.

1k (i get paid bi-monthly) Why should I pay taxes on back payment i received by his personal checks that i have no records of or proof of payment i can show the IRS?

Expert:  JB Umphrey replied 6 years ago.
Have you already made quarterly estimated tax payments to the IRS?
Customer: replied 6 years ago.

First of all, Im glad you are from MI. I am from Grand Rapids.

I have not, because I do not actually hold the contractor status here in Oregon to


Expert:  JB Umphrey replied 6 years ago.
Yes, the employer can treat this as a W-2 relationship and, actually, your ultimate tax burden will be less because of it. This is because you will only be having 1/2 of your FICA being withheld from your check. The employer has to match the other 1/2.

As an independent contractor, you are responsible for: 100% of the FICA payments and you're supposed to be making quarterly estimated tax payments to the IRS.

As a general matter, you are an employee (not an independent contractor). It would seem that your employer wants to avoid any problems with the Department of Labor or IRS down the road and that's why the employer wants to go the W-2 route.

Good luck and best wishes. I hope that you find this information to be helpful and this answer to be ACCEPTable!
Customer: replied 6 years ago.

How does this explain our original contract for 2k a month cash? When/ how do

I receive documentation for payment of services rendered for the last five months.

Can he take about $700.00 out of my future checks for retro taxes before the W2

relationship was established?

Expert:  JB Umphrey replied 6 years ago.
A written contract cannot be designed to avoid employment/income taxes. One cannot successfully sue in court for breach of contract on the theory that now one has to pay taxes.

If a person is compensated for performed work, yes, employment taxes can be withheld. If employment taxes were not withheld in the beginning, yes, there can be a catch-up.
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