Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I will ask my employer about this soon, but I thought I'd just see if anyone on CD knew about taxes pertaining to freelance jobs? When I get paid, it's through paypal and no taxes are taken out. I talked to my dad about it and he told me that I'm probably considered an independent contractor. Does anyone know how this works?
I will ask my employer about this soon, but I thought I'd just see if anyone on CD knew about taxes pertaining to freelance jobs? When I get paid, it's through paypal and no taxes are taken out. I talked to my dad about it and he told me that I'm probably considered an independent contractor. Does anyone know how this works?
People who get 1099 jobs get screwed.
You are self employed and you get to pay the self employment tax. Lucky you.
Most likely you will have to file and pay quarterly taxes but it could go monthly depending on the amount paid.
If you are filing as a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you generally have to make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.
A lot of people accept 1099 'contractor" status even when they really qualify as an employee.
Some even actually understand the distinction and some of this subset actually prefer it.
A lot of people accept 1099 'contractor" status even when they really qualify as an employee.
Some even actually understand the distinction and some of this subset actually prefer it.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
44,551 posts, read 81,085,957 times
Reputation: 57729
Almost all companies will file a 1099 now for any services and that goes to the IRS, so make sure you do declare all of your income. If you didn't have that freelance income last year they will likely not penalize you for failure to
do quarterly estimate payments, but you will have to do so next year and you need to set aside about 1/3 of that income to cover the tax next April.
It is tax fraud most likely and as everyone else said you are getting screwed. Fill out form SS-8 and send it to the IRS. It will take a long time but they will force your employer to make you W2 and pay their portion of SS and Medicare as well as some penalties.
There are a list of 20 criteria that have to be passed for you to truely be considered 1099 independent contractor. These are usually for construction or design contracts for completion a single project of defined specifications, scope, and duration. If you have a boss who tells you what to do and assigns you tasks that weren't originally defined at the beginning and owns the equipment then it is fraud and should be reported using form ss-8.
I am going though that now and am waiting for the IRS to process my SS-8 (it takes 6 months to a year). In the meantime you can file as if you were W2 and there is another form for uncollected SS and medicare or you can file as an independent contractor and amend when the IRS reaches a decision. I'd file as a W2 because the IRS almost always rules against 1099 especially if you don't have multiple contracts with different companies.
Last edited by MSchemist80; 09-06-2011 at 09:22 AM..
I have to write another quarterly check in a few days. I'm not looking forward to it.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
