Subcontractor vs Employee (profit, employer, paycheck, accountant)

[PG77]

I know if you are a subcontractor you have to pay your own taxes, but do you also have to pay Social Security, etc. Anyone have any information about subcontractors?

[Driller1]

Originally Posted by PG77

I know if you are a subcontractor you have to pay your own taxes, but do you also have to pay Social Security, etc. Anyone have any information about subcontractors?

I get 1099's and do not pay in.

[TracySam]

You might ask at laborlawtalk.com
this comes up a lot over there. It's a forum with a setup like this one.

[PG77]

Thanks all

[npumcrisz]

Originally Posted by TracySam

You might ask at laborlawtalk.com
this comes up a lot over there. It's a forum with a setup like this one.

Tracy are you a member of this forum?
If yes, then there is a problem with registration.
No Spam question error both in registration and with contact us.

[sunsprit]

If you are legitimately working as a subcontractor and receiving 1099's from your contractor, then you are personally liable for all of the taxes that would be paid.

That includes paying both the employee and employer "contribution" of FICA (about 15% of the gross income), as well as any income taxes due to the FED and the State, or local income taxes.

Since the employer files the 1099's with the FED, they pretty much know what you owe. Even if you have no income tax liability, you'll still have the FICA taxes to pay, so don't ignore filing and paying or you'll soon be getting notices w/penalties and interest from the FED. As far as they're concerned, it's Their Money, not yours.

You may want to check with your accountant re the correct designation of you as a "contract" employee. Often, employers will mis-categorize a worker in an attempt to avoid their portion of FICA taxes, as well as UI and Workmen's Comp. There are "means testing" questions which are the Fed recognized guidelines to establish your correct category, and ... if you qualify as an employee instead of a contractor, the taxes should be paid by the employer, not you, and witheld as needed from your paycheck.

[f_m]

You will end up paying the tax once you do the income tax calculation (assuming 1099). You may also be charged a penalty fee for not paying in advance.

[Driller1]

I file taxes and do not pay FICA. I have no employees. I file a 1040 with a schedule "C".
I was audited in 05 and 06 and they found no change necessary.

[jwiley]

It is usually the schedule SE that you would file, and it is a part of every tax return I have ever seen that has a schedule c, the only way you would not have one is if you did not have a profit of any kind from your self employment, or you were an employee elsewhere and had hit the SS cap.

[Driller1]

Originally Posted by jwiley

It is usually the schedule SE that you would file, and it is a part of every tax return I have ever seen that has a schedule c, the only way you would not have one is if you did not have a profit of any kind from your self employment, or you were an employee elsewhere and had hit the SS cap.

I do not make a profit. Never have, never will. Remember tax is paid on what you keep, not want you make.