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Ricky
SFN Die Hard
USA
4907 Posts |
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Kil
Evil Skeptic
USA
13477 Posts |
Posted - 05/10/2009 : 19:41:42 [Permalink]
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| As far as I know, he can 1099 you without your being a licensed contractor. As far as taxes go, $1200 a year should mean that you won't have to pay any. |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 05/10/2009 : 20:35:10 [Permalink]
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| I think that before calculating your taxes, you withdraw 3500 bucks from you salary. So, anything below $3501 would give you a $0 taxable salary... |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Ricky
SFN Die Hard
USA
4907 Posts |
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Kil
Evil Skeptic
USA
13477 Posts |
 Posted - 05/10/2009 : 22:48:48 [Permalink]
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Originally posted by Ricky
Originally posted by Simon
I think that before calculating your taxes, you withdraw 3500 bucks from you salary. So, anything below $3501 would give you a $0 taxable salary...
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This is what I thought too. But from this site
| 1099 contractors who make more than 600 US dollars (USD) per year are issued 1099 forms from the business(es) that paid them. On their income, 1099 contractors must pay income and social security taxes; employees must do the same. The difference is that employers generally withhold taxes on the employee's behalf. Additionally, employers generally cover half of the total Social Security and Medicare taxes, currently a 15% tax of net income, meaning that the employer cover 7.5% on behalf of the employee. |
So it seems like there is something different about being a 1099 contractor. Now it wouldn't be so bad if this was my only source of income, but I also get a stipend from Michigan State University. Would doing taxes for each of these be completely separate?
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Oh yeah. You will probably have to pay social security. Even if you have to send money in, the income tax part will be sent back to you. No way do you pay taxes on $1200 a year. |
Uncertainty may make you uncomfortable. Certainty makes you ridiculous.
Why not question something for a change?
Genetic Literacy Project |
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 05/10/2009 : 23:07:28 [Permalink]
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If you're a 1099 contractor making over $600 per year, then you need to claim that income as self-employment income and pay your own SS and Medi-whatever taxes on it (schedule C).
My wife was doing some work a few years ago, and made something like $657 that year. The extra work on the taxes was annoying, but not all that difficult. Her employer sent us a hand-scrawled 1099, and he was obligated to.
Your employer either doesn't want to pay you, or doesn't want to file a 1099 for your employment (or both). Actually, if you haven't been paid since 2007, then he really doesn't want to do the extra paperwork for the back 1099s, and he's probably screwed within the company, because the books for 2007 have been closed and audited by now, so it'll be really tough for him to pay you that old money. He doesn't have a 2007 budget any more. He basically has to admit to his boss that he's been screwing up pretty badly for two years.
On the plus side, if you haven't been paid, your tax liability is zero. If he ever does pay you, it'll probably be illegal for him to back-date a 1099. If (for example) he pays you all your money tomorrow, he'll have to date the 1099 for this year, and you'll claim it all as income for this year (so you'll pay the taxes on it in 2010).
You should probably sever the retainer agreement until he does pay you what he owes you to date. He's clearly breached the contract. Make sure the next contract you get with him has someone else's signature on it as well as his, so there's someone else you can go to when he tosses you under the bus again.
Edited to add: I am not a lawyer, an accountant or an IRS employee. I make no warranties on the above information, express or implied. Your mileage may vary. |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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BigPapaSmurf
SFN Die Hard
3192 Posts |
Posted - 05/11/2009 : 04:43:25 [Permalink]
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| Sounds like a U of M grad. |
"...things I have neither seen nor experienced nor heard tell of from anybody else; things, what is more, that do not in fact exist and could not ever exist at all. So my readers must not believe a word I say." -Lucian on his book True History
"...They accept such things on faith alone, without any evidence. So if a fraudulent and cunning person who knows how to take advantage of a situation comes among them, he can make himself rich in a short time." -Lucian critical of early Christians c.166 AD From his book, De Morte Peregrini |
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Ricky
SFN Die Hard
USA
4907 Posts |
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Ricky
SFN Die Hard
USA
4907 Posts |
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Dave W.
Info Junkie
USA
26022 Posts |
Posted - 05/11/2009 : 17:22:11 [Permalink]
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Originally posted by Ricky
This is what he wants to do, but he also wants to keep it under the $600 a year limit to avoid filing the 1099. |
He can't do that while paying you more than $49.99 a month.
But, here are the instructions, and here is a sample form. Order the real form, fill out as much as you can for the guy, get an envelope and a stamp, and trade him the filled-out form for a check for the whole amount of what you're owed.
If he still won't do it, then I would think that he's trying to keep off the IRS' radar for some reason or other. All the more reason to get away from the guy. |
- Dave W. (Private Msg, EMail)
Evidently, I rock!
Why not question something for a change?
Visit Dave's Psoriasis Info, too. |
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Valiant Dancer
Forum Goalie
USA
4826 Posts |
Posted - 05/16/2009 : 05:20:58 [Permalink]
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Originally posted by Ricky
| Your employer either doesn't want to pay you, or doesn't want to file a 1099 for your employment (or both)... He basically has to admit to his boss that he's been screwing up pretty badly for two years. |
It is a small company, before the merger he was the CEO. Now he is sharing CEO responsibilities with the other companies old CEO. But I'm almost certain he doesn't want to tell the other CEO that he has been paying this guy 1200 a year to run a time reporting application.
If (for example) he pays you all your money tomorrow, he'll have to date the 1099 for this year, and you'll claim it all as income for this year (so you'll pay the taxes on it in 2010).
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This is what he wants to do, but he also wants to keep it under the $600 a year limit to avoid filing the 1099.
| Make sure the next contract you get with him has someone else's signature on it as well as his, so there's someone else you can go to when he tosses you under the bus again. |
It was a verbal agreement. None the less, he isn't going to find anyone else to maintain his pet project (the time reporting system), so it's either me or he has to try to use it without maintenance, which would make the entire thing worthless in a years or two.
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What he's telling you is bullshit.
You are being a lot nicer to him than I would have.
He's breached the contract by not paying you. He pays up or you go to the partner and let him know what's going on. The 1099 issue is yours, not his. Yes, it will be some out of pocket for you to make up the SS taxes, but that isn't his concern. |
Cthulhu/Asmodeus when you're tired of voting for the lesser of two evils
Brother Cutlass of Reasoned Discussion |
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Ricky
SFN Die Hard
USA
4907 Posts |
Posted - 05/18/2009 : 14:22:12 [Permalink]
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I had a nice long talk with my boss not long ago. He completely changed his story, I suppose he had hoped I wouldn't notice. Instead of being surprised I wasn't getting my monthly retainer, as he was a month ago when this issue started, he said that he had assumed our agreement ended... without telling me. Lying prick.
So he gave me two options: to take pay for the hours I've worked since 2009, which was approximately 20-30 hours and quit, or to get $600 for this year and to work out a deal for the future. So I quit.
As soon as his web host changes anything (PHP, MySQL versions, their library for SMTP, etc), there will more likely than not be problems with the system I designed, at which point he will have a big chunk of worthless code. At best I'd say he has 3 years. I really don't think he'll find someone who will want to maintain my code, at least not for whatever he is willing to pay. |
Why continue? Because we must. Because we have the call. Because it is nobler to fight for rationality without winning than to give up in the face of continued defeats. Because whatever true progress humanity makes is through the rationality of the occasional individual and because any one individual we may win for the cause may do more for humanity than a hundred thousand who hug their superstitions to their breast.
- Isaac Asimov |
| Edited by - Ricky on 05/18/2009 14:54:26 |
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Simon
SFN Regular
USA
1992 Posts |
Posted - 05/18/2009 : 14:36:30 [Permalink]
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So, you got screwed of the pay for the previous years?
That sucks, on a principle basis.
Do you have any proof of the work you did for them?
Maybe you could threaten with a lawsuit. He might be willing to settle, if only not to look to bad in front of his new found associate... |
Look again at that dot. That's here. That's home. That's us. On it everyone you love, everyone you know, everyone you ever heard of, every human being who ever was, lived out their lives. The aggregate of our joy and suffering, thousands of confident religions, ideologies, and economic doctrines, every hunter and forager, every hero and coward, every creator and destroyer of civilization, every king and peasant, every young couple in love, every mother and father, hopeful child, inventor and explorer, every teacher of morals, every corrupt politician, every "superstar," every "supreme leader," every saint and sinner in the history of our species lived there – on a mote of dust suspended in a sunbeam.
Carl Sagan - 1996 |
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Ricky
SFN Die Hard
USA
4907 Posts |
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Machi4velli
SFN Regular
USA
854 Posts |
Posted - 05/18/2009 : 15:41:04 [Permalink]
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| Maybe you could threaten with a lawsuit. |
Couldn't I create legal trouble for myself if I threaten a lawsuit in which I have no desire to actually file? I remember hearing this somewhere. |
He does know you were operating without a license when you were legally supposed to have one, not sure I would provoke anything in case of any legal risk to you for that. It does sound as if your client is just using that as an excuse to avoid paying you, but there could be some risk nevertheless.
I think it does actually matter to clients in some instances if you do not have a license: at least one of mine said she could not classify the expense a certain way if she paid me more than $600 per year, so I ended up getting a license and all was well. |
"Truth does not change because it is, or is not, believed by a majority of the people."
-Giordano Bruno
"The greatest enemy of knowledge is not ignorance, but the illusion of knowledge."
-Stephen Hawking
"Seeking what is true is not seeking what is desirable"
-Albert Camus |
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Ricky
SFN Die Hard
USA
4907 Posts |
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Help with the tax code
