If one is hired by a small business ower, and they sometimes pay $ and/or check. The employer stated paperwork would be completed for a W-4 (employee has been employed for 7 months), but they were never issued/completed. Also, some employees are on the payroll system and some are not. When the non-stubbed business payroll checks are issued, the memo section indicates; hours worked. Is something wrong here?
2006-08-04 23:13:01 · 3 answers · asked by S.G. M 1 in Business & Finance ➔ Taxes ➔ United States
Yes, something is definitely wrong there. It could pose a liability for you, as the IRS will come to you first for the taxes. I had the same situation when my boss decided I was a contractor. What I did was ask the IRS for a determination and it turned out I did not meet the criteria of a contractor. We settled for me to pay interest and penalties for my share of the tax, and they went after my boss for everything else.
Your boss is required to deduct and remit taxes to the appropriate agencies and provide you with a check stub or separate document detailing the deductions. If he is not, by all means bring it up. If he is resistant or defensive, start taking notes and document everything, including copies of your payroll. If you feel like it, call the labor board. That's your best place to start.
2006-08-05 04:33:19 · answer #1 · answered by misslabeled 7 · 1⤊ 2⤋
Yup - not an totally unusual situation, but not legal either. All employees should be filling out a W-4, be on the payroll system, and have taxes taken out. Also, the employer should be paying the match on FICA. There are strict timeframes for this money to be deposited to the IRS after payment to the employee is made.
Employees can be paid cash or checks - either is legal, but in either case the proper deductions and paperwork apply.
The employer is really looking for trouble with the IRS. The employee is still responsible to pay taxes on whatever is earned, no matter what the employer does.
Rules are different for independent contractors, but this doesn't sounds like it's the case here.
2006-08-05 11:07:32 · answer #2 · answered by Judy 7 · 0⤊ 0⤋
Sounds like a small time employer.
Could spell impending disaster for employess when the employer is lax on getting paperwork completed like W4's.
Come tax time, you'll know where you stand.
Could get to be a real tax mess unless you take steps now to prepare for deadline day.
2006-08-05 06:22:48 · answer #3 · answered by Anonymous · 0⤊ 0⤋