My boss is currently not taking taxes from my checks. He said he will do this for 3 months...How is this going to affect me with taxes at the end of the year??? I only make about 25,000/yr. so would it be in my best intrest to have him take them out asap? I also have a dependant if that matters at all and I attend college. Thanks for the help to anyone!
P.S. Cus I know how these politicians and attorneys work with their sneaky ways....
2006-10-16 03:24:48 · 10 answers · asked by jc207 2 in Business & Finance ➔ Taxes ➔ United States
Unless you have provided your employer with a letter of indemnity, stating that you are taking responsibility for your own taxation then your employer must pay tax.
This may be a genuine Golden Hello which is actually being grossed-up by your employer but you will need to make sure.
Probably best to just let it slide, then if things don't work out, you can use it as a blackmailing opportunity.
_
2006-10-16 03:25:35 · answer #1 · answered by GoogleRules 3 · 0⤊ 2⤋
As long as he correctly reports how much you've earned it and already withheld, it shouldn't make a big difference for only 3 months unless your income was larger. He must withhold social security tax though.
At year end, your boss/company will anyways have to reconcile social security with-holdings so he wont "get away" with that much.
By not withholding fed & state taxes you will have more to spend now than if he over withholds and you have wait for a refund to be processed no earlier than January next year.
If he doesnt withhold enough and you owe on April 15, then just think - you had that extra money to use for an extra 6 - months than if he would have withheld it
2006-10-16 12:17:21 · answer #2 · answered by goldenboyblue 3 · 1⤊ 0⤋
Is he at least withholding OASDI and HI (Social Security and Medicare?) If not you are going to be short on your contributions record because nothing will get credited to your account by the Social Security Administration. Real bummer when you come to retire (or maybe not so much depending on how we plan to fund it the next few decades!)
But I digress. Sounds like he is taking you for a ride. I agree with others who think you will most likely have a minimal tax issue but the FICA situation needs to be sorted.
Only you can decide whether to report your boss but at least you have some information from several people on which to base a decision now.
Good luck with this.
2006-10-16 14:22:58 · answer #3 · answered by skip 6 · 0⤊ 0⤋
There are specific irs rules about who can be considered an independent contractor, so the employer isn't required to take out taxes or pay half of the social security. The employer doesn't just get to make that decision arbitrarily. If your job doesn't meet those rules, he isn't allowed to do this. You don't give enough info to determine whether or not your job can be classified as an independent contractor.
2006-10-16 12:11:31 · answer #4 · answered by Judy 7 · 0⤊ 0⤋
If you are a head of household with one dependant age 16 or under on a 25K income you will have both child tax credit and earned income credit plus the possibility of education credits. Due to these three factors you most likely have no federal income tax due and will be in line for a refund of up to $ 1,960.00 without having any federal income tax withheld from your wages.
2006-10-16 12:02:08 · answer #5 · answered by acmeraven 7 · 1⤊ 0⤋
If he's not paying the employer's share of Social Security & Medicare Taxes, you're not only going to have to pay your share at the end of the year, but his share as well. For three months of pay @ $25,000 per year that's $956.25, half of which, $478.13, are his employment taxes. He's taking you for a ride.
2006-10-16 10:52:41 · answer #6 · answered by jim 6 · 0⤊ 1⤋
What your employer is doing is......helping himself at your expense!
Employers are required to match whatever is supposed to be deducted for your FICA taxes. By not deducting taxes from pay checks, he's lowering his payroll tax obligation. In turn, you could conceivably OWE tax to the IRS when you file your tax return. In addition, you are cheating yourself out of future Social Security benefits when you retire.
Good Luck
2006-10-16 10:32:11 · answer #7 · answered by Anonymous · 0⤊ 1⤋
This sounds extremely fishy. Is this income without taxes going to be reported to the IRS? If so, demand that taxes are taken out. If not, you are being paid "under the table" and will have to make your own decision on this.
He may have some reason to do this, but I don't know what it would be.
2006-10-16 10:27:08 · answer #8 · answered by Jenyfer C 5 · 1⤊ 2⤋
It is illegal for his to do that. Get the taxes taken out the way you filed your W4 asap. If he doesn't comply report him.
2006-10-16 10:32:52 · answer #9 · answered by in love with superman 3 · 0⤊ 1⤋
If he doesn't pay them it means you will be responsible for his part also. He is running a scam.
2006-10-16 10:32:06 · answer #10 · answered by Thanks for the Yahoo Jacket 7 · 0⤊ 1⤋