I need help on my Taxes?

Question

I live in Texas and the guy ive been working for has been paying me cash(he doesent take out the taxes) ive worked with him for 6 months the total came out to $5,872.50 and that im suppose to multiply by .15 which is 15% right???

well i did that and the total was $880. So is that what im suppose to pay for taxes? And do I have to pay all of it at the same time?

will i get charged more because im single and no dependents?

Where do i pay the taxes? can i pay online?

Answer 1

You are really being paid under the table and in a way this presents a problem. The 15% you refer to is about what your total Social Security contribution would be. In a normal employer/employee relationship the employer would be withholding taxes including one-half of your Social Security. The employer would be paying the other one-half of your Social Security bill. It's a cost of doing business. By paying you cash and withholding nothing, the employer is saving himself money and shifting the expense onto you. Normally, giving the numbers you mentioned, you would be paying half of the Social Security, or about $440. The employer would cover the other half. This would not be a part of your income, it would be the employers share of your SS contribution. As it is now, he is paying nothing and you will have to pay it all. Plus, in addition to that, there is your Federal income tax, which is separate and depends on a lot of factors including gross income, exemptions and dependents, and deductions. So it is really impossible to answer here except to say if the employer is not covering half of your Social Security then you are getting screwed.

Answer 2

Actually, the self-employment tax is 15.3%. That's in addition to whatever income taxes you'll owe. If that's your entire income for the year, you wouldn't owe federal income taxes, just the self-employment tax. If you had other income during the year, then you might owe income tax so would have to calculate that.

The self-employment tax is the same no matter what your filing status is, but income tax, if you owe any, is higher if you're single with no dependents.

You are supposed to pay quarterly if taxes aren't deducted from your pay. There's a form 1040-ES, which is for paying estimated taxes quarterly. You can download it, with instructions, from irs.gov. It gets sent, along with a check, to the IRS - you can't at this time do it online. Then when you file your return after the first of the year, you'll figure your actual tax, and subtract whatever quarterly payments you made. The last quarterly payment is due January 15. If you don't make the payments but just pay it all with your return, you'll probably be charged interest, and possible penalties.

Answer 3

Your "employer" is (incorrectly) treating you as an independent contractor so he can save on Social Security taxes he would have to pay on your behalf. This is risky and you need to be careful, although he is the one who will get in trouble.

You are going to have to file a return with the Internal Revenue Service, including Schedule C and Schedule SE to report your income and calculate your Self Employment taxes. You may be able to reduce your include if you had expenses related to your job with him. Your self employment taxes, based on this income, would be $830. You will have to pay that all at one time, unless you can get the IRS to set up installments (not likely for this amount). An alternative would be to make estimated payments now and in January, then the balance in April so you do not have to come up with the cash all at once.

You can file online. Go to www.irs.gov. Click on e-file on the left hand side under IRS Resources.

If you are single and have no dependents and have no other income, you will not have any Federal Income Tax to pay, just the Self Employment tax. Texas, of course, does not have a state income tax.