Independent Contractor status and TAXES!!?

Question

OK, I have read some other things on here and now I have a lot of questions:

I have done some promotional work like going to summer festivals and stuff and signing people up for stuff (this was for GM mind you) and probably made about 1500-2000 dollars doing this. I filled out something with my social security number, maybe a w9 if that is right? Anyway, now I am seeing that you are only an independent contractor if you use your own tools, well we were supplied everything down to the t-shirts.

So... how will that affect me also on my taxes. I always get everything back because I have always made < 10000 (i am a student) so will I just get hosed this april or what?? (I waitress too)

Someone please help!!!

Answer 1

Sometime before February 28, you will receive a 1099 from GM showing how much they paid you.

And you will need to claim this income on your income taxes.

Your total tax liability will depend on your total income for the year.

As for the "independent contractor" status, there may be expenses you can come up with to offset some of the income. See a tax professional to help you.

Answer 2

No, using your own tools has nothing to do with being an employee or an independent contractor. Many people use their own tools, but are considered employees, and people have jobs as independent contractors that don't require tools. The determination on whether you're an employee or ind. cont. depends on the type of work, and the level of control the person who hires you exerts over HOW and you do the work.

Filling out a W-9 would imply you were considered a contractor - an employee would fill out a W-4.

Assuming that you're not a dependent of your parents or someone else, you can make $8450 this year (if you're single) and not have to pay federal income taxes. If your income was over that, then you'll pay some tax.

Unfortunately, you will owe 15.3% of what you made as a contractor for self-employment tax (social security and medicare). You do get to take half of that payment off your income as an adjustment before your income tax is figured though. But you're still talking over $200 tax on what you made as a contractor.

Answer 3

Check whatever statements were attached to your pay stubs. If you were in fact being treated as an independent contractor, there will be no deductions for either withholding tax or social security. If an employee, both should appear. If you are in fact an independent contractor, then you will owe 15% (approximately) Social Secury tax on your earnings, and will need to file the appropriate returns to pay it. Your earnings are not sufficient to trigger income tax liability. One thing that will help is that the employer should send you, no later than the end of January, either a 1099 form (if independent contractor) or a W-2 form (if employee) showing wages paid and withholding, if any.

Answer 4

Independent contractor would mean that you supply your own tools if any are needed. It doesn't mean that the company that hires you to perform a service can't supply you with everything down to a t-shirt.
You will need to include the income on your tax return and subtract any direct expenses you incurred from it. Unfortunately, the income tax can be zero or a low number based on your taxable income. If you earned $600 (ney of expenses) or more from GM you will have to pay self-employment taxes. This is the social security and medicare tax and it is a flat tax or 15.3%. As a self employed individual you can deduct one-half of this tax on the front of your tax return along with a couple of other things if they apply. I.E. health insurance.