If you work two different jobs and one of them takes taxes out and the other one is 1099 (independent contractor), do you have to file the taxes for the 1099 job? If you don't file for the 1099 job then what are the risks/liabilites that you may occur?
2007-03-27 07:52:48 · 11 answers · asked by Anthony S 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
All income must be claimed.
If you don't file the 1099 income, when it is reported to the IRS you are going to get a letter from them stating you owe, for taxes, social security, medicare and interest and penalties. That is when you will need to contact a tax professional to help you......so, do it right the first time. It isn't worth it.
Make sure you are keeping records of all out of pocket expenses incurred by you so that you may work as a sub-contractor or self-employed individual.
http://www.irs.gov/businesses/small/article/0,,id=115044,00.htmlal....
good luck & bless
2007-03-27 08:03:42 · answer #1 · answered by Wood Smoke ~ Free2Bme! 6 · 5⤊ 0⤋
Oh, yes, of course you do. Why wouldn't you? It's income.
If you don't list the 1099 job on your taxes, you'll get a bill from the IRS for the extra taxes, plus interest, and possible penalties depending on the amount. This could take a few months or even over a year. They'll show taxes on the whole amount of the 1099, since they wouldn't know about any deductions you have.
It's not a risk, it's a guarantee that you'll get caught.
2007-03-27 10:57:12 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
You will run the risk of owing taxes when you do file. Here's a more sane solution. Each time you receive payment for services on the 1099 job, take out 25% of the gross. Set this aside and hold it until you file taxes. Next keep a record of your expenses as this will be used to lower your 1099 income. You will find if you do this, you'll generate a refund instead each and every year.
V Banks
Flat Rate Tax services.
2007-03-27 09:40:17 · answer #3 · answered by Justheretohelp 3 · 0⤊ 0⤋
Yes absolutely the 1099 tax liability is still reported to the IRS
Probably the IRS will send you a letter about a month or two after you file your income tax for the amount of tax owed plus interest and penalties.
Or you could be called in for a general audit for the amount of income not declared, and what ever else they can find.
2007-03-27 18:28:54 · answer #4 · answered by apreston60 5 · 0⤊ 0⤋
Yes, you have to include your 1099 on your taxes. The income on your 1099 will be reported on your Schedule C. Make sure you have legitimate expenses on that other job to lower your tax liability.
It is a law for all the employers to submit 1099s to the IRS on or before January 31st.
2007-03-27 08:44:42 · answer #5 · answered by Shayne 1 · 1⤊ 0⤋
You have to report ALL of your income. The 1099 may cause you to owe. So be it. Get out the checkbook.
1099s are also reported to the IRS. If you "forget" to include it, you will still receive your refund this year but in about a year you will get a letter from the IRS asking about it. Then you will have to pay taxes, penalties and interest. The penalties and interest will be retroactive back to 4/15/2007, not when the IRS discovers the omission. Short term gain.....long term pain.
2007-03-27 08:06:26 · answer #6 · answered by Wayne Z 7 · 3⤊ 0⤋
The IRS already knows about the earnings since they have a copy of the Form 1099. They'll just recalculate your tax liability after adding it in and send you a bill for the difference, plus penalties and interest. When they do that, they won't allow any business expenses that you might be eligible to claim so they'll really ring your bell with the tax bill.
The chance of getting caught on this one is virtually 100% -- you'd be drawing dead.
2007-03-27 10:01:38 · answer #7 · answered by Bostonian In MO 7 · 1⤊ 0⤋
You HAVE to declare the income on the 1099. The risk involves the fact that IRS WILL come after you. Interest and penalties WILL be assessed for under reporting your income (interest on the late payment of taxes.
Sorry but this is a no-brainer. The IRS knows you were paid this income because the payor reported the income to the feds.
2007-03-27 08:07:14 · answer #8 · answered by JessicaRabbit 6 · 1⤊ 0⤋
When the company that issued you the 1099 form files their taxes in 07, the IRS will send a notice to your house (or the address on the 1099form) for all the tax money due to the IRS that you didn't pay when you filed your taxes. If you don't pay it or you just ignore it, they will then garnish your wages from your "taxed" job. I think it's up to 25% of your wages until the debt is paid. But, once I saw a garnishment for 100% because the employee was in debt over $30k to the IRS. They got mean and serious on him! Please beware and file using the 1099. you will pay for it later if you do not.
2007-03-27 08:05:40 · answer #9 · answered by chellimerrett 2 · 0⤊ 2⤋
If you don't file your 1099, but the employer does, then you will be billed by the IRS..
2007-03-27 08:00:13 · answer #10 · answered by aksnowman31 2 · 2⤊ 0⤋