I was an employee for a small company that was having severe cash flow problems. My boss started paying me with "personal checks" written by hand from the company. He would pay me the net amount that normally would show on my regular paychecks. Turns out he wasn't withholding any tax, FICA, etc for the IRS. Now that taxes are due, he wants to treat all those checks as an advance on 2007 income. Is this legal? Should I go along with it? I believe he will be treating it all as 1099 income eventually for 2007. Along with paying me a gross up amount as 1099 income in 2007.
2007-04-17 06:34:18 · 5 answers · asked by Stephen C 1 in Business & Finance ➔ Taxes ➔ United States
I have filed for an extension. In that extension I figured that I would have to report the income received from those "checks" as 1099. So I made a massive payment to cover the FICA. I already have a w-2 that only covers the real paychecks I received. The company still has no money to produce a correct one reflecting all pay.
2007-04-17 06:51:12 · update #1
Tell him to get you your W-2 for 2006 immediately or you will file a missing W-2 complaint with the IRS. It's his problem (and a big one at that) if he didn't pay his payroll taxes.
Your income earned in 2006 is taxable in 2006 and is NOT an "advance" on 2007 income.
You should have been working this back in Feb! Why have you waited until the last day? You're potentially screwing yourself, you know.
2007-04-17 06:48:26 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Also, if he does not provide you a w-2 but did withhold taxes and you can prove the amount, you should be able to claim this amount even though he did not report or pay it.
Do use a professional, not just a run of the mill tax person.
2007-04-17 06:55:37 · answer #2 · answered by Red3Biggs 2 · 0⤊ 0⤋
US tax payers burden $10.4 Billion. value for unlawful Heath insurance $2.2 Billion. ninety one% of people think of it incredibly is a topic. additionally, that unlawful aliens do no longer pay payroll taxes, extra advantageous than 0.5 of illegals artwork "on the books." sorting out that my job is being taking on via some-one which would no longer even talk English, or have any coaching. and you're telling me to develop my existence? My question to you. How come the USA can shop the borders safeguard in Korea and not right here?
2016-10-22 10:30:56 · answer #3 · answered by ? 4 · 0⤊ 0⤋
No, it's not legal - you worked and got paid in 2006, so that's when the taxes are due for. And he is in MAJOR trouble for essentially withholding the money, but not remitting it to the IRS.
Don't go along with it - you'll be in trouble right along with him. But you'd better call the IRS and tell them about it. How are you filing your taxes for 2006?
2007-04-17 06:45:30 · answer #4 · answered by Judy 7 · 1⤊ 0⤋
Consult a tax lawyer, ASAP!
2007-04-17 06:39:40 · answer #5 · answered by Luey 3 · 0⤊ 0⤋