I work for an employer and he is giving me 1099.
I have to pay all the taxes.
Can I open a SEP account (Retirement Account like 401)
2007-07-20 07:13:46 · 2 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
You may want to check your working relationship with your employer. If you receive a paycheck in which taxes are withheld (such as social security, federal, and medicare) and at year end you receive a W-2, then you are an employee.
If you receive a check each week with NO taxes whatsoever taken out and you pay all the taxes as you indicated, you are a subcontratcor and thus, self-employed.
Since you are self-employed, the SEP plan is a great option to take. SEPs will allow you to contribute up to $44,000 or 25% of your net income (after the contribution and after the dedcution of self-employment tax), whichever is lesser.
Good luck and check with an accountant/CPA for more advice or with a broker (such as Merrill Lynch) who specializes in retirement accounts.
2007-07-20 10:41:48 · answer #1 · answered by NoNickname 2 · 0⤊ 0⤋
If you are receiving a Form 1099, you are NOT working for an employer, other than yourself. You're self-employed. If you're self-employed you CAN open a SEP.
2007-07-20 14:21:48 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋