w-2 or w-9?

Question

WHICH IS BETTER? RIGHT NOW MY BOSS PAYS ME WITH A COMPANY CHECK...THEY DON'T TAKE OUT ANY TAXES SO YEAH, I REALLY LIKE IT....BUT WILL IT BENEFIT ME AT THE END OF THE YEAR? I HAVE TWO KIDS AND I KNOW THAT WITH A W-2, IT ALL PAYS OFF AT THE END OF THE YEAR LOL. CAUSE THEY TAKE OUT ALOT DURING THE YEAR! LOL

Answer 1

W-9 is the form your "boss" used to get your social security number from you. At the end of the year, you will get a Form 1099-MISC, which is also filed with the IRS. If you do not report the amount shown on the 1099-MISC as self-employment income (Schedule C and Form SE), you will get an automatic tax bill from the IRS.

You won't be laughing next April 15th; I guarantee it.

Answer 2

It seems like your boss is not paying taxes on you! He/She is supposed to match your Social Security and FICA! Which obviously is ZERO in your case! sooner or later he will have to pay it! And I knew so many businesses that had to go through bankruptcy because of this! To have a w-2 will always keep you in the safe side with the government! Withheld Federal and State income tax is determined according to how you fill the W-4! the more dependents the less withheld amounts to be deducted from each paycheck! And mostly you wouldn't have to worry about paying any taxes in the tax season and most likely you will receive some returns!

Answer 3

Not only will you get a 1099-Misc, but if you don't have any business expenses because your boss pays for them all, then you will be stuck paying 15.3% in Self-Employment tax on the whole amount that is on the 1099-misc. Plus you will still have to pay the regular income tax on the amount also. If you would have filled out a W-4 then your boss would be withholding Social security and Medicare taxes.....but only at 7.65% or half of the Self-employment Tax because the employer is suppose to match the 7.65% to equal the 15.3%. So in other words by you not filling out a W-4 your boss is making off by not having to pay payroll taxes on you and you are left with the extra 7.65%.

Answer 4

You like it now - but at tax time you'll not only have to pay all the taxes you would have paid if he'd been deducting them, but will pay both the employer and employee halves of social security and medicare - twice as much as if you were an employee working on a W-2. Plus if you owe more than $1000, and you almost surely will, you will also be assessed penalties for underwithholding if you don't file quarerly estimated returns and pay what you owe quarterly.

Answer 5

It may or may or may not benefit you; are your kids in daycare? Do you have a spouse? Do you pay student loans with interest? A W-2 is simply a summary of all taxes and money paid during the year, not a bill. If you owe it doesn't matter if you have a W-2 or not. When you filled out your W-4 (if you did) how many exemptions did you take? That determines what tax, if any, they take out. To answer your question, a W-2 is more helpful at tax time.

Answer 6

If your gross pay remains same, it is better to be an employee and receive W2. When you are an employee, your employer deducts from your gross pay 6.2% social security tax and 1.45 % medicare tax; and your employer also pays the same amount of taxes.

When you are not an employee, you are a contractor, the employer does not deduct anything from your pay check. And you will pay two times of (6.2% + 1.45%) as social security and medicare taxes. You must also make sure to pay proper estimated taxes, else you may be charged interest and penalty.