How am I sapposed to be doing my taxes?

Question

I work at a hair salon and my boss does not take out taxes. She says that we will get a 1099 form at the end of the year and we have to pay our own taxes. I was told that she should be taking taxes out of my check every week since I am considered an employee. Is this true? Or can she continue to pay us our full amount and we pay our own? Im confused!:)

Answer 1

It is the law.
She needs to be taking them out now otherwise you'll have to pay a lot.

Answer 2

If she just rents you space and you buy your own supplies and set your own terms of work, then you fit the rules for an independent contractor. If she pays you an hourly rate, and controls your terms of work like hours you are there, then you are an employee.

If you're an employee, she should be taking out taxes, paying employer taxes, and giving you a W-2 at the end of the year. If you are a contractor, you'd legally get a 1099 and would have to keep your own records, and fill out a schedule C showing your income and allowable expenses, a schedule SE to calculate your self-emploiyment tax - the numbers from the bottom of the two schedules will then transfer to your form 1040 to calculate your total tax.

Answer 3

I have canned explanation to apparently clueless independent contractors:

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. If you are required to show up for work--personally--at a particular time, punch the clock, use the employers equipment (except for small tools and things that an employee in your trade normally pays for.) and are paid an hourly rate, you are an employee. If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips? Complete an IRS Form SS-8 to get an official ruling on your status. This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employer's half of social security. You will still have to cough up all the income tax.

Answer 4

If you are an employee, she must take taxes out of your pay and give your a W-2, not a 1099.

If it is legal for her to give you a 1099, and not a W-2, then you are an independent contractor and not an employee and she is not required to take taxes out of the money that you receive.

Answer 5

Your boss is treating you a self-employed individual, which is why taxes are not withheld from your earnings.

You will need to pay estimated taxes to the IRS quarterly. See IRS Form 1040-ES for more information. http://www.irs.gov/pub/irs-pdf/f1040es.pdf

You didn't mention what state you live in, but you'll also have to pay estimated taxes to your state. (Unless your state doesn't have state income tax: AK, TN, TX, WY, NH, FL, NV, SD, WA.)

Answer 6

Your boss could be asking for big trouble, She should be paying social security for you and deducting same from your check, she should be withholding income tax and state income tax if there is one. If someone gets miffed with her and reports the facts she in deep do do.!!!

Answer 7

You're either an employee or an independent contractor. Get to the bottom of it. If you don't, you could get in trouble with the IRS. She can to but worry about yourself first.