please help with taxes?

Question

my mom always did my taxes on her computer but now we arnt really on speaking terms. i worked for the solon inside of walmart until about a month ago, now i am working for a nother solon that is just me and the lady that owns it. she pays me in full and doesnt hold any taxes out. when it comes time for taxes what do i have to do. i am clueless when it comes to this. please help

Answer 1

The lady should issue you a form 1099 as an independent contractor. You fill out Schedule C, self-employment income, as part of your 1040. You show what you made less your legitimate (reasonable & necessary) expenses. Also complete an SE, for self employed payroll taxes

Forms are available on the irs website: www.irs.gov

Answer 2

You need to keep very careful track of what you received from the salon owner and what your received in tips.

We do not know exactly what your relationship to the salon owner is. Did you set your own hours, bring your own tools, get paid only for the number of clients you serviced and merely pay the owner a percentage of the total or a chair rental fee? If so, you may rightfully be an independent contractor and you will receive a 1099-Misc at the at the end of the year. ICs often need to put 20-40% of their income aside for taxes and it can be a shock when they get the bill.

If you didn't do any of these things and were paid a flat salary plus tips, your employer is supposed to give you a W-2 (there are rules as to how classify you), withhold the proper taxes, etc. The big deal are the payroll taxes. Normally you pay half and an employer pays half. ICs pay both amounts. The employer also covers you with unemployment insurance so if you get laid off you can get it.

Answer 3

It's a little complicated - you probably need to pay someone to do your tax for you. You might be able to do it through something like TurboTax but it could still be tricky.

Keep good records of what you are paid at your current workplace, and of any expenses like chair rent, supplies, or anything else that is for your work.

Depending on how much control you have over your work and how much the owner controls, she might be paying you illegally the way she is, and might really be required to take out tax and pay employer taxes for your work. If not, you'll end up paying about twice as much for social security and medicare as you would working as an employee, like you did at the salon in WalMart.

Answer 4

Start putting aside 25% of your paycheck. If she continues to do this, you can pay quarterly next year to avoid one huge payment. Since you will only have about 2 months this year, it's not that big a deal. Do you taxes as usual and you will likely owe (hence putting away 25%). And find a different job. This lady is going to get into huge trouble because she is not paying her portion on the FICA taxes (employers have to match what the employees pay), unless you are an independent contractor and not an actual employee- in which case you need to get an accountant to help you out with your taxes or you will wind up in a world of trouble and will be getting different types of forms from her!
If you do not get a legit W-2 for 2007(assuming you are an employee and not a contractor), seriously, find another job as quickly as you can. It's going to cause you a lot of problems in the future.