W9 Tax Form?

Question

I am currently at a job where my boss required me to fill out a w9 form. I have heard a few bad things about it. I'm a single mother of two kids. I'm used to getting about 5k at the beginning of the year when i file taxes. I have heard that by signing a w9 it will affect this and instead of receiving i will owe! I'm so mad. My boss told me it's better that way. I think it's bullsh**. He told me that at the beginning and then told me he really didnt know how it worked and then i heard him telling another new employee you actually benefit from doing that. Im just worried i won't get any money back this Jan or Feb. I guess i know what the form is but will it really affect me? Should i seek for a new job? =\

By the way, im not an independent contractor. I'm supposed to be an "office manager"

I have been here for about four months.

Answer 1

The money you "get" is because in previous jobs you paid taxes.

With a W-9 you are not an employee and no taxes are withheld, so in theory you would have all your money every week, then end up owing the IRS/state and social security.

What your boss is doing is 100% illegal. You cannot be considered an independent contractor if you have to go to his office, use his supplies and work the hours he sets for you. That is called being an employee.

Depending on other income (alimony, etc) you could end up OWING $5000 or more every year, of course this depends on your exact pay and situation.

Also, keep in mind that as a 1099 contractor (which is what the W-9 implies that you are) your boss is not paying unemployment, so you don't qualify for that if you are let go or the business goes under.

Yes, you should seek a new job. AND make sure you take your taxes to a professional this year because you are in for a world of hurt.

Answer 2

I believe your employer is confused between the W-9 Form and the W-4 Form. The W-9 Form identifies businesses or persons working as a business.

If you are an "employee" of a business, you are required to file the W-4 Form for tax with holdings. This is the basis of your return. Most people claim "zero" all the way through the form, but some (those in higher tax brackets, usually) will have various with holdings.

The amount of return is based on your earned income, taxes withheld any earned income credit you might be entitled to, child care expenses and a couple of other variables also determine your return.

So in essence, I believe your employer is confused about the proper IRS Form you are suppose to fill out and secondly, why is the employer waiting until now to have you file the necessary paperwork if you've had this job for some time.

I would check your pay stubs to see if any taxes have been withheld throughout the year. If not, then you may owe, depending on your income level. I would definitely make sure that the W-4 is on file and taxes are being withheld.

Don't go looking for a new job based on this mistake by the employer. If there are other mitigating factors, then feel free to.

Good Luck!

Answer 3

No, you don't benefit from it - HE does. He doesn't pay his half of social security and medicare, you have to pay both halves, so you'll be paying close to twice what you otherwise would. And you aren't covered for workers comp or unemployment - he'd be paying for that too if he was treating you as an employee and had you fill out a W-4 instead of a W-9.

Good luck.

He also doesn't have to do all the recordkeeping and deposits for withholding taxes. And sorry, don't figure on the big refund this year. Depending on your income, you might get lucky and your EIC might cover the taxes you'll owe, so you might break even and at least not have to pay and might even get a refund, but it won't approach $5000. Normally your social security and medicare would have been deducted from your paychecks - on this job they weren't plus you'll have to pay twice as much because you'll be paying his half too, and that will all come out of any EIC amount you'd otherwise get.

If you make around $20,000 for the year, you won't owe assuming the kids are under 17, you'd still get a refund for EIC but it would be under $2000 this year, not $5K. If you'll post again giving your approximate income for the year, somebody can give you an estimate of where you'll stand.

Yes, I'd look for another job - this guy is cheating you, and a single mom of two kids just doesn't need that! And I'd also file a form SS-8 requesting IRS determination of whether you are an employee or not and have to be treated that way
Depending on what you are doing at this job, it's probably illegal for him to pay you this way. If you are for example working in his facility and he determines what hours you work and where and how you do your job, you should almost surely have been given a W-4 to fill out, not a W-9.