Tax question (US)

[HybridRenderer]

Ok, I still new at the tax thing and have a question for people who know about this kind of thing:

 

I haven't received a 1099 form from my biggest employer last year. I would sure love to not pay taxes on this income. And, it's my understanding that if I don't get a 1099 form from this guy that means he's not deducting that money from his income and he'll end up paying all the taxes for that money. Again, something else I would love.

 

But I'm wondering what the dangers are of this. Can he still deduct that money on a random line in the tax form? And then there would be that income floating in space that's never been taxed?

 

And of course there's that audit thing. Will the IRS care if it wasn't me who paid the taxes for that income?

 

Uf... how complicated. Can anyone give me advice on this?

[Ernest Burden III]

I haven't received a 1099 form from my biggest employer last year. I would sure love to not pay taxes on this income.

You pay income tax on your income. You cannot control what others do, but none of that relieves you of your responsibilities.

[William Alexander]

It does not matter if you got the 1099. If this is your largest source of income, you need to claim the amount you were paid. The 1099 is a cross reference form for the IRS, accounting checks and balances, you know.

 

You want an audit? Spend $8000.00 hard cash funds more than you took in. This is an example of not claiming funds paid and will get your tax number flagged for an audit.

 

If your client ends up paying your taxes, you maybe in a world of hurt. This would indicate you are no longer a subcontractor/independant entity or in others words you are an employee-for all of your contracted work. One of the first things they look at in an audit and it's the auditors view that counts-you are NOT inocent until proven guilty.

 

Pay your taxes..... or be scared..... very scared!!!!!!

 

WDA

[HybridRenderer]

Ok, you guys have me suffitiently scared.

 

I'm really not trying to cheat the system, just trying to figure it out. No one's ever given me any explaination of taxes. And every year I just go down to H&R Block, throw them my papers and just say "do it".

 

I was only thinking that logically if someone else is paying the taxes for that money I made then that would cover it as far as the IRS is concerned.

 

But your guys's logic has a lot more logisticy than mine. :angeuhoh:

 

(logisticy?)

[Ernest Burden III]

just trying to figure it out. No one's ever given me any explaination of taxes.

Running a rendering business is a real business. But no-one get business training along with rendering training. Judging from their general lack of business skills, I would surmise that most architecture schools do not teach general business practices, either.

 

I was only thinking that logically if someone else is paying the taxes for that money I made then that would cover it as far as the IRS is concerned.

It's never that easy. First of all, do not assume the IRS is smart enough to figure anything out that they are not explicity told. Second, what they do figure out is often wrong. Just because you do not get a 1099 it does not mean the client is paying tax on the money. All it means is they are ignorant to their responsibility to provide it. Or they couldn't be bothered. Either way, if you have income you are required to report it. If you have written proof that the client was somehow paying taxes on the amount you might have a point, but don't count on that. And then ther is the issue mentioned--you might lose rights to your work if you are seen as an employee, but don't worry too much about that, if you are an employee then the employer must pay your social security taxes (oh, wait till you see how much that will cost you as a freelancer) and if you are no longer needed you can go get unemployment. So that ain't happening, either. The guy is just lazy.

[William Alexander]

First of all, do not assume the IRS is smart enough to figure anything out that they are not explicity told.

Thats the norm. But Auditors get paid to think out of the box. The question is what box?????

 

Ernest is absolutely right, it is a business. Moving from a self employed freelancer scrambling to get as much work as possible [to pay last years employer contributions & make this years qtlry ones] to one who is running a successful business can be two very different animals.

 

rgrds

WDA