AboutJohn L. Tidwell Expertise Unemployment tax law both state and federal; determination of employer employee relationship; the usual 20 commonlaw factors for making that determination; and what makes me a liable employer.
Experience Over 20 years of field audit experience with a state agency
Organizations none
Publications none
Education/Credentials Degree in Accounting from Falls Business College
Expert: John L. Tidwell Date: 7/16/2008 Subject: OFF the Books
Question currently work off the books but my employer pays me with a check. i have
been working there for about 5 years. i also work an on the books job and
im wondering if im able to file the 2nd job as an independent contractor if im
already filing a w2 with my main job. Im doing this because i thought he was
paying my taxes like he told me. i discovered that my boss is not paying my
taxes so i want to do this the right way.
Answer Steve:
If you are working for your employer as an employee, the wages you are earning are being reported to the IRS, income tax and social security/medicare taxes are being with held from your gross pay, which is reported to you at the end of the year on a W-2.
If you are working for the same employer as an independent contractor, which means, your employer is paying you a gross check with nothing being with held from that check for tax purposes. Therefore, you must calculate each quarter your tax liability for that quarter. This tax calculation must take into consideration both your non employee compensation, your employee compensation, and other income that you may also have to insure that at the end of each quarter you have paid your correct income tax liability, social security/Medicare tax liability.
As an accountant, the terms OFF or ON the book indicate some nefarious scheme is a foot. When in actuality in most cases its employment or not employment. No company can survive when it does not account for its income and expenses, that is, all transactions are ON the books.
