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
Question I work for company which employed me as 1099 contractor. Do I have to pay quarterly taxes if so what are mandatory and when is the due date.
Which forms do I have to send?
Do we have to pay once we received the payment?
Also I received employment benefits do I need to pay taxes on that too.
Answer Rich:
If you are an independent contractor, that is, you have your own business that is ongoing then you would report the "sales" of your services as you would any ordinary proprietorship business. Sales minus expenses equals profit to calculate income and self employment taxes. These taxes are estimated based on last years income taxes paid and the probability of the income taxes that should be paid this year. You will report each quarter using form 1040 ES.
However, if you were employed it would be hard press to call you an independent contractor. Especially, if you are receiving employment benefits, your "employer" will be hard press to justify to the IRS that you are an independent contractor. Even more hard press to explain and justify to your state unemployment department that you are an independent contractor an not an employee. As we know the various trust funds are quite low and they will not be humored with this veil attempt to cover up employment with a 1099 and not a W-2.
I have railed for 30 years the disservice to workers by employers who attempt to cut their tax liability by hiring people to work and call them 1099 workers. If you can not afford to treat people honestly then do not treat them at all.
Rich, you will report the estimates 4/15; 6/15; 9/15; and 1/15; of each year.
