Hi! If I work for a family member that is an independent contractor how do I go about filling out the tax paperwork for being a sub- contractor. (i.e what forms are needed)?
thanks
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There is no special paper work needed. The person you work for may want you to fill out a W-9 to get your SS number and address. He/She may also want you to show proof of insurance to cover cover everyone if you are hurt on job.
You get out of life what you put into it......minus taxes.
Marv
It depends on your working relationship. If you are working for a family member...that is, you are an employee, then you should complete a form W4, as mentioned above, to tell them how much to withhold for income tax purposes. However, if YOU are the independent contractor, then the family member should provide you with a form 1099 Misc at the end of the year to show how much they paid you and a W2/4 would not be applicable in this case and other than the contract, there will be no 'paper work'.
And be mindful, the IRS has some pretty strict rules on what constitutes being an independent contractor vs. an employee. You can see this in Pub 15A at
http://www.irs.gov/pub/irs-pdf/p15a.pdf
BruceM
thankyou both for the replies... this certainly helps...
my best....
If you are an independent contractor then you will file a sch C. You need to find out what expenses are deductable.Also you will pay SELF-EMPLOYEMENT TAXES on sch SE.Those are the conbinded employee/employer SS and medicare taxes.Also you will need to make quarterly estimated tax payment to avoide a penalty.
Are you sure quarterly payments are required for a sole proprieter? Ive never paid quarterly and have never been questioned or penalized. If it is required they must not enforce it very strictly.
Quarterly payments are only needed when you owe the IRS $_____ or more at the end of the year. I forget the figure for the blank. If you get a refund check every year or only owe $100 or so then you will not need to send in quaterly payments, aka Estimated Tax.Frank DuVal You can never make something foolproof because fools are so ingenious.
I don't gurantee these nummbers, but IIRC, these are the exceptions to having a penalty.You owe less than $1000, Or you have paid in 100% of what you owed last year, Or you have paid in at least 90% of what you owe thise year.So if you have other income which has withold (or your spouse if you file a joint return) then you might not have ever triggered the penalty.Or if you have someone do your taxes they might have gone ahead and figured the pnealty. The requairment is not based on the source of the income, but what the end liability is. Often retired people need to file estimated payments when they live off investments.
Yes, that makes sense. I will have to ask my accountant. When I did them myself I probably was doing them wrong. Now with income from rentals, section 8, and some grants for restoration work it is more complicated than I want to deal with. He may figure in a penalty if it is slight rather than deal with quarterly filing. I need to look into it anyway now that my wife is not working and health insurance is bleeding me dry I may need to do some type of incorporation or split things up to help with that.