Tax question; employer not taking out taxes from husband's paycheck?

Question

At first we didn't notice. Then we wondered if we should say anything. Then, when he did say something about it, his employer waved it off saying he'd "take care of it in a few weeks". That was a few weeks ago. He's asked to a few other employees, and they say they don't get taxes taken out either, and they are expected to file on their own.

It seems like his boss was never going to mention that to him, leading him to believe that he'd take care of it himself.

Well now we know, but have no idea how to go about it. What form should we fill out to have taxes taken out or (if we decide to open a high interest savings account and save for the end of the year) how do we calculate how much to saving out of each paycheck?

Thanks in advance for any educated help.

Answer 1

1.  Start looking for another job.

2.  Get form SS-8 and start filling it out.

3.  Put aside 25-30% for taxes.  Put even more aside if you live have a state income tax.

When your husband receives a 1099-Misc, send in the SS-8.  If the IRS agrees with your husband, when you file, you'll use a 1040 and a form 8919.  Your husband would owe income tax and 7.65% fica/mc.  If the IRS *doesn't* agree, your husband will owe income tax and 15.3% fica/mc.

Answer 2

I have been in this situation before and it's not unusual in some types of sales work. The boss doesn't want to deal with hiring a book keeper to hand the additional paperwork involved in keeping track of your taxes. Your husband has been setup as an independent contractor not directly related to the company therefor he is responsible for filing his own taxes at the end of the year. With the IRS he will need to file a  "Self Employment Form" at the end of the year.  Now since he is responsible for his own taxes he will need to find out how much Federal, State and Local taxes to with hold from each check so he will have to contact those three agencies to find out. Since I have no idea what city or state you live in I couldn't tell you how much to with hold myself, you'll have to do it. For more information on federal taxes go to : http://www.irs.gov/   and for State information go to:http://www.taxadmin.org/fta/link/forms.h...

Answer 3

If he is being treated as an independent contractor, which is what it sounds like since his boss isn't holding out taxes, then he will need to file a Sch. C and Sch. SE when he files his 2008 taxes.  It also means he'll have to file a 1040 or 1040A and cannot file a 1040EZ.  He needs to go ahead and pay the IRS and your state estimated payments.  Here's a link for the federal estimated.  http://www.irs.gov/pub/irs-pdf/f1040es.p...  It has a worksheet so he can figure approximately how much he will owe and it has payment vouchers to send in with his payments.  There are two more due for this year.  You'll have to look up your state's tax website online to make estimated payments to them or else go to the state tax office.  The same if your city charges a tax.  If he is an independent contractor then he can write off his expenses on the Sch. C so he needs to keep records of any driving he does for his job (mileage) and keep any receipts for anything he has to buy for his job.  Here's a link to the irs web site that tells the difference in an independent contractor and an employee.  http://www.irs.gov/businesses/small/arti...  Another thing he should find out is if his boss pays worker's comp.  If his boss isn't paying worker's comp then he probably needs to pay it himself or sign a waiver, depending on your state's laws.  Also, as an independent contractor he's probably not going to be covered by unemployment if his boss lays him off.