Update and more information on a serious tax question?

Question

Ok So I am an independent contractor I get paid $8.75 an hour for a 40 hour week I live in missouri I want to set aside money out of every paycheck to pay i guess quarterly. i am not considered self employed i am as i said an independent contractor. Oh just in case i forgot i get paid cash bi weekly how much should i set aside

Answer 1

This is the direct page of the IRS dealing with Estimated Taxes

http://www.irs.gov/businesses/small/arti...

or go to www.irs.gov and order Publication 505

Answer 2

An independent contractor is by definition self employed, so you will owe self employment tax.

Now, the bigger question is, are you legally an independent contractor?  Probably not, if you are being paid hourly and the employer sets your hours and where you work and how you do your work.  They are illegally paying you as a contractor to avoid paying the employer taxes on you - not only do you end up paying more tax, but you aren't covered for unemployment if you get laid off, or for workers comp if you get hurt on the job.

You can file a form SS-8 with the IRS asking for a determination of your status, and the employer will be called to account for what they should have been paying.  A good time to file that is right AFTER you find a new job.

Answer 3

You are the worst example of an abused employee that I have seen posting questions on this subject since I started writing Yahoo answers.  $8.75 per hour the way you are paid is the equivalent of wages of $8.08 per hour.  People do not work as self-employed independent contractors for $8.08 an hour for 40 hours a week.  It simply does not pass the smell test.  

I have a canned explanation to apparently clueless independent contractors and, if you are asking relatively simple questions in this forum, no offense, but you qualify as clueless.  

Some employers try to get around paying employment taxes (social security and unemployment) and other employee benefits like workers compensation insurance by improperly classifying employees as independent contractors. The basic issue is the amount of control the employer has over the worker.  If you are required to show up for work--personally--at a particular time, punch the clock, use the employer’s equipment and are paid an hourly rate, or another set rate based on time served, you are an employee.  If you didn't understand the difference when you posed your question, I would be even more convinced that you are an employee. What is your preference, Slotted or Phillips?  Complete an IRS Form SS-8 to get an official ruling on your status.  This will help you get unemployment if you get fired. When you file your income tax return, you can attach Form 8919 Uncollected Social Security and Medicare Tax on Wages and only pay the employee's half of social security.  You will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.

Answer 4

"Amen" to what "wartz" said.  I agree wholeheartedly with every word of what he said, and just wish I could say it as well.  I really do hope you do what he said about filing the form that that make the government decide if you are an employee or contractor.  I am really getting sick of the way employers get out of their half of employment taxes and also shift the burden of withholding onto their "contractors" who really are employees if they followed the rules.