My husband's new employer doesn't take out for taxes..we have to do it?

An awful lot of folks -- including a lot who should know better -- are jumping in and automatically assuming that your husband is properly classified as an independent contractor. This is frequently NOT the case. The mere fact that you refer to it as an employer indicates a high probability that your husband is actually an employee, not a contractor.

A growing number of businesses are trying to illegally evade paying payroll taxes by classifying their employees as independent contractors instead of as employees. Unfortunately for them, the LAW decides who is a contractor and who is an employee, not the employer or employee. This is a hot-button issue with the IRS and these businesses are being slammed with stiff penalties when they are caught -- and most of them are caught.

The principal factor in determining if someone is an employee or contractor is who has direction over the work being done. If the business paying for the service calls the shots, provides the tools, methods and facilities to do the work, sets work schedules, etc. then the workers are employees. If the person doing the work decides how the work is done, provides their own tools, sets the work schedule, and can send anyone else to do the work, then he'd be a contractor. A good example of a contractor is the painter that you hire to paint your business' building or the flooring installer who installs new carpeting. On the other hand, if you hire a janitor who also does those jobs as well as other janitorial work, he would be an employee.

The first thing that your husband MUST do is to file a Form SS-8 http://www.irs.gov/pub/irs-pdf/fss8.pdf with the IRS to get a formal ruling on his status. He needs to do that NOW so that the matter can be resolved before tax season next year.

If you put the money in a bank account and keep it until the the end of the year, then you will get hit with a penalty for not paying sooner.

You do not have to send a payment every time you get a check. You have some flexibility. You must pay 22.5% of each year's taxes by April 15 of that year, 45% by June 15, 67.5% by September 15, 90% by January 15 of the following year, and all 100% by April of the following year.

Um, why? Is your husband an employee or a contractor? Your husband probably needs to look for another job if he is suppose to be an employee. Not withholding income and FICA isn't an option for employers. That be the law.

If he is a contractor, he is required BY LAW to make quarterly payments. Look up "estimated taxes" or 1040-ES on the IRS website.

It seems that your husband is a self employee where the employer will not deduct or withheld any tax's. The IRS will not force the employer to deduct tax's from your husband. It is your responsibility with your husband to do so. The IRS provide form 1040ES http://www.irs.gov/pub/irs-pdf/f1040es.pdf?portlet... to help you figure how much your net income will be each 3 months (Quarter) then you figure how much tax will be. Then you need to mail to the IRS as per the address provided one payment each quarter.

If you arrange to issue the 1040ES forms, you will be able to mail them with payments on time. IRS want us to pay the first Quarter months (1,2,3 by April 15) Second Quarter by June 15, Third Quarter by Sept 15, 4th Quarter by the 15th of January of the following year.

holiday is a income, no longer an entitlement. there is no regulation that publicizes an organization has to furnish an worker ANY paid holiday time. That reported, the organization generally abides by technique of that is own rules. i could be keen to wager that the handbook you point out spells out precisely how an workers is going approximately soliciting for holiday time without work and what standards must be met earlier this is granted.

You can either have a savings account set up to pay taxes when you file or you can make estimated tax payments. The form is at irs.gov

Be sure to save for state taxes and city taxes if needed.

At tax time in April you pay what you owe.

Put away about 25% of your pay in a savings account

^ depending on your tax bracket

Employers that usually do this, don't offer a 401K

I would love to see you start thinking about opening a ROTH account and putting away $5,000 a year towards your retirement. Charles Schwab, Fidelity Investments, TD Ameritrade are all good companies for this

talk to a tax person and or H R block person so they can give you an idea of what you make and what taxes you are going to have to pay at the end of the year..

and yes, it is a good idea to get a separate bank account for this..

it sounds like he is paying your husband as an independent contractor, and yes, you will file this income on Sch C and also SE to calculate your self employment tax, approx. 13.3% of your Sch C 'net' amount

you probably need to get the form SS8 from www.irs.gov, complete and submit to IRS for them to determine if you are being classified correctly

Very good daily detailed written records and receipts of all of the ordinary and necessary expense of the business operation is one of the NEEDED requirements for any one that is involved in any type of self employed independent contractor business operation.

You would be a self employed independent contractor with your own business operation and your ORDINARY and NECESSARY business expenses that you NEED to have GOOD detailed daily written records of for this purpose will HAVE to reported on each separate LINE of the schedule C of the 1040 tax form for this purpose.

And here you go using the below information should help you get started for your first year as a self employed independent contractor and as you progress and your business starts to grow you may even need some good professional assistance with it for your future.

Schedule C and the SE of the 1040 federal income tax return read each line when you start at the top of the page on the schedule C for your self employed independent contractor business operation your name is fine your social security number is fine and your present home address can all be used for this purpose just do NOT try to make it complicated and read each line and word and understand what it says and do what it says and then you should NOT have any problem.

You can also find the line by line instructions for the schedule C by using the www.irs.gov website and using the search box for the schedule C 2010 Instructions for Schedule C (2010) 2010 Table of Contents Profit or Loss from Business

http://www.irs.gov/instructions/i1040sc/%E2%80%A6

Specific Instructions

http://www.irs.gov/instructions/i1040sc/%E2%80%A6

BUT GOOD detailed records are really necessary for your business operation to succeed.

For your 1040 Federal income tax reporting you would use the below enclosed information for this purpose.

Use the search box at www.irs.gov for Publications and Forms for the Self-Employed

http://www.irs.gov/businesses/small/arti%E2%80%A6

All of your gross income from all sources of worldwide income will be reported on your correctly completed 1040 federal income tax return.

Using a receipt book to make a receipt for each time that any one pays you in any way or item or trade for the amount of $$ value that is received at that time and totaling the gross self employed income for the tax year with any other 1099-MISC income that is received after the end of the tax year and entering the total gross $$$ value amount on the schedule C line 1 GROSS receipts from your trade or business

In general, taxpayers may deduct the ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business. Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

You would have to be sure that you handle your business deductions correctly for your business operation.

For instructions and forms go to the IRS.gov website and use the search box for publication 334 a very good place to start with examples.

Publication 463 Travel, Entertainment, Gift, and Car Expenses

Use the search box at the www.irs.gov website for Small Business and Self-Employed Tax Center

Filing Season Central is your one stop assistance center for filing your business returns. This includes Highlights of Tax Law Changes, Tax Tips, and more.

2 of the seven tax tips for starting a business enclosed below.

Go to the IRS gov website and use the search box for the below referenced material

*Publication 4591, Small Business Federal Tax Responsibilities (PDF 470.1K)

http://www.irs.gov/

http://access.wa.gov/business/taxes.aspx

Hope that you find the above enclosed information useful for your situation and good luck to you. 09/15/2011