anonjj
Mar 28, 2011, 05:04 PM
Hi,
At the beginning of this year, I took a job with a local firm. I interviewed for the gig, was offered the job by email which contained what my monthly salary would be before I showed up for my first day of work. A couple days in to my gig, I was presented with a contract which made me an independent contractor, a SoW etc. It was weeks before I realized I would have to pay SE taxes and the result will make the last three months of work less-than lucrative. For this job, I have a manager who reviews my performance, core hours to be in the office, attend staff meetings, am paid through payroll, etc. much like any other regular employee. My actual duties day to day have little to do with my SoW. I have few expenses to report to the IRS, so it looks like unless I want to play around with a Form SS-8, I'm going to pay a lot of taxes... due in three weeks on April 18.
I've found a new gig where I will be starting work soon on a W2 basis. So that only complicates matters. I can't figure out how to do deductions on my Schedule SE given that I'm married and about to enter employment on a W2 basis.
I spent a few minutes with an H&R Block guy who told me that paying taxes for the contract work should be relatively simple, but that was before I found W2 employment...
... to complicate matters, I've read an answer to a similar question that had something to do with safe harbor provisions for first time contractors... and I have no idea if that helps me at all.
My questions:
* It seems that if I file a Form SS-8 and the IRS decides I should have been a W2 employee, I will not have to pay full SE taxes for the period, even for the work I have already done. Is this the case? Would I even have a shot considering I've signed contracts stating that I'm an independent contractor?
* Are my taxes as complicated as they sound? Should I just pay an expert to handle this stuff for me? I don't have a lot of money to throw around thanks to the taxes I'm about to pay, so if they're really safe and simple and there's nothing I can do to reduce them, I'd rather pay them and have done with it...
* Advice?
~Anon
At the beginning of this year, I took a job with a local firm. I interviewed for the gig, was offered the job by email which contained what my monthly salary would be before I showed up for my first day of work. A couple days in to my gig, I was presented with a contract which made me an independent contractor, a SoW etc. It was weeks before I realized I would have to pay SE taxes and the result will make the last three months of work less-than lucrative. For this job, I have a manager who reviews my performance, core hours to be in the office, attend staff meetings, am paid through payroll, etc. much like any other regular employee. My actual duties day to day have little to do with my SoW. I have few expenses to report to the IRS, so it looks like unless I want to play around with a Form SS-8, I'm going to pay a lot of taxes... due in three weeks on April 18.
I've found a new gig where I will be starting work soon on a W2 basis. So that only complicates matters. I can't figure out how to do deductions on my Schedule SE given that I'm married and about to enter employment on a W2 basis.
I spent a few minutes with an H&R Block guy who told me that paying taxes for the contract work should be relatively simple, but that was before I found W2 employment...
... to complicate matters, I've read an answer to a similar question that had something to do with safe harbor provisions for first time contractors... and I have no idea if that helps me at all.
My questions:
* It seems that if I file a Form SS-8 and the IRS decides I should have been a W2 employee, I will not have to pay full SE taxes for the period, even for the work I have already done. Is this the case? Would I even have a shot considering I've signed contracts stating that I'm an independent contractor?
* Are my taxes as complicated as they sound? Should I just pay an expert to handle this stuff for me? I don't have a lot of money to throw around thanks to the taxes I'm about to pay, so if they're really safe and simple and there's nothing I can do to reduce them, I'd rather pay them and have done with it...
* Advice?
~Anon