I started working for a company in July of this year (2008). My work started as an independent/freelancer status. I filled out an I-9 when I started in July. My employer paid me in a personal check for this work (I was responsible for taking care of the taxes on this).

After one month I started at the company full-time, leaving my freelance association, and becoming a normal full-time employee, with benefits, etc... This started August 1st. I did nothing as far as a new tax form (so I assume I was still being treated under the I-9 form I completed the month prior). My employer paid me in personal checks for my NET earnings (withholding a certain amount for taxes). These withholdings were not written anywhere on my checks.

My employer says my taxes "haven't been processed," which is code for, he hasn't paid them, even though he's withholding them from my checks. I do not want to be held responsible for the taxes my employer is not paying to the government! And with no proof of those withholdings on these checks, I don't believe I'm on solid ground.

This pay situation continued until now (Oct 22), when finally, after approaching my employer, I have filled out a W-4 form, which I believe is a more appropriate form for me (am I wrong?).

So right now I have 2 questions:
1. Was there something bad about being filed under the I-9 tax form for the past 2 months or so, even though I was working as a normal, full-time employee?
2. What do I need to do to cover myself as far as proving there taxes being withheld from my earnings, and have been for the past 2 months?

Thanks,
Glen

Read about W2 vs 1099-misc and how you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.

That's a good read, but I'm not using a 10-99, so I'm not sure if that applies to me. Yes, my employer considered me a independent contractor for the first month of employment, but he used a I-9, not a 10-99 form. As I said earlier in my post, I continued to use this I-9 for a few months, while working as a full-time employee (not a contractor). Now I have just filled out a W-4, is this the right move?

I reiterate:
1. Was there something bad about being filed under the I-9 tax form for the past 2 months or so, even though I was working as a normal, full-time employee?
2. What do I need to do to cover myself as far as proving there taxes being withheld from my earnings, and have been for the past 2 months?

Thanks,
Glen

Glen:

Now that the W-4 has been completed, you have proper documentation showing your employee status. That was the correct move.

Hopefully, you made photocopies of the checks you received and have some record of how much your gross pay was supposed to have been.

If so, you should be able to determine if the proper withholdings were done and recorded when you get the W-2 in January.

If not, you will have to decide if it is worth confronting your rmployer over this issue.

I don't think my enployer is paying my tax

Does your check stub show withholdings under the following categories:

- Federal Income Tax Withheld (FITW)
- State income Tax (SITW)
- Social Security/Medicare (SS/MED) (also listed as OASDI)

If it does, then the money is being withheld.

If not, then you may be getting paid as an independent contractor.

If the employer is not withholding FICA taxes you are working as an independent contractor. You must file your tax return if yourself employed income is $400 or more. You will report your income and business related expenses on schedule C or C-EZ (Form 1040). Then you put net income (or loss) on line 12 of Form 1040. This income is subject to SE tax at 15.3% (this is shown on line 57 of Form 1040). Your U.S. Tax Return: Tax Filing by Self Employed Sole Proprietor or Independent Contractor

If you think that the employer is wrongly classifying you as a contractor instead of a regular employee, file Form SS-8 with the IRS. Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Firms and workers file Form SS-8 to request a determination of the status of a worker for purposes of federal employment taxes and income tax withholding.