I just received a W-9 from a company I worked with last year... the work was under the table but they paid me by check. The income earned was $8835 how much will that affect me at tax time since no taxes were taken out and they are now going to 1099 me. Is there any way around this?

No way out that I can think of. The banks would have reported a deposit that size under the Banking laws meant to curb money laundering... and the employer reported it, so Big Brother knows that money exists and its tied to you.. If you don't report it you stand a good chance of being caught and with that paper trail, that's not a good place to be. I don't know the dollar value of the hit you will take.. (I've never had to report on a 1099 before).. but do set aside as much as you can to cover it by then.

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Originally Posted by jheron66

I just received a W-9 from a company I worked with last year...the work was under the table but they paid me by check. The income earned was $8835 how much will that affect me at tax time since no taxes were taken out and they are now going to 1099 me. Is there any way around this?

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Yes, the company issue 1099-misc to you. Complete W-9 and check 'exempt payee' unless you know that you are already in trouble with the IRS with under paid taxes.

1099-misc income: You are an independent contractor. 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).
With 1099-misc you will end up paying about 6.2% more taxes as compared to W-2 employee. The benefit is that if you have job related expenses, you can deduct them. http://taxipay.blogspot.com/2008/04/...oyed-sole.html