A tax question for you guys...
Posted on: June 2, 2007 - 8:41pm
Offline
A tax question for you guys...
Well, I just got a new job awhile back, and I got my first paycheck. I'm getting paid $10/hr, and I worked 25 hours that week. When I got my check back it was for $250 even. I found that weird in that they didn't take out taxes. I talked to them and I guess I have to do that myself. However, I'm not exactly sure how exactly I should take care of it. I was thinking that I would just have to take out a specific percent out of each check, then deposit it into a checking account. At the end of the year, that should cover the taxes and such. Does that sound accurate? I'm kind of in the dark here.
JESUS SAVES!!! .... and takes only half damage!
- Login to post comments
You are in the US, right? If you are, you probably need to check into filing quarterly estimated taxes in order to avoid a penalty at the end of the year. The form is available online, but your best bet would be to check with one of the franchised tax services available (i.e. HR Block). Not real sure why your employer is not taking out taxes, but if you are considered self-employed/consultant then not only do you need to consider estimated taxes, but you will also want to look at any deductions you can take for expenses related to your job. It is confusing....check with one of those firms. They are relatively inexpensive and make sure you ask for a consultant that has a few years of experience. I have some experience, but it is very limited. Hope this helps!
It sounds like you'll need to file a 1099, which is for independent contractors, or self-employed folks like jce mentioned. The independent contractor status can be fun, because you can claim all kinds of things as expenses, but it also requires some discipline as you pay your taxes at once at the end of the year. You may have the option of paying quarterly rather than yearly(again, jce pointed this out) but I think that depends on what your filing status is. I'm not 100% sure though. I believe the IRS website has some information as well.
"The powerful have always created false images of the weak."
You may have to pay estimated taxes. Is this job you showed, your only source of income? And are you a dependent of someone else? If you don't make enough money to owe at least $1000 in taxes you do not have to file estimated taxes. From the IRS publication 505 ( http://www.irs.gov/publications/p505/index.html ) :
You must pay estimated tax for 2007 if both of the following apply.
I don't know if it clears things up or not. By the way, I love your signature quote.You expect to owe at least $1,000 in tax for 2007, after subtracting your withholding and credits.
You expect your withholding and credits to be less than the smaller of:
90% of the tax to be shown on your 2007 tax return, or
100% of the tax shown on your 2006 tax return. Your 2006 tax return must cover all 12 months.
Responsibility: A detachable burden easily shifted to the shoulders of God, Fate, Fortune, Luck or one's neighbor. In the days of astrology it was customary to unload it upon a star. ~Ambrose Bierce, The Devil's Dictionary, 1911
If you're not an independent contractor, your employer has to match your FICA deductions and should be withholding taxes.
If you are an indepdendent contractor, you have to pay double FICA to make up for what an employer didn't contribute.
Did you fill out a W2 when you got hired?
It's my opinion that the first thing you need to do is figure out your status with your employer and then find a knowledgable tax person.
Personally, I do not trust H&R Block. The first (and only) time I used them, thank goodness I double checked their work. I ended up having to take it back FOUR TIMES (each time showing them the errors, where things needed to be posted ~ yet they never posted where they should), the last time was on April 15th that year and had to demand to see a manager.
{edited for clarity I hope}
Atheist Books, purchases on Amazon support the Rational Response Squad server.