Free Tax Tips

Posts Tagged ‘taxes’

Question: Would you switch from a W-2 job to become a 1099 contractor?

I’m thinking about switching from being paid 70-72k/year + benefits at a w-2 job in one setting to a 1099 contractor job at about $65/hr. How much of a pay increase is that? I’m in Minnesota, if that matters. I can switch to my wife’s insurance at minimal cost too so I’m not too worried about benefits.

Answer: If it’s the same job, you and they can’t just switch. A given job is one or the other, an employee or a contractor, and that’s defined by the terms of the job.

What the new job would pay you depends on how many hours you work. You’ll pay almost twice as high a % for social security and medicare as a 1099 contractor. And then there’s the value of the benefits you lose…. not just insurance, but paid vacation, sick days, eligiblity for unemployment comp if you are laid off or workers comp if you get hurt on the job, and any other benefits you might have as an employee.

Only you can evaluate what the loss of benefits is worth to you.

You say … Letter to the editor

The time is now. The tax revolution starts with our receipt of W-2 or 1099 forms. I refuse to pay any taxes on what my company spends on my health insurance. I worked my tail off for years to get security in retirement.

10 Reasons to Switch from W2 to 1099 Free Agent Entrepreneur by Mike Farrell with aspenIbiz

Question: We did a subcontracting job for a company, and now that we are finished, they want us to fill out an I-9?

They never mentioned anything about it before the work was completed, and now that money is due, they say that it has to be filled out, and it takes three days to go through, before we can be paid, ofcourse. Ive read the form, and it has that it has to be done within three days of beginning work. Are they allowed to ask for it now, when the work is completed? Some of my guys only have tax ids’ and wont be able to fill out the forms. Basically, in the years we have been doing this, not one company required it, because when i go to file taxes, they claim as their own subs, using 1099s’ so therefore, they are not my employees. Help please! No rude comments.

Answer: Tell the company that it was your understanding that you were working as contractors (selfemployed) I-9 is for employees, if the company files this, they will have to pay employers share of SS and Medicare (6.53%) in addition to what they pay you. The correct form for you to fill out and give them is W-9, they can use that to report your job to the IRS. I think the company just made a mistake here.

October 15 IRS Tax Extension Deadline Looming TaxMasters Prepares Small Business Owners With 6-Week Tax Plan

Understanding many sole proprietors are under the gun to follow up on the extensions they filed this past April 15, TaxMasters, Inc. , the IRS tax relief company and a leading provider of tax representation services, is sharing the ultimate 6-week plan designed to walk small businesses through the steps they need to meet the IRS’ October 15 deadline.

How to Organize Your Tax Papers

Question: Who do I issue 1099 Misc to?

Hi, I apologize if this question was taken up at some time. I am new in the 1099 Misc issuance field. Just need your advise if 1099 Misc are required for: Blue Cross insurance payments, AFLAC insurance payments, property and liability insurance payments (including broker payments), payments for life insurance, payments to payroll services provider, payments to waste collector, payments to locksmith, payments for car repairs, mortgage payments, and payments to utility companies (DWP) and Phone (landline and cellphone) companies.

Again, I apologize. I have read through the IRS instructions but am still confuse. I would not like to make a mistake.

Thanks.

Answer: You really are confused.

You do not issue one to ANY of those people.

1099 is for independ contractors who you hire to work for you, not companies that you pay for services with.

Question: My Schedule K-1 (Form 1065) is for an Oil Drilling Partnership in the Gulf of Mexico.?

I have $3,364 in Box 1 Ordinary business income (loss). A note that came with the K-1 states the following:
State Information-The partnership’s ordinary business income (loss) reported in Box 1 is derived from offshore federal leases located in the Gulf of Mexico, thus, the oil and gas business income (loss) is taxable only to the partner’s resident state.
My questions are: Does this mean that I don’t have to claim this income on my Federal Income Tax Return? How would I accomplish the removing of this income from my Tax Return?

Thanks for any help!!!!

Answer: Yes you still have to report on federal. Since it is offshore it can be a gray area for the states; that’s what the explanation is about.

New Alerian MLP ETF: High Yield, Beats the Market

Dan Pritch submits: Yesterday hailed the launch of the first MLP ETF ( Master Limited Partnerships ) which have been crushing the S&P500 this year from a capital appreciation and yield standpoint. For the uninitiated, MLPs are publicly traded companies that are structured as partnerships such that they must distribute the majority of their profits, but in turn, they are shielded from certain tax …

Stock Market Tutorial #6 Stock Screening

Question: Will A Mortgage Company Refinance Me For Tax Lien?

I was hospitalized 4 years ago and had to have a major surgery with a much longer recovery than I ever anticipated. I live alone, I dropped many of my responsibilities, it all fell by the wayside and actually it is only the last year I’m beginning to catch up. I didn’t file that year and I received an IRS letter recently with calculated penalties and interest of a little over $30k. On top of that I have outstanding uncollected hospital bills of about $30k. I have a home I inherited free and clear that is valued around 120k. My question is: Can I find a mortgage company that will deal with me though I have terrible credit and never had a mortgage? What kind of loan amount would be available? And what would likely be the interest range/terms for someone like me? Thing is, I don’t want to lose my house right when I’m just beginning to pull my life back together. thanks in advance for your thoughts.

Answer: The tax lien is your worst enemy right now. Now that you own this home they could seize it and auction it to pay your back taxes. You need to contact the IRS and setup a plan to repay this debt and stick to it before they take your home. They can and do seize property (just ask willie nelson) and it is only a matter of time before they find out about this property. I doubt any lenders will touch this until the lien is gone. If they were to loan you money they would be at risk of loosing their collateral to the IRS. If your home goes to auction your chances of getting the homes value would be greatly reduced, especially in this market.

You can reset Social Security

Q: I started collecting Social Security benefits when I turned 62. I wasn’t working at the time and needed the income. I am now 64 and working again. I don’t need the Social Security income right now and wish I had never signed up. Is there anything I can do? A: Yes. But don’t wait.

April Showers and Penalties and Interest Will Apply Video