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1099

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steevano

Guest
What is the name of your state?washington
i worked suposedly under the table for a resort/marina for the past nine months. now 2-weeks from the filing deadline i was given a 1099 saying i was paid $14528.27 in 2002. all else aside, i was an hourly employee, and was also given free lodging the entire time. am i liable for the taxes? being by definition an "emplyee" arent they responsible for deducting taxes from my pay.
 


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nowpastdue

Guest
I am NOT an attorney.

I guess you mean you thought you were to be "paid under the table" meaning no deductions for federal or state taxes, no social security, etc. Were you paid in cash or do you have some form of paperwork showing the hours you worked , etc? If you do not have any paperwork how can you substantiate your claim "I was an hourly employee".

Apparently the resort/marina, you, and the IRS have differing opinions as to what constitutes an "employee". Want to guess who will prevail?

Did you believe that you were an independant contractor? Do you have any special skills, licenses, etc that you can show.

I think what happened here is that the resort/marina wants to treat you as an independant contractor so it can save money on it's portion of social security, workmens comp premiums, etc. You for whatever reason went along with it.

Without knowing the exact details of the work requirements I can't speak to the question of the "free lodging" but I hope you realize that there is probably a 95% chance that the value of the "free lodging" is taxable to you also as remuneration for your labor.

If you are found to be an employee of the resort/marina you are responsible for the taxes. Since you state no withholding was done you get no credit and will be assessed the your portion of social security taxes also.

If you are found to be an independant contractor you are responsible for the taxes and all of the social security taxes.

It is my guess that from the briefest of details you provided that you were an employee.

In effect the resort/marina is saying that you were an independant contractor by providing you a 1099.
Working for cash under the table always sounds good but it invaribly comes back to bite you.

Check out the IRS site and see what exactly you status- you have to meet a rather stringent test to be not an employee. Either way you have to pay taxes, just one way is more that the other.

Good luck.
 

abezon

Senior Member
You can report the income on a tip form (forty-something) by crossing out TIPS and writing in WAGES. Then file a request that the IRS determine if you were an employee or contractor. I believe it's form SS-8. The lodging was furnished for the convenience of the employer, so it's a non-taxable fringe benefit.
 
N

nowpastdue

Guest
I am NOT an attorney>

#1 The 1099 info has already been transmitted to the IRS by the employer.
#2 I see no mention of "tips" anywhere in the author's posting.
#3 I would be helpful if thread author related exactly what he did for the resort/marina.
#4 Submitting your own form I feel will only raise flags, if that is your wish you may certainly do so.
#5 Author's main concern was whether or not he owed taxes. I answered yes.
He owes tax on all reportable income that he earned.
#6 Yes, the form to let the IRS determine the relationship of parties is Form SS-8. The problem is that taxpayer must first file a tax return and pay taxes, whatever that might be, before the IRS will make a determination. You might want to visist the IRS forms and pubs site and copy off the form answer the questions and for yourself (thread author) see which side you think the determination will be made.
#7 In my original response I believe I stated that I felt you had a 95% chance of being responsible for the income tax due on "free lodging". I see no mention of the fact that the lodging was furnished for the convenience of the employer, in which case it would be a non taxable benefit and non reportable. Take a look at Pub 525. The test to determine if lodging (and meals which is another point (?) as to a. and b.) is taxable or not is a. Were meals and/or lodging furnished on the premises of the employer? b. Were meals and/or lodging furnished for the convenience of the employer? and c. Was accepting the lodging a condition of employment?

So, if you can answer honestly "Yes" to all three, the value of lodging (and or meals) is probably not taxable. Since you were working under the table I don't imagine you have a written work agreement which would spell out particulars on these two points. If you were on 24 hour call it goes to author's advantage. If you could take lodging at someplace other than the resort/marina then you have reportable income.

#8 So back to author's original question. Yes, you owe taxes on at least the amount reported in your original post (plus I expect for the lodging).
 

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