tax exemption--self employed

[mr...]

What is the name of your state? Montana

ive worked for a guy who has paid me cash and therefore has not taken any payment for taxes out. i was told that i must mow pay self employment tax....my question is that since i have not been paid in full for my work done for this guy (going through civil court to get the rest of it) i have not filed for self employment tax yet (which the deadline i think for it was a few weeks ago)....since i will be going to civil court soon i think that this taxes thing might come up (i might be wrong)... will i be getting in trouble for not paying self employment taxes ( i did/do pay taxes on my other income) on time or does my situation fall under a "good reason for not paying the tax on time"

 

[pojo2]

Why do I suspect that at the time the CASH was being paid you had no problems that no taxes were being withheld?

Anyway do you qualify as a SE individual? Could be the tax problem is HIS and not yours if he has not properly withheld taxes.

Dumb question I know but did you report any of that CASH money on your tax return period?

 

[JETX]

ive worked for a guy who has paid me cash and therefore has not taken any payment for taxes out. i was told that i must mow pay self employment tax....my question is that since i have not been paid in full for my work done for this guy (going through civil court to get the rest of it) i have not filed for self employment tax yet (which the deadline i think for it was a few weeks ago)....since i will be going to civil court soon i think that this taxes thing might come up (i might be wrong)... will i be getting in trouble for not paying self employment taxes ( i did/do pay taxes on my other income) on time or does my situation fall under a "good reason for not paying the tax on time"

And now for a legally ACCURATE response....
Yes, you are going to be 'in trouble'.

As a 'self employed' person, you are REQUIRED to file your estimated taxes quarterly. It is clear from your post that you have not done so. The 'trouble' you will be in will more than likely be that you will have to pay a penalty at the end of the year for failing to pay 'as you go along'. Also, a 'normal employee' pays 7.65% of his wages, with the employer matching that amount (to the total 15.3% required by law). This comes to 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance). As a self employed person, you will now be responsible for the FULL 15.3%..... which will be another 'penalty' you will be obligated for.
For more on both of these (quarterly filing and 'self employment tax'), go to: http://www.irs.gov/pub/irs-pdf/p533.pdf

 

[mr...]

i never thought of that....
If he did not file taxes from my income then does that make me self employed???? so can i just report my earnings form him at end of the year (non-self employed) taxes??

 

[JETX]

If he did not file taxes from my income then does that make me self employed????

Self employed isn't the issue. The issue is that your taxes are not being withheld.... and you have to pay them.

so can i just report my earnings form him at end of the year (non-self employed) taxes??

You have to report your income and pay ALL the taxes due on them. The principal of 'payroll deductions' is that your employer properly deducts your taxes as you are paid, then send the funds to the government. At the end of the year, you calculate your tax liability... and if it exceeds the total of your deductions, you get a refund. If it doesn't, you have to make up the shortfall. In your case, there are no deductions or 'payments' made on your behalf... so you will get hit with the full annual tax liability. Bottom line... better start saving ALL your income now... to pay your taxes next year.

 

[mr...]

so as long as i pay my lump some taxes on my income at the end of the year i will be legally ok, (aka. when i am in small claims in a few weeks they wont fine me etc. for not paying taxes up front) ?
.....sorry for my ignorance and thanks for your help

 

[pojo2]

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Why can one not simply delete their own posts?