Taxation for Florida

[Lawfro]

I worked as an independent contractor for 3 months and during a good bulk of that time I was having two checks written to me under one name (which could be easily varified since there is clearly a point where I made and x amount steadily and then more than double that amount steadily only to then have the previously steady check amounts proceeding). This was done because my father, who I was living with and whom had given me the job, didn't have identification at the times nor the means to secure one. I had even asked both him and his boss if I would be taxed for the amount and each had said "do not worry about it". (This is between February and April of 2013). Anyways, I figured this was all fine and dandy and seeing as how I made less than $9k (which is untaxable) I figured it would have been a waste of time to file a 1099 (as impetuous as that may sound to a tax expert) but regardless I was told time and time again to "not worry about it". Well, lo and behold, December of 2015 I receive a statement from the IRS that I owe over $4k and it said that I had received MORE THAN $13.000! I know for a fact (and making only $80 a day I would have had to have worked over 162 days to incurr such an amount and had only worked there for not even 3 months, minus weekends). So therein lies my inquires: if my dad will readily explain to the IRS that two checks were written as one to me, will they understand this (with proof given of course, albeit checks were written only under my name)? If so, is my dad's boss in trouble for doing so? Thank you for taking the time to read this and for any input you can provide for this.

 

[justalayman]

Your father can't explain anything. If the money was paid to you, as far as the IRS is concerned it's yours.


You should have been provided a 1099Misc from the employing company in early 2014. There would have been no surprise of what was reported to the IRS since they get the same info as you do on the 1099.

Did you get one? Both incomes would have been totaled on the one 1099misc. 2 checks to one person simply means they got 2 checks.

the only person in trouble here is you. You need to pay taxes on the entire amount paid to you as reported on the 1099

 

[tranquility]

I'm not entirely sure of the situation. But, your income is your income. The 1099 rules are irrelevant to what you need to report.

How much did you make from your work? Did you report it?

 

[OHRoadwarrior]

Somehow, I think this delves farther into permitting an unauthorized person to work in the US and can morph into multiple Federal Crimes for use of and allowing use of your SS number. I suggest you consult a lawyer and a tax specialist.

 

[Lawfro]

Thank you for the replies. To clarify, my dad is a legal citizen, he just couldn't get the documents (ie birth certificate and social security card) to retain a license. I will talk to a tax lawyer regarding this and hopefully I can get this cleared up.

 

[Lawfro]

Also, to clarify the amount income, I made within the range of what is considered "untaxable income" because it was between $8,000-$9,000 and only had checks written to me for the amount of $13k because of the time frame that my dad was having his checks and mine written as one.

 

[justalayman]

There isn't anything you can do here short of paying the taxes owed on the entire $13,000 without causing additional problems for you and/or your father. I suggest simply filing the proper forms and laying the tax, interest, and penalties owed. Dad should be chipping in on the deal since some of the earnings were his but that's between you and your father.

 

[OHRoadwarrior]

As an independent contractor, you are required to pay both the business and private portions of taxes. Your statement you are not required to file is incorrect as you are not a person for tax purposes, but a business.

 

[LdiJ]

Also, to clarify the amount income, I made within the range of what is considered "untaxable income" because it was between $8,000-$9,000 and only had checks written to me for the amount of $13k because of the time frame that my dad was having his checks and mine written as one.

You are forgetting self employment tax. That will be owed on your 8-9k even if regular income tax is not.

I would simply issue your father a 1099 for his share of the income, and deduct it on your schedule C. You were an independent contractor and apparently the company treated your father as your subcontractor rather than another independent contractor of theirs. Its not that big of a deal to handle.

 

[justalayman]

You are forgetting self employment tax. That will be owed on your 8-9k even if regular income tax is not.

I would simply issue your father a 1099 for his share of the income, and deduct it on your schedule C. You were an independent contractor and apparently the company treated your father as your subcontractor rather than another independent contractor of theirs. Its not that big of a deal to handle.

an individual issuing a 1099?

and for money paid a couple years ago?

No problems with either of those?

those are real questions, not questioning your answer itself.

 

[LdiJ]

an individual issuing a 1099?

A Schedule C filer can absolutely issue 1099s. Its quite common and customary. Its not at all unusual for a contractor to have subcontractors. There are even situations where individual filers can issue certain types of 1099s in non business situations. However that is too complex to go into here.

and for money paid a couple years ago?

That part, I definitely missed although it could still be done...I would not recommend it with the level of income involved because of all of the other questions/potential penalties it could raise, but it could still be done.

I suspect that if the OP is having problems with the IRS now, its not so much because of the extra income, but because the OP did not understand that he needed to file a tax return and pay self employment tax. He clearly did not get that part.

 

[justalayman]

LdiJ;3388313]A Schedule C filer can absolutely issue 1099s. Its quite common and customary. Its not at all unusual for a contractor to have subcontractors. There are even situations where individual filers can issue certain types of 1099s in non business situations. However that is too complex to go into here.

this is where it gets odd for me. Obviously an independent contractor is considered to be self employed hence, he is a "business" but does that qualify him as a sole proprietorship for the purposes of the IRS?

That part, I definitely missed although it could still be done...I would not recommend it with the level of income involved because of all of the other questions/potential penalties it could raise, but it could still be done.

ok

I suspect that if the OP is having problems with the IRS now, its not so much because of the extra income, but because the OP did not understand that he needed to file a tax return and pay self employment tax. He clearly did not get that part.

sounds plausible.

thnks

 

[davew128]

this is where it gets odd for me. Obviously an independent contractor is considered to be self employed hence, he is a "business" but does that qualify him as a sole proprietorship for the purposes of the IRS?

By definition, any unincorporated business with one owner is a sole proprietorship.