Miscellaneous Income

[briank072]

State: Georgia

I began working for an individual as a sub-contractor in Feb. 2005. This employer has been in business for at least 3 years with an average of 3 to 5 employees (High turn-over rate). After I started working I found out that he did not have a business license, nor has he ever paid taxes. He told me not to worry about paying any tax on the money he paid me, because he never claimed any tax either. After several other shady jobs I performed for him, I quite in July 2005. However, since then he has sent me a Form 1099-Misc. stating that I owe taxes. Also, this employer still owes me a large amount of money, including repairs to his van that I paid for.
I have already filed my taxes for 2005. What should I do?
P.S. I have receipts showing every dime I spent while working for this employer, including the money he still owes me.
Thank you.
Brian

 

[pattytx]

First of all, as an independent contractor (I'm assuming for the sake of argument that you actually qualify as an IC), you are responsible for paying all your own taxes; the company is not responsible for any. If you were an employee, it would be different. Assuming you did not claim the income (which you should have done whether or not you received a 1099-MISC form), now you need to amend your 1040 and include the income.

If the company still owes you money, the terms of your IC agreement should specify what steps you need to take. As in, bringing a civil suit.