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W9 - who pays the taxes

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I am located in Oregon. I was paid with a W9 for my services. But now I have to pay the taxes on the money paid. I gave a budget and was paid the amount, but did not factor in the taxes, which ended up being so much that I am not making enough money to cover the costs I incurred. I have asked for the taxes to be paid, in good faith, but they are refusing to pay me. Can I take them to small claims court to get this money back? Please advise! Thank you so much.
 


adjusterjack

Senior Member
A W-9 has nothing to do with how you pay your taxes or how much you pay.

If you are in business for yourself as a videographer, performing services for clients, and charging a fee you should have known a long time ago how your income taxes work.

You set a fee for your services. You were paid. Your client doesn't owe you any more money. Certainly not because you planned poorly for your taxes.
 

Taxing Matters

Overtaxed Member
Can I take them to small claims court to get this money back? Please advise! Thank you so much.
You'd lose in that lawsuit. The Form W-9 is a request for your identifying information, including your taxpayer identification number (TIN) so that the person hiring you can file the information returns with the IRS that the law requires, principally the Form 1099-MISC. The fact that the client gave you a Form W-9 instead of a W-4 to complete indicates the employer treated you as an independent contractor. If you were truly an independent contractor then the client had no responsibility to withhold any tax from the payments the client gave you. Instead, you were responsible for making the necessary estimated tax payments during the year and for paying all the tax owed when filing your return. Your client has no responsibility for any of that unless your contract with the client said otherwise, and it would be very unusual for client to obligate itself to pay for that on top of the agreed upon fee for your work.

Even if you were an employee, you are still responsible for all the income tax and for half of the FICA taxes (Social Security and Medicare taxes).

Either way, it's on you to understand your tax obligations when going into any job or investment. You don't want to wait until it's time to file the return to realize what you were supposed to do.
 

Eekamouse

Senior Member
I am located in Oregon. I was paid with a W9 for my services. But now I have to pay the taxes on the money paid. I gave a budget and was paid the amount, but did not factor in the taxes, which ended up being so much that I am not making enough money to cover the costs I incurred. I have asked for the taxes to be paid, in good faith, but they are refusing to pay me. Can I take them to small claims court to get this money back? Please advise! Thank you so much.
Why should they pay your taxes for you? That's your responsibility, not theirs.
 
Thank you all for the clarification. I was told that I could not write off expenses for this. I will look into this further to figure it out.

Thank you again!
 

FlyingRon

Senior Member
An "employee" can't take miscellaneous job expenses anymore (used to be able to itemize some of them), but a contractor still takes the expenses off the gross receipts before that enters into the tax computation.
 
I was told that, with the new trump laws, due to my tax bracket, I could not deduct more than 12k for my private business. Maybe I talked to the wrong person. This is why the tax situation was a little shocking to me. I thought I would be able to write off more.
 

FlyingRon

Senior Member
Again, you were told wrong.

If you were an employee, you can't deduct ANY miscellaneous deductions on your Itemized Deductions (Schedule A) which now has a higher $12,000 standard deduction.

If you are a contractor or other business reporting income on a schedule C, you are allowed to take as many deductions as you want. You can even operate at a loss.
 

Taxing Matters

Overtaxed Member
If you are a contractor or other business reporting income on a schedule C, you are allowed to take as many deductions as you want. You can even operate at a loss.
Well, not as many deductions as you want. A lot of people would like that, but of course the tax law doesn't allow that. ;)

But pretty much all of the expenses incurred in running the business may be deducted in full in year the expense was incurred or depreciated/amortized over a period of years depending on what the expense was.
 
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