tax question

Magnethead

Magnethead

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Was hoping maybe somebody could help/have an answer before paying an atty.

This tax year it looks like I'm going to have about 9K worth of income from universities and 2-3K of private income (cash/check/paypal). Both universities have me as a W-9 subcontractor.

At what point do I have to start dealing with the IRS and have to form an LLC or otherwise?
 
You mean a 1099 don't you? As a 1099 subcontractor you're responsible for all your tax liabilities. Companies don't withhold taxes on a 1099 sub contractor. So not only fed income tax you now have 12% SS and self-employment taxes to deal with, along with any state income liabilities.

btw, if you didn't "guessamate" and pay the feds quarterly you may get a penalty.

You want a good CPA/Accountant. not a tax atty.
 
OK so I asked my boss, and he said here I'm listed as a subcontractor to the department, but I'm still listed as a direct employe to the university, so I should get a W2. .

I tried William Peace and they didn't answer, so I shot them an email. I filled out a W-9 for employment there. Also not sure if that's going to impose north carolina and texas taxes on me, or just texas, or just north carolina.

Everything else I do is cash/check/paypal.

We have a CPA do our taxes for us.

I'm just not sure at what point I need to file for an LLC or start dealing with the quarterlies. I do have taxes witheld on my check here at UTA, and I figure with that and everything else, I'm going to stockpile another $200 for uncle sam.

edit: So I called one of my friends that used to have an LLC and recently upgraded to a corporation, and he said as long as I make less than $9,000 off my own sole proprietorship AND/OR don't produce anything that could injure/damage/ect the general public, then I don't have to deal with any external filings. However, I do have to file a "Doing Business As" certificate with the local Chamber of Commerce to legally use my trade name (Magnethead494 Website & Computer Services) on business cards, invoices, and such material that may or may not have my personal name on them. Obviously this is all his word and the CPA will know the official ruling, but it gives me a head start/direction I suppose.

edit #2: William Peace emailed back. They said because I made under $600 from them this year, I will be neither 1099 or W2. I've asked for clarification.

edit #3: They emailed back. Said that theoretically, their paycheck is just like a regular check, no strings attached. The W-9 was just standard procedure.
 
Get a CPA --- it's soooo much easier to give him/her the numbers and let them plug them into the form.

We started using a CPA when hubby had a business. We keep using him because I just don't want to mess with it anymore.
 
SST55 said:
You mean a 1099 don't you? As a 1099 subcontractor you're responsible for all your tax liabilities. Companies don't withhold taxes on a 1099 sub contractor. So not only fed income tax you now have 12% SS and self-employment taxes to deal with, along with any state income liabilities.

btw, if you didn't "guessamate" and pay the feds quarterly you may get a penalty.

You want a good CPA/Accountant. not a tax atty.
Click to expand...

SST55 is right. You'll probably end up getting around 25% of that $10,000 chopped off the top if you haven't payed employee and employer share of SS.
 
TexasRaceLady said:
Get a CPA --- it's soooo much easier to give him/her the numbers and let them plug them into the form.

We started using a CPA when hubby had a business. We keep using him because I just don't want to mess with it anymore.
Click to expand...
we use a CPA now, but I'm trying to get everything inline so whatever needs doing (like the DBA certificate) I can get done now.
 
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