Tax questions!!!!

[jaksilee]

Ok a little backgound first....I started a new job 5 weeks ago in a new state. The week I started I was told that payday was every friday and I would not get paid till the following friday for that weeks work. So for that week and the next I pestered my new employer almost every day about payroll paper work and finnally was told on the day I was to be paid that untill I had gone thru the 30 day trial period (first I had heard of a trial period!) I would be paid by business check because it was a hassle to put someone on payroll with the payroll company. Now I have found out that no one here is on payroll so he didn't even have a company to work with so he has to set it all up just for me.

So now I have 5 weeks of pay that have had no taxes taken out of them and I need to know what will happen come tax time! How do I file these??? How do I make sure I don't get screwed because of this??? I also have 3 months of unemployment payments that I didn't take taxes out of so I could cover all my bills, how is that going to affect my taxes also? So All total I have 2 companies in Wisconsin I will get w-2's from (I had just switch jobs in january to a company that then went under) Unemployment payments from Wisconsin and this 5wks of pay sans tax deductions + any that he finally puts on payroll this year in Illionis.

So can anyone tell me how bad a jam I'm in here??? TIA

[jmjj215]

Re: Tax questions!!!!

Do you usually get a refund? How much?

[sweeps]

Re: Tax questions!!!!

Sounds suspicious to me that no one is on payroll. Are you a contractor? Then you're self-employed and will have to attach schedules C and SE on your taxes. You may also be responsible for estimated tax payments, but we can pursue that further if that's really the case.

If you're truly an employee and this isn't just a misunderstanding, you're being employed illegally. Your employer is responsible for paying half of your social security and medicare taxes, as well as other taxes on your behalf. Once we resolve these issues, the other questions can be addressed.

In the meantime, don't spend all your money. You're probably going to be giving some of it back.

[meaghanchan]

Re: Tax questions!!!!

Be sure to save at least 25% of the money that you've gotten so far from this company. Put it in a seperate savings account and don't touch it. In the case that you are being treated as an independent contractor (ie you're never going on payroll; you're getting a 1099 instead of a W-2) you'll need to pay all your regular taxes on it, plus a 15.3% self-employment tax. This'll all be due in April, so you have time to save up a bit if you've been spending your entire paycheck.

If you are going to stay with this company in this situation (there are industries where this is the norm; I don't know what industry you're in, and you have to weigh the pros of this job vs. the cons of not being an employee- the self-employment tax (which consists of your employers' portion of medicare and social security), as well as the fact that you wouldn't be able to go on unemployment if this job ended (you're not paying into it)) then you have to start filing estimated taxes quarterly. There are forms on the IRS website to estimate what you're making for the year, what taxes you owe on that, and then you have to pay 1/4 of that quarterly- April 15, June 15, September 15, and January 15.

It gets complicated- a good accountant can be worth what they cost you and more- and, like I said, you have to consider the pros and cons of this job.

[jaksilee]

Re: Tax questions!!!!

Ok lets see if I can answer all of these....
1. I normaly get a refund of 600-900 from federal. 300-500 from state.
2. No no one is on payroll.... I think some of them are contractors, but I am not. I also think some of them are illigals.
3. I work at a very small (less than 15 employies) custom cabinetry and furniture shop as a designer.