You can do milage deduction or real expense deduction. Which ever is greater. So if your car broke down alot and you have to have it repaired, use real expense.
Sorry, but you can't do that unless the car is used solely for business purposes. And it doesn't sound like the OP's car qualifies.
First off, get out of this job NOW. Don't wait. As it sounds like you're doing secretarial work, you probably are not making much. If you are being classified as a 1099, you're making a whole lot less than what you think you are. Secondly, read the webpages provided to you in other post to the IRS site. File a SS-8 Third, no taxes being taken out of your paycheck should have been a BIG clue. Finally, its time for you to start learning about the real world. Handing mommy your W2 and expecting a tax refund is only going to lead to bigger disasters later in life. Time to get off the teet!
All you guys saying "talk to a lawyer" realize that he doesn't have any money to hire a lawyer, right? And it would cost more in attorney's fees than he could possibly make up in tax reduction, according to his own figures. Bottom line, looks like you'll have to set up a payment schedule with the IRS and make payments of some kind. They're actually very reasonable in terms of working out payment arrangements.
Whatever you do, don't go to H&R Block. They're a bunch of bums who don't know what they're talking about. Use another tax service if you must, but avoid H&R Block at all costs!
that's a little extreme. you do realize that the different branches around the city and nation don't all have the exact same 20 people working at them, right?
Well ok. It seems the majority of you recommend that I get some professional help. Can someone recommend a specific person/company that is reliable and know what they're doing and can help me out with this? I am not looking to avoid paying taxes, it's just that I feel I have been unfairly handled by my employer and I need him to man up and pay whatever his share of this $6,400+ bill. I am almost certain that I will have to walk away from this job by the end of this week. Seeing how next week is the spring break, it will give me ample time to look for new work. Nonetheless, can someone provide me with some key negotiation tactics(don't you dare swoly-d) so I can have my boss pay a share of this debt? Because from our conversation on Friday, I think he was to trick me with a whole bunch of numbers. For example, he said if he were to deduct taxes from my paycheck, it would total out to be more than what I have to pay now. Which for certain I do not believe to be true. I will not succumb to paying all of the $6,400 on my own, even with deductions for my vehicle, which some of you doesn't even think it applies, it's still a very hefty load for me to bare. I know it seems like I've been living under a rock regarding taxes, and I guess I have, but I'm determined to to get this sorted out efficiently so I can part ways from this company for good.
Thanks. You've been very helpful thus far. You are correct, I am not financially healthy enough to hire legal help. I have attempted to discuss the situation with my employer last Friday, all he did was talk about how advertising on google costs him an arm and a leg, then proceeded to discuss about raising my commission bonus. Then an hour later he came to me to discuss the tax issues, not much from the conversation stuck in my mind except the 15% deduction for medicare that he mentioned, I just couldn't fathom that 15% will be deducted for medicare... and to my surprise, only 1.45% was for medicare. I do not want to continue any conversations with him regarding these taxes unless it is to collect his share of this $6400+ bill.
Question here: some of you guys are saying that you can only deduct mileage if the car is used "solely" for business purposes. With exception of extremely rare circumstances, who the heck has two cars with one for personal driving and the other for work? I am pretty sure most sane people who are self employed drive the same car on both occasions, and deduct the mileage used for work. So if you are self-employed and have experience with the 1099-MISC, how do you go about deducting your mileage? Also, how do you go about keeping "records" of mileage driven for work? Do you deduct other car expenses such as oil changes or routine maintenance as well? This part is probably the most confusing to me. Thanks for all the advice guys, it is very helpful and much appreciated.
To clarify - you can deduct any mileage used for work if you're a 1099/self-employed type. But if the car is ONLY used for work, you can deduct maintenance, repairs, even the car itself (as an asset purchase), etc - all the other random costs of the car. You may be able to deduct some maintenance/etc if you split it for work/personal use (not sure exactly how it works), but you have to be able to justify how much is work use, etc. It's one of the deductions that leads to red flags for auditors since it's an easy way people use to cheat the system.
gotta save a % of your money if you are not getting taxed throughout the year... then pay out Uncle Sam come Tax Time... it's pretty clear how it works. you should have saved
I did save, but I didn't think I'd have to pay over $6,400 It's not that I don't have the money(well yes, in a sense I don't have $6,400) for Uncle Sam, it's that I am employed as a full time employee, by paying me as a contractor my employer is saving himself the expenses of SS and Medicare taxes, and who know what else... I wouldn't mind paying my slice of the American pie, if my boss would pay his. I need to figure out just how much taxes he would have paid through-out the 2008 year if I were to receive a W-2 instead of 1099. Then I'll have some concrete information to bring to him and justify my need for him to reimburse a portion of the total. If there's anyway I can calculate the total without going to a professional, then I wouldn't mind crunching some numbers to get a clearer
I see your point, Ego, you should check with employer. but $6400 is about 28 % of $23,000. that seems about average, 20-30 % of income is taxed. it seems like a huge chunk but that is what you would have paid out over the year if you were being taxed. the same thing happened to me on $9000 untaxed income one year. lo and behold I had to pay out about $2000, roughly 22% of the 9G
Have you called the IRS and talked to them about their payment plans yet? I don't think you should be worrying so much, because the bottom line is you're going to have to pay it back yourself most likely. Ask you boss to pay some of it, if he doesn't oh well. It sounds like he told you about it when he hired you but you didn't understand. I would also let the IRS know what your boss is doing, so they can investigate him. Also if you call the IRS they can probably tell you how much to withhold from you paychecks to pay your taxes since your employeer doesn't. I sold some property in... 2007, and I called the IRS and they told me how much I would have to pay on it in taxes and everything. They have departments to help you, so just call them.
But this is huge though. 6400 of 23000 is roughly 28%, whereas if he filed taxes for me, it would only be 20% plus I get a refund check. I have no problem paying my share of the 20%, I need him to be accountable for the remainder. A little while ago, he suggested I should put down all the expenses that I could think of on the "Profit or Loss From Farming" which is to be attached to the 1040 Form. I asked wouldn't I need recipes to justify these expenses, he says "no, they usually doesn't check, they only check doctors etc, the ones who file a large load of paperwork"... He's suggesting I could commit tax fraud? How do I figure out how much and what he saved by paying me as an Nonemployee?
He saved the 6.2% SS and 1.45% Medicare on taxes. So if you were paid $22,777, the employer saved $1742.44 in taxes - if they paid you the same amount they would have had you been a regular employee (sometimes people get paid more as an independent contractor because of those savings). You mentioned in another post that you were getting paid commissions. How much of your pay is commission-based? Are you getting paid by the hour as well?
