Sorry, it`s another one of those "contractor or employee" threads :(

[toomie]

So I was hired almost a year and a half ago to be a bather 2 days a week at a boarding kennel/grooming facility. Only 2 months after I started, the groomer was injured while on vacation and I suddenly became the only groomer. I groomed for 3 months, then the regular groomer came back for 3 months, during which time I went back to being a bather, then she left for 2 more months to have surgery and ended up not coming back at all, so I was once again the main groomer.
I had always thought I was an employee; I never was told anything otherwise, I never signed anything to the contrary, was issued a paycheck every 2 weeks with some taxes taken out, etc. I did come to realize my employer was not taking enough federal taxes out of my check, and when asked about it he insisted that the system he uses to calculate checks was correct. I have just recently realized he is also NOT paying unemployment on me or the other groomer he hired 6 months ago, and he is also not taking enough state taxes out of our checks either. A co-worker just filed her taxes, and she made less than I did last year and owes the state over $500.00, and also owes the federal gov.`t at least that much.
Long story short, I am gonna owe a LOT of money at tax time. So I am wondering how any of you would or have handled a situation like this? I`m thinking that if I`m going to get stuck paying most of my own taxes, I should be getting more money.
Opinions?

[Helly]

Talk to a tax attorney, even if you have to pay for it, although many attorneys will give you a free consultation. When it comes to tax laws, it pays to get the advice of an expert.

[Admin]

Imagine you are a plumber. You go to a job, do the work, present a bill, get paid, and the entity paying the plumber doesn't withhold anything. The plumber was contracted to fix the plumbing, and the plumber pays taxes himself/herself.

Employers withhold from employees. Business owners don't withhold from IC's.

You cannot expect any withholding if you are an IC. You do all of that and you are self employed. It may be wrong, almost certainly is, for your client (the owner) not to recognize he/she is an employer. Both of you are at fault. You need professional advice to sort this out and protect yourself.

Truly the IRS expects a written contract where there is a real IC relationship and you even create invoices billing the entity paying you, and you file and operate like any other self employed person/company.

So it sounds like your situation is somewhere in between and you can put documents on file with an employer which require them to take the right amount of deductions out, unless they balk as some do, and suddenly declare you IC.

It's a darn shame, but you can sort it out and get legal ASAP. Ask for a free consult with an attorney specializing in Employment Law. Most do offer a free consult, a short time, and then explain the situation and what they can do to help and what the cost is.

The law states that an employer must keep a current W-4 on file.

Best wishes for your journey and peace of mind.

[VIPgroomer]

W-4

You need to submit a W-4 form to your employer with the correct number of exemptions so the proper amount of taxes are withheld. Either download the form yourself at www.irs.gov or ask you employer to give a new one to you.

Ask your employer what program they are using to figure out the taxes and post it here. I am curious to know.

[toomie]

You need to submit a W-4 form to your employer with the correct number of exemptions so the proper amount of taxes are withheld. Either download the form yourself at www.irs.gov or ask you employer to give a new one to you.

Ask your employer what program they are using to figure out the taxes and post it here. I am curious to know.

He uses Quickbooks. I do have a W-4 on file and I actually re-filed it to ask that an extra $25.00 be taken out of my check when I found out that very little was being withheld. Right now ONLY that $25.00 is coming out, and this is even when I have a fairly nice sized take home pay.
My co-worker`s accountant says he must not be downloading the updates to his system.

Stephen: The more exemptions you claim the less taken. If you file Single 0 the amount withheld increases substantially. You indicate that on the W 4 of course. Perhaps he doesn't know how to code the exemptions and put you at single or married with 9 exemptions etc which withholds very little, but did program the extra $25. Even the original version of the program would deduct something, but yes, employers need to pay an annual fee to Quickbooks for updates to correct rates. It's not cheap, around $200 a year. My first GUESS is a coding problem.

[VIPgroomer]

Toomie, I feel for you. My first advice is to find another job!!! Or, talk to other employees to see if they are having the same problem (if there are other employees.) Resubmit your W4 to your employer.

Running payroll in Quickbooks costs money. My guess is that your employer has no idea what he/she is doing and that is not acceptable. There is no way you should owe money at tax time if you make an average bather's pay and claim a 0 or 1 on your exemptions.

This is why, as a business owner, I hire an outside company to do my payroll. Yes it costs money, but it saves me so much time and I am sure my payroll and taxes are correct.