Frequently Asked Questions
If I'm self-employed, how do I create a W-2 for myself?
Why didn't my employer take any federal withholding taxes out of my paycheck?
Here are some possible reasons:
- You might be considered an independent contractor and won’t have taxes withheld for you. If this is the case:
- You probably received a Form 1099-MISC instead of a W-2 to report your wages. No Medicare or Social Security would have been withheld either.
- You’ll need to file a Schedule C to report the income and any expenses related to that income.
- You’ll also need to file a Schedule SE to report and pay your Medicare and Social Security tax.
- You might have claimed on your W-4 to be exempt from withholding. You must meet certain requirements to be exempt from withholding. You should check with your HR department to make sure you have the correct amount withheld.
- Your employer might have withheld taxes but gave you an incorrect W-2. If this is true, your employer must issue you a corrected W-2.
- Your employer might have just made a mistake. If your employer didn’t withhold the correct amount of federal tax, contact your employer to have the correct amount withheld for the future. When you file your return, you’ll owe the amounts your employer should have withheld during the year as unpaid taxes.
If my employer didn't withhold any taxes, what do I need to file?
- If you’re an independent contractor, your employer wouldn’t withhold taxes for you. Instead, you’ll file Schedule C and Schedule SE. Enter the amounts you received for work as an independent contractor. Independent contractors usually need to make estimated tax payments throughout the year.
- If you’re an employee, your employer should withhold federal taxes. This depends on the allowances you claimed on your W-4. They should also withhold Medicare and Social Security (FICA) taxes:
- If your employer didn’t withhold the correct amount of federal tax, contact your employer and correct it. When you file your return, you’ll owe the amounts your employer should have withheld during the year as unpaid taxes.
- If your employer didn’t withhold your FICA taxes correctly, ask that those amounts be withheld. Both you and your employer are responsible for the unpaid amounts.
- If you were an employee but your employer is treating you as an independent contractor, you can file these:
- Form SS-8: Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
- Form 8919: Uncollected Social Security and Medicare Tax on Wages
How should I file an extension for my partnership LLC?
If a business operates without paying taxes, what possible IRS penalties does it face?
- Late-filing penalty
- Late-payment penalty
These will apply until the business owner pays the unpaid balance. If the IRS determines that fraud is involved, a business owner will be subject to:
- Additional fines
- Possible criminal prosecution with jail time
Also, if a business has employees and doesn’t pay payroll taxes, it might be subject to the trust fund recovery payment. This is a 100% penalty that can be assessed against any person in the employer’s business who:
- Is responsible for collecting, accounting for, and paying withheld employment taxes
- Willfully fails to collect or pay these taxes
If I report Form 1099 self-employment income, how do I report my expenses?
- Your allowable business expenses
- 1099-MISC income related to your business
You might be required to file additional forms for certain expenses. Ex: Form 4562 for depreciation[/vc_column_text]
Can I claim an undocumented person as a dependent?
- Social Security number (SSN)
- Individual taxpayer identification number (ITIN)
An undocumented person won’t have either of these, so you can’t claim him or her.
To get an ITIN, complete Form W-7 and file it with the IRS. To get the form, visit www.irs.gov.[/vc_column_text]