Employee vs independent contractor

[Hncourt]

Jurisdiction

California

I was hired as an employee but last year the owner of my business made a switch and put all new hires on 1099. I told her I did not want this change for myself and she agreed to keep me as employee. Little did I know, as I was paid with personal checks from her on which she wrote a tax amount (turned out to only be ssi and medical), that for one year she was not withholding federal taxes, as if I am an independent contractor, but I never signed an agreement to that. Now I owe a very large sum of money to the government because I was being lied to. Is there anything I can do?

 

[txls]

Contact the department of labor.

 

[mightymoose]

Honestly, you carry some of the blame here. You accepted personal checks and likely did not have a check stub or any account of your hours worked and deductions. You have some responsibility for going so long and not monitoring your income and deductions.
I highly doubt you will escape the taxes owed if you actually earned the wages reported.

 

[army judge]

I was hired as an employee but last year the owner of my business made a switch and put all new hires on 1099. I told her I did not want this change for myself and she agreed to keep me as employee. Little did I know, as I was paid with personal checks from her on which she wrote a tax amount (turned out to only be ssi and medical), that for one year she was not withholding federal taxes, as if I am an independent contractor, but I never signed an agreement to that. Now I owe a very large sum of money to the government because I was being lied to. Is there anything I can do?

You can report her actions to the IRS and the CA income tax authorities.

You might get a warm reception, because they sometimes will investigate the person employing you as an alleged tax cheat.

You might also ask the IRS if there is help for you because you may have been deceived.

 

[hrforme]

"For the most part, the employer withholds these taxes on behalf of their employees, but in cases where an employer does not do this, or where an employee is self-employed, it is the responsibility of the employee to pay these withholding taxes....In addition, if the employer refuses to withhold employment taxes from these wages and the IRS is unable to collect the employment taxes from the employer, the employee still has the responsibility to pay income tax and is ultimately responsible for his/her share of the FICA tax." directly from the IRS files....

Did you fill out a valid W-4 as an employee? If so, what was your election and what generally do you make every 2 weeks? If not, she should have withheld at the Single 0 allowances rate. Your withholding is calculated based on wages and then status and then allowances. It is possible to have an election that has $0 withholding (M99 for example) or Is there any chance you wrote 'exempt' on the W-4 on line 7? because it is a bit strange that she processed FICA but not Fed Income Taxes. There was really no benefit for her to not do so if she paid you that amount in cold hard money. It would be different if she deducted it and then didn't remit it to the IRS on your behalf, but that is not what it sounds like.

You will owe the income tax withholding if it was not deducted and not paid. While she didn't withhold it, she also didn't keep it, you did.