when does a small business employer NOT have to report an employees wages and taxes?
Question by jamzesmom: when does a small business employer NOT have to report an employees wages and taxes?
Like is there a limit to what she has to pay someone..like 600.00 a year? She says I am considered casual labor and as long as my wages dont exceed 600.00 she doesnt have to pay taxes and neither do I…This is a small bookstore. That I no longer work at by the way because she wanted to pay me 100 percent “store credit”.
Best answer:
Answer by Judy1
If you are an employee, they must take out taxes and give you a W-2 at the end of the year no matter how little you make.
If you work as an independent contractor, they only have to give you a 1099 if they pay you $ 600 or more in a calendar year. You still are required to report it on your tax return though if you made over $400, or if you file a return for any other reason.
What do you think? Answer below!
Your employer was an idiot. Casual labor is slang for independent contractor.
Even $ 1 of wages is reportable.
Even if you “were” a contractor and she paid you in store credit, you’d have to report the credit as income. She’s make out like a bandit because she’d report the books at retail.
You do have to pay taxes. If you are an employee, then she is required to report it, even if it is less than $ 600. Once, an employer paid all but $ 9 of my pay in one year, and $ 9 in the next year, and reported the $ 9 (the tax was less than fifty cents).
The $ 600 rule applies to independent contractors. If you are an independent contractor and make more than $ 600, she is required to report it. If you are an independent contractor and make less than $ 600, she is not required to report it, but you are.