Hatrack River Forum: Self-Employed or Employee? Tax Question

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Posted by Katarain (Member # 6659) on :

Heya,
Last night I posted a little on this, but I was depressed and crying and just decided to delete it.

Anyway, I have a question... my husband worked as a programmer/networker for one man's business in 2004. The business is located in South Carolina, and we are in Georgia. My husband worked for no one else the entire year.

When doing the taxes last night, I discovered a bunch of self-employment tax we're supposed to pay. I haven't entered in all of our deductions yet (home office expenses). So before the deductions, we're still being expected to pay around $100 after earned income credit has been taken into account.

This is bothering me a lot--because $100 might as well be a pound of diamonds for us right now. I make less than our bills (necessary bills--not frivolous expenses) and yet still work full time--and my husband's been sick enough to have to drop out of school, so extra income from him is out for a while.. and with doctor's bills and prescriptions.. well, we're in a bad way... this tax news is not good.

So, since he only worked for one person, could he be classified as an employee without a w-2? I figure it's a little late to have the business do anything--and he's not really on good terms with them at the moment anyway.

Well..thanks..

-Katarain

Posted by Dagonee (Member # 5818) on :

It depends on the details of the relationship. Here's a decent overview site:

quote:
a worker is an employee when the person for whom services are performed has the right to control and direct the individual who performs the service. This control must reach not only the result to be accomplished, but also the details and means by which the results are to be accomplished. The employer need not actually exercise control. It is sufficient that the right to do so exists. It is the substance of each particular relationship that governs; therefore, the employers may not simply contract away their employment tax liabilities.

Check out the list of 20 factors about 1/4 the way down the page.

Dagonee

Posted by Katarain (Member # 6659) on :

I hate to say it, but I think he would be classified as self-employed. Well, the deductions should help out.

Eh. We would have been better off getting divorced, having a baby, and going on all sorts of federal and state aid. Shame on my husband for actually trying to help support us.

Thanks very much for the link, Dagonee. I appreciate it.

-Katarain

Posted by rivka (Member # 4859) on :

(((((Katarain)))))

Posted by Katarain (Member # 6659) on :

Thanks:)

Believe me, I hate having a woe is me attitude... but there's only so much I can take! And I've only shared about a third of it here.

Life is very hard.

-Katarain

Posted by TomDavidson (Member # 124) on :

If it gets too hard, seriously, mention it here. Hatrackers have historically been pretty good about helping out.

Posted by Katarain (Member # 6659) on :

Yes. Hatrackers are great people. Tis why I keep on coming back. [Smile]

I was handling the stress pretty well, actually--mostly by ignoring it and concentrating on what I had to do. That's not working very well anymore.

Well, I'm going to try to be optimistic... if we can only make it until June... we'll get more money and hopefully will be able to prepay some of our bills. Although right now, I'm considering applying for some teaching jobs at my church's schools around the country. (Seventh-day Adventist.) I've been wanting to become a teacher again--despite my previous problems with it. I miss it. A lot. I did the public school thing. I'm ready to try private. Maybe. I haven't ruled out public.

I appreciate the support. I could be a lot more whiny, but it's not really productive. I still have a "cry headache" from last night.

-Katarain

Posted by Belle (Member # 2314) on :

If I can help, let me know - I've done the self-employment tax thing for years now.

This is our last year to have to struggle with it, now that we've closed the business my husband has a job that actually cuts taxes. That's going to be relief come tax time next year.

I feel your pain, sweetie. [Frown]

Believe me I know what's like to fill out that return and see how much money you owe. Self-employment tax is a killer.

*hugs*