Today TaxMama® hears from Robert in the TaxQuips Forum who is suspicious. “I am a 1099’ed contract driver. I recently noticed they are taking taxes out of my check. I was told that they take taxes out, then make quarterly payments to federal income tax. I have worked as contract labor before and they didn’t take anything out. Is this normal or does this sound fishy?”
Are you sure they are paying the money quarterly? When they withhold your money, it should be going in right away.
Why are they withholding your money?
Well, did they ask you to provide a Form W-9? They should have asked in January. You should have submitted it immediately. If you don’t provide them with this signed document, they are required to take ‘back-up’ withholding. That means, they must take 28% out of each of your checks.
So, now get in touch with the payables department and find out if the withholding will stop if you provide the Form W-9.
Oh yes, what is another reason they might be taking withholding?
If you owe back taxes to the IRS, they might have notified your client and levied your earnings. Find out if that was the case. You’ll sort this out.
And remember, you can find answers to all kinds of questions about withholding, and other tax issues, free. Where? Where else? At www.TaxMama.com.[Note: If you were subscribed to the e-mailed version of TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the join TaxMama.com link – it’s free!]
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