W4 Withholdings
Take control of your finance by managing your W4 withholdings. As a United States Citizen, you are required to pay your fair share of taxes, nothing more and nothing less. It’s to your advantage to know and understand how your W4 withholding affects the outcome of your tax implication. Several factors influence the amount of income tax withheld from your pay, including your filing status and how many dependents you have. Your employer will take the information you put on your W4 and apply to the IRS withholding table to determine the amount you are required to pay in taxes. In general, if you carry the same allowance on your tax return as your W4, then your tax implication should be 0. This is because you have paid your required taxes during the year from your paycheck. If you overpaid during the year this will result in a tax refund when you file your tax return. If you underpaid during the year this will result in a tax bill you must pay and could result in interest and a penalty. It is important to have a Tax Advisor who can explain tax laws and withholdings.
1099-Misc
First and far most, you should know if you receive a 1099-Misc form you are required to report the money as income. Second, you are required to pay income tax and self-employed tax both. Beware, if a business says, “I will treat you as an Independent Contractor or Self-Employed person” this means you are solely responsible for paying your own taxes. Every US taxpayer must pay Social Security tax and Medicare taxes on his or her income. For self-employed individuals, these taxes are called self-employment taxes. Self-employment taxes are calculated on the individual’s federal income tax return based on the net income from the business. It’s best to seek advice from a Tax Advisor.