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Buying a Fedex Ground Route
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<blockquote data-quote="dmac1" data-source="post: 2064259" data-attributes="member: 60252"><p>In another case with similar questions about IC status, but in front of the IRS, the IRS ruled that all payments from the company to the contractor was wages The IRS instructions were for the (now) employee to file amended returns, pay any unpaid employment tax the employer didn't pay, unless the employee paid SE taxes, in which case the employee may either still owe or be owed a refund if the statute of limitations hadn't passed for refunds. In addition, all the employees business expenses would be reported on schedule A, as nonreimbursed work expenses.</p><p></p><p></p><p>The end result would be that you could owe some tax if your expenses were more than 50% of your income.</p><p></p><p>For example-</p><p>if the employer paid you $100,000, and you had expenses of $60,000- Filing as independent you would have paid about 15% employment tax on $40,000 net, or about $6000. As an employee, the employer should have paid about $7500, (about 7.5% of $100k)and your share would be $7500 out of your earnings usually deducted before you get paid, and if you paid $6000 SE tax filing as an IC, you would still owe about $1500. But you might break even on your actual income taxes after using the deductions on your personal taxes.</p><p></p><p>On the other hand, if you had $40,000 in expenses out of $100k net, you would have paid about 15% of $60000 net income, or about $9000. Since as an employee, you should only have owed about $7500 as the employee share, and since you paid $9000, you would be owed a refund.</p><p></p><p>Since the case was started so long ago, the IRS may not even care. They can't go after fedex for taxes owed from 2002.</p><p></p><p>BUT (big but) you may still be better off refiling your taxes anyway, and if you owe, pay it even if the IRS can't force you to pay. If you are close to retirement, using the entire earnings as income could raise the amount you get from Social Security, or even disability or unemployment. I think any award from a settlement would count as income in the year you receive it. If I ever get a settlement I am going to see if I can get it spread out over one payment in Dec, and another in Jan, of whatever year.</p></blockquote><p></p>
[QUOTE="dmac1, post: 2064259, member: 60252"] In another case with similar questions about IC status, but in front of the IRS, the IRS ruled that all payments from the company to the contractor was wages The IRS instructions were for the (now) employee to file amended returns, pay any unpaid employment tax the employer didn't pay, unless the employee paid SE taxes, in which case the employee may either still owe or be owed a refund if the statute of limitations hadn't passed for refunds. In addition, all the employees business expenses would be reported on schedule A, as nonreimbursed work expenses. The end result would be that you could owe some tax if your expenses were more than 50% of your income. For example- if the employer paid you $100,000, and you had expenses of $60,000- Filing as independent you would have paid about 15% employment tax on $40,000 net, or about $6000. As an employee, the employer should have paid about $7500, (about 7.5% of $100k)and your share would be $7500 out of your earnings usually deducted before you get paid, and if you paid $6000 SE tax filing as an IC, you would still owe about $1500. But you might break even on your actual income taxes after using the deductions on your personal taxes. On the other hand, if you had $40,000 in expenses out of $100k net, you would have paid about 15% of $60000 net income, or about $9000. Since as an employee, you should only have owed about $7500 as the employee share, and since you paid $9000, you would be owed a refund. Since the case was started so long ago, the IRS may not even care. They can't go after fedex for taxes owed from 2002. BUT (big but) you may still be better off refiling your taxes anyway, and if you owe, pay it even if the IRS can't force you to pay. If you are close to retirement, using the entire earnings as income could raise the amount you get from Social Security, or even disability or unemployment. I think any award from a settlement would count as income in the year you receive it. If I ever get a settlement I am going to see if I can get it spread out over one payment in Dec, and another in Jan, of whatever year. [/QUOTE]
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