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Tax question

Discussion in 'BlackHat Lounge' started by cucr3, Nov 6, 2008.

  1. cucr3

    cucr3 Regular Member

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    Ok, so I do work online.. obviously ;) and am paid by check. Anyway, my question is how does or will the IRS know how much I make? My employer has my SS#, but does not have a W9 from me. Do they report to the IRS how much they paid me? OR does the IRS check my bank account to see how much money is in there and how much I have or haven't paid them? OR run my name to see how many checks I have cashed and for what amounts? It's not like a traditional job where taxes are taken out before you receive your check and the government gets their cut right away.

    BTW this isn't a thread about tax evasion, I'm not that stupid... I'm just ignorant on how the whole tax system works from this other end. TIA.
     
  2. mattstrike

    mattstrike Regular Member

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    If you are paid $600 US or more by any given entity, then whoever is paying you is required, by law, to file a 1099 for you, and to provide you a copy of that filing. Generally, all that someone needs is the social in order to file. Most of the big online employers actually have you fill out the form because it makes their compliance accounting easier, and completely offloads the burden in the event of fraud on whoever signed the form.

    The IRS does not, under normal circumstances, check your bank account, but under some circumstances, they will audit someone, at which point they will basically go CSI on your records, including your bank accounts.

    In the US, you need to document all possible business expenses, and then take the remaining "profit", and hold an appropriate amount back for both the federal and state levels. If you are making enough to support yourself, and the tax issue seems like a headache, consider talking to UptownBulker about incorporating, and/or getting an accountant to help you set things up to legally minimize your tax burden.
     
  3. blade

    blade Regular Member

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    Wish that was a thread about tax evasion...would be more interesting :)