- quote -

Legitimate expenses may be written off if they are incurred
as an employee or an independent contractor. Business
people subtract expense from their gross receipts. Employee
expenses are subject to a 2% reduction, based on adjusted
gross income, and must be able to exceed their standard
deduction for there to be any tax benefit. If your employer
is withholding tax, it is unlikely you will have any penalty
for underpayment of tax.

"To determine whether a worker is an independent contractor
or an employee under common law, you must examine the
relationship between the worker and the business. All
evidence of control and independence in this relationship
should be considered. The facts that provide this evidence
fall into three categories: Behavioral Control, Financial
Control, and the Type of Relationship itself.

Behavioral Control covers facts that show whether the
business has a right to direct and control how the work is
done through instructions, training, or other means.

Financial Control covers facts that show whether the
business has a right to control the financial and business
aspects of the worker's job. This includes:

The extent to which the worker has unreimbursed business
expenses, The extent of the worker's investment in the
facilities used in performing services, The extent to which
the worker makes his or her services available to the
relevant market, How the business pays the worker, and The
extent to which the worker can realize a profit or incur a
loss.

Type of Relationship includes:

Written contracts describing the relationship the parties
intended to create, The extent to which the worker is
available to perform services for other, similar businesses,
Whether the business provides the worker with
employee=E2=80=93type benefits, such as insurance, a pension
plan, vacation pay, or sick pay, The permanency of the
relationship, and The extent to which services performed by
the worker are a key aspect of the regular business of the
company.

For more information, refer to Publication 15-A (PDF),
Employer's Supplemental Tax Guide. If you want the IRS to
determine whether a specific individual is an independent
contractor or an employee, file Form SS-8 (PDF),
Determination of Worker Status for Purposes of Federal
Employment Taxes and Income Tax Withholding." =3D You may
download the forms and publications from http://www.irs.gov

Good Luck!!=3D


"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=3D

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I am looking for some help. i am currently paying taxes as a
full time employee (i am currently on work visa)in a
computer related firm. I got the opportunity to work
part-time(have legal work visa from part time employer) from
home during the week and reporting atleast once in a week
physically to my self-employed boss who lives 80 miles away.
The earnings in the last 6 months have accumulated to about
5000 dollars. My boss is not very conversant with the
independent contractor issues and i want to give him and
myself a heads up before he goes to his financial advisors.
Could anyone tell me:

1. how should i go about asking my employer to give me form
1099 or whatever ?

2. when he does that can i ask him to deduct taxes so that i
dont need to pay taxes?or if i have to pay taxes no matter
what?

3. Can i deduct travel expenses and what form of
documentation is needed to prove the travel

4. can petty expenses like meals etc..during travel be
written off?

5. how frequently must i report this income to the IRS? and
have i already failed in doing so? will i be fined if i try
to pay taxes now and to what amount?

i know i asked a lot of questions. i would be really obliged
if someone could help me. thanks

philster

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->