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Daughter is a website monitor making $12K and got a 1099 Misc from her employer. No tax, either Fed or HI state, was withheld.

And she's just now noticing? If she hasn't yet received any pay, shame on her for staying. If she got paid without any withholding, shame on her for not noticing. I'm hoping she's quite young and just now venturing into the workplace. Lesson 1: Pay attention to your paycheck!

Q: the employer calls her an "independent contractor" and according to DD, seems to feel they are exempt from withholding tax on her pay. Is the employer right?

It's a facts and circumstances question. IRS Form SS-8 has the 20 common law questions to answer in making the determination. Work situations can be designed to be either independent contractor or employer/employee, but the time one deals with that is at the beginning of the work relationship. The paperwork (if everyone's behaving properly) is a clue. IC's give the hirer a W-9. Employees give the employer a W-4.

Your first step is to determine whether or not this is truly an independent contractor situation. Get back to us when you've reached your conclusion, and we'll offer options from there.

Rule Your Retirement Home Fool
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