My wife has a new job grooming dogs.Congrats. Sounds like a job on the "cutting" edge.She goes to the owner's shop, does the work there and receives a paycheck. However, they do not withold taxes.<i/>Do they not withhold ANY taxes or just not federal withholding? Do they withhold state taxes? Is she considered self-employed by the IRS?<i/>If they do not withhold ANY taxes, then yes she is considered self employed and will have to file Schedule C to report her income and expenses. She should keep track of any expenses she has related to this "business".Can I simply increase my deductions on my job's paycheck enough to cover her taxes or do we have to pay separate Social Security payments for her as well as Federal taxes? <i/>Yes, increasing your deductions at work is valid and even a good way to cover the taxes if they are not large. Otherwise you can pay quarterly estimated taxes. Do keep in mind, you will pay Federal Income taxes, Social Security and Medicare taxes. The Social Security and Medicare taxes are about 13%. Your Federal taxes will be based on your taxable income. For most people it is 15% or 28%. So make sure you are having enough withheld.If you have any other questions you can e-mail me or post it here.Good luckZeb and Hildegarde
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