NBR: Anyone tax knowledgeable?

Re: NBR: Anyone tax knowledgeable?

• blondii428 member

  January 2014 edited January 2014

  Well they aren't claiming him this year, they said that we should do our own joint return now that he is married and since he now has primary custody of his daughter that we will be claiming. 

  I just googled small business W-2s and it looks like he is required to make one.  Not sure if he will be able to figure that out..

     

  

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• kennazebrowsky member

  January 2014

  Do they take taxes out? He might send him a 1099 if he doesn't. Then you will owe some money back.
  
  If he is paid under the table you might be better off not reporting anything. I would definitely talk to the dad to get better details before you file. They are probably doing it a weird way to save money on taxes on their end.

  
  
  
  
  

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• VitaLuna member

  January 2014

  I *think* when you file somewhere like turbo tax online, there is a section where it asks if you had any income that was not taxed. Online tax filing places usually have live help, too... Or you could go to a tax preparer.
  
  Be aware, though... You're probably going to owe a lot in taxes this year because his dad didn't take out taxes up front like he should've. Your H may want to talk to your dad about changing that in the coming year. If not, you're going to have to be pretty diligent about putting money into savings for year end taxes.

  

   

  

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• blondii428 member

  January 2014 edited January 2014

  I think I figured it out.  His Dad is required to give him a W-2, so he'll need to figure out how to do that. It frustrates me beyond belief how his Dad has so carelessly handled this. 

  I know that we are going to have to pay taxes on his income, but I'm hoping that with two dependents and the money that I overpaid, that we come close to breaking even. 

     

  

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• kgravil85 member

  January 2014

  kennazebrowsky said:

  Do they take taxes out? He might send him a 1099 if he doesn't. Then you will owe some money back.
  
  If he is paid under the table you might be better off not reporting anything. I would definitely talk to the dad to get better details before you file. They are probably doing it a weird way to save money on taxes on their end.

  Agree with this. If taxes were withheld then he has to get a W2. If not, he needs to fill out a W9 to give to his father and his father needs to issue him a 1099.

  
  

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• redfallon member

  January 2014

  I don't understand how he can claim him as a dependent.

  Jamie

  
  

  
  

   

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• redfallon member

  January 2014

  https://turbotax.intuit.com/tax-tools/tax-tips/Family/How-Do-I-Claim-Someone-As-a-Dependent-on-Taxes-/INF14444.html
  
  Claiming a child generally requires that they live with you for more than half the year, they don't provide more than half of their own financial support and are under the age of 19, or under 24 if a full-time student. Claiming adults as your dependents is allowed if you satisfy similar requirements.
  
  https://ttlc.intuit.com/questions/1894472-who-is-a-dependent
  
  

  Other relatives

  Many families provide homes for relatives such as parents or grandparents, or give financial support to relatives who live across town or across the country.

  Here's a list of the people considered to be relatives who might qualify as dependents even if they don't live with you:

  • Children, grandchildren, and stepchildren
  • Siblings, including half and step siblings
  • Parent and grandparents
  • Stepparents
  • Aunts and uncles
  • Nieces and nephews
  • Fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law, brothers-in-law, and sisters-in-law

  They must ALSO meet these qualifications for the year:

  • Have been a citizen or resident of the United States, or a resident of Canada or Mexico.
  • Did not file a joint income tax return with anyone else.
  • Received more than half his or her support from you.
  • Had less than $3,900 of income for the entire year. (Generally that amount does not include Social Security benefits.)

  Note: If your child is not a qualifying child for 2013 because he or she does not meet the age/student test or the principal place of residence test, you may still be able to claim a dependent exemption for the child as your qualifying relative, but only if he or she has gross income under $3,900 and you provide more than half of his or her support.

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  Generally, someone that works for you is not your dependent.
  

  Jamie

  
  

  
  

   

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• VitaLuna member

  January 2014

  Im also curious how his kid is now magically his dependent when he himself was a dependent the year before. Sounds like some shady behavior all around. Also, I believe only one person can claim a child as their dependent... So if he claims his kid as a dependent, the kid's mom cannot (and vice versa). And I would be quite surprised if you broke even.

  

   

  

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• diamondhappy member

  January 2014

  Unless things have changed, I believe the other ladies are correct. If no taxes are taken out, your dh is suppose to get a 1099 not w2. When I received a 1099 I would try to put some money to the side, as well as write things off to lessen the amount of money owed. If at all possible I strongly encourage you to look into seeing a tax professional to figure out what things you may be able to write off.

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• mladerri member

  January 2014

  I would recommend spending the money and working with a CPA. There are multiple things wrong with this scenario. It sounds like he is an employee and not a subcontractor. Employees receive w2s, sub contractors receive 1099. If no taxes were withheld he should have been paying estimated payments every quarter. There are specific rules about employees v sub c's. Business needs to change their accounting methods. I hope your tax liability is manageable.

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• mladerri member

  January 2014

  kennazebrowsky said:

  
  
  If he is paid under the table you might be better off not reporting anything.

  Pretty sure this is illegal. Maybe not the best advice. Better off paying the high tax this year, get the situation under control (IRS has payment plans if need be).

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• VitaLuna member

  January 2014

  mladerri said:

  kennazebrowsky said:

  
  
  If he is paid under the table you might be better off not reporting anything.

  Pretty sure this is illegal. Maybe not the best advice. Better off paying the high tax this year, get the situation under control (IRS has payment plans if need be).

  I didn't even see this earlier. That is horrible advice, and so illegal. It will come back to bite you if you don't report it, and it will hurt.
  
  

  

   

  

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• rachelstauf member

  January 2014

  It's a different of a job, but I'm thinking the rules are the same as in my situation. I'm a nanny. My employer had to get an employer ID number and has to give me a W2. They also have to pay the employers part of my taxes and I pay the rest. I can pay these taxes quarterly with no fee or at tax time with a fee.

  
  

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• blondii428 member

  January 2014

  VitaLuna said:

  Im also curious how his kid is now magically his dependent when he himself was a dependent the year before. Sounds like some shady behavior all around. Also, I believe only one person can claim a child as their dependent... So if he claims his kid as a dependent, the kid's mom cannot (and vice versa). And I would be quite surprised if you broke even.

  He lived at home in prior years so I guess that's how they got away with claiming him.  I agree, it's a total mess and they weren't doing things right at all.  Makes me want to scream! 

  Oh and to explain the above, he just got custody of his daughter last year and part of the CO was that he will be claiming her on taxes. 
  

     

  

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