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Taxes?????

Discussion in 'Business Fundamentals' started by jggarrettllc, Mar 21, 2006.

  1. jggarrettllc

    jggarrettllc Junior Member
    Messages: 22

    Ok heres a question for any cpa's in the bunch. I did alot of carpentry work for a guy ($21,000) last year. Well at the end of the year we had a falling out and he witheld $4,400, but he said he would not 10-99 me for any of the money. I put the money in my llc bank account, so what can i do. Some say not to claim it........some say jail time. I'm searchin for answers....thanks

    jay
     
  2. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Contact a tax advisor. Too complicated a scenario for a forum like this. For instance, if he withheld money, how did you put it in your account?
     
  3. norrod

    norrod Senior Member
    Messages: 113

    BY Federal law he HAS to 1099 you if he paid you more then $600.

    If he withheld taxes, and he didn't immediately turn around and give that withholding directly to the tax man, he's already looking at tax fraud. And if he did pay if to the tax man,then I would think not 1099'ing you is going to throw flags on his return.

    You should be able to talk him into cleaning up the paperwork, it's in his best interest. the IRS does not play. Else all you gotta do is drop a dime on him when you call the IRS to ask them how you should proceed. They should be very interested to learn more about him.

    You can try to not claim it, but it'll come back to bite you in 7 years with penalty and interest. It is in your best interest to clean it up NOW.

    Good luck ! Let us know what happens.
     
    Last edited: Mar 22, 2006
  4. jggarrettllc

    jggarrettllc Junior Member
    Messages: 22

    he cant come up with the cash so he TOLD me that he was gonna hold the money and not 10-99 me. so to get the money im gonna have to go to court. He is payin the tax on the money. I'll probably call the irs and ask them......rat him out.
     
  5. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    He's paying taxes on money claimed as income by you and in your name??? So he's filing a return with your name on it as taxpayer?? Is he signing it as the tax preparer or is he forging your signature? How about your other income? Or is he going to claim that he paid himself $4400 (1099 himself) and claim it as income on his return?

    He TOLD you he wasn't going to pay you because he couldn't come up with the money? So as a favor to you, he wouldn't send you a 1099? You should send him a nice Christmas present as a "Thank You".

    Somebody please explain what I'm missing here. :help:
     
  6. norrod

    norrod Senior Member
    Messages: 113

    Did he pay you everything he owes you?

    Sounds like he withheld taxes, but didn't pay them to the IRS, and now if he generates a 1099 to you, he has to send a copy to the IRS. (Which he has to do, but he doesn't want to.)

    Nothing legal about what he's doing.

    Trouble is, you need to clain it, but you cannot prove he with held taxes.
     
  7. basher

    basher PlowSite Fanatic
    from 19707
    Messages: 8,992

    Tell him you want the money and the 10-99. Assuming there where no deductions and you had to pay taxes on the entire 21,000 @ 15% the tax bill would only be 3,150. So you're 1,250 in the black. If you're self-employed and paying more then 15% talk to your accountant, or a new one.

    Threatening to call the IRS for instructions is a great idea. Remember: The treat of physical violence is more intimidating then physical violence it'self. So call and ask for your money and a 1099, before you sic the dogs on his trail.