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Is it illegal to get a paycheck from someone you did a freelance work 3 times without getting taxed.

San Francisco, CA |

Here's the situation about my ex: He's a green card holder who met a man and collaborated with him for a few freelance graphic work each paychecks being worth $200 (in total of $600 which was paid to me ex), but my ex was not officially hired in terms of filling out an application or signing anything with that man. Just simply doing a few freelance work design through photoshop and getting those 3 paychecks. So is there anything illegal with this scenario in terms of not getting deducted for taxes....or if the employer does not deduct any taxes from the person who does a brief work for him, is accepted and up the the wishes of the employer. It's just this tax scenario that I do not know if is wrong or not. If it is wrong, who is in fault in this...I really need help in this

Attorney Answers 4

Posted

The fundamental question is whether your ex is an independent contractor or an employee.

If your ex was an independent contractor, then your ex is responsible for all of his own taxes. The person hiring him simply pays the agreed-upon contract amount ; If your ex was an employee, then the person hiring him must pay a share of the social security taxes, and possibly withhold income taxes.

It is not possible to say whether your ex is an independent contractor or an employee. I do not see how your ex did anything wrong here -- so long as he pays the appropriate taxes on the money he earned.

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Asker

Posted

No...I don't think you really read what I wrote. There is no paperwork. There was a verbal agreement on the fee, that's all. I really don't know the tax laws, so need help in understanding this aspect clearly for specifically this situation. So is this wrong or not

Asker

Posted

My ex is not a contractor. And does he officially need to be one or not. We got married, he got his green card, then he was not working, so get this brief freelance work for himself to earn pocket money because he needed money.

Asker

Posted

Again, we both went to see that man to talk about a possible collaboration, so the man said that he has a 3 designs that he can give my ex to work on as an artist. My ex needed money because since he arrived in the US, he was not working the whole time. Anyways, so we went home, the man sent him the designs to further fix and add more designs to it, so after a week when my ex finished the design, sent it via email to the man, and the man sent him a check for $200 for three times. When we were talking to that man, everything was verbal only. I am assuming being a contractor is an official thing, right. Please advise as I elaborated more about this.

Asker

Posted

Sorry....the way my x was let go after those 3 designs is that the man sent him an email (supposedly not liking the last design), made a stupid racist remark and said 'that's all'. So that was it. but I must repeat again that my x was legal in the country having a green card. So who is at fault here and is there anything illegal in this situation.

Asker

Posted

Could it be that even is someone does not pay taxes on $200 (total $600) it's still considered illegal or not. taxes always confuse me :)

Charles Richard Perry

Charles Richard Perry

Posted

The fact that your ex did not sign anything is irrelevant. The law simply creates two types of relationships between people when someone is hired to provide services. One relationship is "employer--employee" and the other is called an "independent contractor." Both can be oral arrangements, and people who do freelance graphic work can be "independent contractors" without holding any kind of "contracting" license. Again, I do not see your ex as having done anything wrong.

Asker

Posted

Ok, in that case no one is at fault here that no taxes were paid for those earned $600 I presume.

Asker

Posted

I am confused honestly...because you said that if my ex is a contractor then it's his responsibility to pay his share of taxes even if they were not officially deducted from his paycheck (there is no record of him earning money to pay the IRS anything back from it), but then you also said that if it is employee-employer relationship then it is the boss who needs to deduct the money. Sorry for not getting it :(

Posted

Completely agree with Attorney Perry. Hence, this is not an immigration question.

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Posted

There are lots of ways to earn income. Some of them are sporadic. If you look at IRS form 1040, there are many categories of income. It doesn't sound like your Ex was an employee so tax deductions would not have happened. He might have received an 1099 at the end of the year but you do not mention it. In this case, there is nothing wrong or illegal going on. However, an honest taxpayer would report that income, most likely in line 21 of IRS form 1040 under other income. Especially if the man that hired your Ex deducted the $600 as an expense. Yet the tax consequences if any is too complicated to discuss here and most likely not relevant in your Ex's case.

Goodluck.

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Asker

Posted

No, there was no forms filled. The whole thing was verbal and there are no docs involved for tax nor for the employment. I have provided lots of info about this to the first responder here, and would appreciate if you can read through it for a better understanding of the situation. Thank you.

Jong M Lee

Jong M Lee

Posted

IRS form 1040 is what most people use to file their yearly taxes . In line 21 of that form, you can report "other income" not reported elsewhere. Income is income whether or not your Ex signed anything with the man that hired him. Unknown to you or to your Ex, he may have deducted it as a business expense in his tax return. So can he get in to trouble if he doesn't report his income? Yes.

Asker

Posted

My ex does not know english too well, has no idea about taxes, never worked here as he is kind of new in the country...except the mentioned $600 from that man, so no taxes have been filed by him since he started living in the US. So based on what you said, it is the 'employer' who unofficially hired him (verbally in this situation) had to deduct but since there was no deduction or anything in the paychecks my ex got, i highly doubt that he would have done the deduction behind the scenes if he sent a round number to my ex and that $200 was agreed upon verbally. So from what I understand only that employer is liable for the undeducted/unreported income...thank you for your help. :)

Jong M Lee

Jong M Lee

Posted

That isn't what I said. I apologize for the confusion with the pronouns. Basically your Ex is required to report the $600 he arned in his income tax return and pay any applicable taxes. He hasn't done anything wrong yet. However If your Ex doesn't report his income than he may get into trouble with the IRS if he is audited.

Asker

Posted

Oh, thanks for the clarification..really appreciate it. This occurred in 2011...so he's too late to file it right. In terms of audit, there is no trace because that man won't 'sell' my ex...so the burden of proof would be on me as a witness to all of it, but if they deny this, then i am powerless. In fact, there is a witness report against me, though, by the 'employer' who says that they are collaborating now and that he also hired my ex in 2011! Oh wow so I guess this is a proof because he has said it himself..so if he hired my ex in 2011 as he confirmed it himself, then there ought to have been an IRS reporting of that income and plus my ex should have paid it...if they say they did not collaborate then there is always that witness affidavit submitted to me and to the court lol....i just thought about it :) that they can not say the same after having confirmed this fact themselves. So in this case all of the burden is actually on my ex then...having worked together in 2011 will prove that no taxes were reported on 2012 tax return (which my ex didn't even do in the first place),..thanks SO MUCh for your helpful info. I do appreciate it and sorry for the typos as I'm typing in bed lol.

Posted

Agreeing to work for pay that includes no deductions for taxes is not per se illegal but not paying taxes on that income is. If you believed yourself to be an independent contractor, you are entitled to get paid a gross amount, but you have to account for that income yourself and pay quarterly deposits to the taxing authorities. If you thought yourself to be an employee, you will still have the same obligation if the employer failed to properly retain and pay deductions.

At this point, be sure to report all of the income and pay all of the taxes due. Speak to a tax person about whether you have a present obligation to make any quarterly deposits toward your taxes.

Good luck to you.

This answer should not be construed to create any attorney-client relationship. Such a relationship can be formed only through the mutual execution of an attorney-client agreement. The answer given is based on the extremely limited facts provided and the proper course of action might change significantly with the introduction of other facts. All who read this answer should not rely on the answer to govern their conduct. Please seek the advice of competent counsel after disclosing all facts to that attorney. This answer is intended for California residents only. The answering party is only licensed to practice in the State of California.

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Asker

Posted

Thanks, as you can see this was not about me. My ex only earned $600 in 2011, so would you say that amount i required to be taxed or not. Is there a limit as to how much your income should be in a year in order to file taxes. I thought about this and assumed that maybe $600 is insufficient amount to be taxed if that's all that was earned in a tax year.

Neil Pedersen

Neil Pedersen

Posted

As I do not do any tax law, I cannot say for sure, but I think you are right. Good luck.

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