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Barbara Lamar

Barbara Lamar’s Answers

4 total

  • Are foreign companies that hire Americans subject to IRS rulings concerning employee vs independent contractor in the US?

    Barbara’s Answer

    Since the company you work for exercises significant control over your work, you would likely be considered an employee under both Texas and federal law. A foreign company that does business in Texas is required to register with the Texas Secretary of State and is subject to Texas and federal laws governing relationships between principals and workers. Although the IRS and Texas State Comptroller will look at a contract stating you are a contractor, they don't pay much attention to it. They are more concerned with the nature of the relationship between you and the company you work for. I agree with Mr Thrasher that it would be a good idea to consult an attorney or CPA to answer specific questions and to help you negotiate with the company, it that's what you want to do. As an independent contractor, you have to pay 100% of your FICA tax (social security and Medicare), whereas an employee only has to pay 50% of the FICA tax while the employer picks up the other half. Also, as an employee you'd have less uncertainty about your ability to collect unemployment benefits if you're laid off. On the other hand, as an independent contractor, you can deduct business expenses on your tax return. There is no one-size-fits-all answer.

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  • Substitute of return filed by IRS changed my marital filing status. Can I amend it to change it back to a joint return?

    Barbara’s Answer

    • Selected as best answer

    Yes the IRS can do that. But you can file a return showing the correct information. It will not be an amended return, since it will the be first return you have filed. You'll want to make sure your husband had not already filed a return using married-filing-separately or single status, but once you're sure he has not already filed, there is nothing to prevent you from filing your tax return for 2009. It will supercede the one the IRS prepared for you. However, you'll need to be prepared for penalties and interest for late filing, so your ultimate tax bill is going to be greater than the tax that would have been due if you filed on time.

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  • Do I need to keep receipts on all my expenses for tax purposes?

    Barbara’s Answer

    It's best to save your receipts, but if you have credit card statements or bank statements that clearly show how much was paid to whom, you don't necessarily need receipts for all expenses. For example, if you have a payment to Tractor Supply on your credit card statement, the IRS will generally accept it as farming expenses. Where you really need receipts are for items you purchased using cash, or items purchased from stores that sell a wide range of products, such as Walmart or Target. Also, the IRS is stricter about certain kinds of expenses, such as vehicle expenses and entertainment. I have a couple of articles on my website that explain how to document vehicle and entertainment expenses.

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  • Non-Profit Organization.

    Barbara’s Answer

    • Selected as best answer

    I really like your goals! You'd be helping both the students and their potential employers. You can easily set up a non-profit corporation through the Texas Secretary of State's website, but just setting up the corporation is not going to make your organization tax exempt. To get exemption from federal taxes, you need to file Form 1023. To get exemption from Texas taxes, you need to file an application and fit into one of the categories shown on the application. The easiest way to satisfy the Texas requirement is to have federal tax exemption. The best way to be success with Form 1023 without spending a lot of money on legal fees is to do most of the heavy lifting yourself, and then hire a lawyer to review it before you send it to the IRS. The form looks pretty daunting, since it's something like 50 pages long. But the bulk of the form is separate schedules for different kinds of organizations; most of the schedules won't apply to you. The part you actually have to fill in is not that bad. I wish you the best of luck! We need organizations like yours here in Texas.

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