HELP??

we are confused, first our tax preparer told my h that we did not have to pay SStax that it was an option. Today he tells my sister in law {who is handling all tax issues} us that we have to do it we have no choice. She explained to him that she didn't want to be confused that she wanted to make sure that she had what he was saying right, and that she would have my H call to talk to him and make sure we were all on the right page. He said "I don't have to talk to him, I have said all I am going to say about it, then he walked out of the room". We are thinking that either he has made a mistake, or that he does not know what we are to do. He has prepared the 1099's for our employees, present and past during 2007.

What do we do?? Do we have to pay these taxes? Does anyone know??

OMGOSH, this is a huge headache!

I thought that the 1099 was when you paid an independent contractor who, by definition, pays their own FICA and so forth (both employer and employee portions).

If you pay the employer's portion of social security, you give the employee a form w-2.

If the person is your employee, you pay social security (and keep withholding, etc. from their checks for their portion and forward it to the social security administration). You give these a w-2.

If the person is considered "self employed" and you are hiring their business (after a fashion), then you don't pay social security.

At least that's the way I understood it back in the day when I kept books for a church. It's been a lot of years since I saw a 1099, but I don't recall that there's even a place on the form to report social security withholding, etc.

I'd consult another "tax expert" if I were you.

Oh Torp! Please say it ain't so!

We have so much of our own tax issues, we don't want to get into more headaches with mil's!

I don't know what we are going to do about this, I will talk to H tonight and let him figure it out. criminy!

Honestly, I'd consult someone with specific expertise about these things. I'm not an expert; I only know how our church did it. And even at that, this was ten years ago. Tax laws, definitions, etc. change every year.

But it seems to me that, just based on how we did it for the church, either he's filing the wrong form and you DO have to pay FICA, or else he's wrong about the FICA.

For example: The church had a custodian who came once a week to clean. We'd been paying him a set sum every week, and giving him a 1099 at the end of the year. No withholding, employer tax, or anything as though we were hiring a janitorial service. But the IRS came back and decided that since he used our equipment (sweeper, etc.) and supplies, he was our employee and we should withhold FICA and pay our portion, then report it on a W2.

Now the guy that did the yards was considered a service. He brought his own equipment, etc. He was considered self-employed so we could consider him a contractor and just report his income on 1099.

There may be different rules for paid in home caregivers, etc.

You are exactly correct, TORP. I kept books for years for several local corporations and what you have said is the way it is. In-home medical help could go either way, depending on how much equipment is involved (stethescopes, sphygmomanometers, oximeters, etc.) or whether their duties are mostly housekeeping, changing (using your supplies and equipment) and sitting services.

I would fire that accountant simply because of his attitude and the remark he made. Those folks cost too much to put up with snitty attitudes. He SHOULD have been kind enough to explain to your SIL and husband EXACTLY how the IRS differentiates between paying an outside contractor and an employee. There is plenty of info on this available from the IRS website.

BWB, keep your head, girl! Don't panic.

I'm with MB on the fact that this ACCT's attitude needs adjustment. What a jerk!

The IRS site has lots of info, and probably a call number too. Also, maybe one of our members will have some insight, too.

Thanks girls! You are all so supportive and I appreciate that so much. H was cool about it, said we are getting way too upset and just need to know what we need to do and do it. He is also going by to speak to this accountant today.
Personally, I think he was extremely rude, and I would have said much more to him than my sil did. I think it might have gotten a little testy! .

I am going to follow H lead, much calmer and makes things easier on me.

blue, i am way out of my leasgue discussing taxes. as you mght remember i care for daisy in our home and with the exception of meds we supply everyting. i pay both sides, her son pays nothing except my monthly check, that's it on his part. we declare the income and pay all taes on it. we send a check to the irs 4x a year. i don't know how your employee situation is set up, but i would look at a new acct. taxes are trying enough without dealing with unhelpful atttude. just my opinion. good luck.

Hap, thanks for being supportive.

Sil dropped off the 1099's last night, I offered to mail them for her since she is working today and tomorrow. I should have known that there would be no smooth sailing...half of them have the persons name and my address . Now CRIMINY! We have to take that and get it fixed...plus the first one I handed out to the night cg, was wrong, too much money was claimed on it!! , now my anxiety is out of the roof! I can just see how much fun this next week is going to be! I think H is going to have to take it from here, this is a boat load of you know what!!!!

Ok, I think I vented pretty well for tonight!