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| *Loan,banking and credit>>>income tax |
How much can an organization pay an independent contractor before income taxes must be deducted? |
Will they report income below this threshold to the IRS? You will receive a 1099 if you receive $600.00 or more. Even if it is over $600.00 they do not withhold income tax. It is your responsibility to pay the income taxes. It is not reported to the IRS if it is under $600.00. If they are truly an independent contractor, you never have to withhold income taxes on them. That is there responsibility. Be careful with the independent contractor and employee decision though. The quick test is whether the employer has control over the day to day activities of the individual. If so, then he is probably an employee. An independent contractor pays their own taxes. The employer pays nothing, and issues a 1099 at the end of the year. You don't withhold taxes on an indepentant contractor. unless they did not certify on the w-9 that they were excempt from back-up withholding or failed to complete a W-9 (Foreigners use W-8) and or did not certify that there TIN or Social security number was correct.If they fail to provide a Certified W-9 the you must withhold 25% of settlement as backup withholding. Note: You must withhold income taxes and social security from Independant contractors that are considered statuary employees such as couriers and delivery drivers. Instructions on W-9 |
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