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Posted by trippknightly on October 7, 2007, 7:01 pm
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If I exceeded the income cap for FICA (not medicare, I
believe that has no cap) and am now an independent
contractor, I gather that I don't need to pay my employee
side of self-employment tax. However, do I still have to
pay the *employer* side - the fact that cap was reached
earlier in the year w/ a different employer is irrelevant to
this new employer (myself) from a tax liability standpoint?
Thanks.
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Posted by Harlan Lunsford on October 8, 2007, 6:43 pm
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trippknightly@hotmail.com wrote:
> If I exceeded the income cap for FICA (not medicare, I
> believe that has no cap) and am now an independent
> contractor, I gather that I don't need to pay my employee
> side of self-employment tax. However, do I still have to
> pay the *employer* side - the fact that cap was reached
> earlier in the year w/ a different employer is irrelevant to
> this new employer (myself) from a tax liability standpoint?
You've got it correct. Neither you as employee nor you as
(self) employer pays. When you file your 1040 end of year,
you'll use schedule SE to calculate and then consider that
as an employee you formerly paid in enough.
ChEAr$,
Harlan Lunsford, EA n LA
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Ron Hardin on October 8, 2007, 6:43 pm
Please log in for more thread options trippknightly@hotmail.com wrote:
> If I exceeded the income cap for FICA (not medicare, I
> believe that has no cap) and am now an independent
> contractor, I gather that I don't need to pay my employee
> side of self-employment tax. However, do I still have to
> pay the *employer* side - the fact that cap was reached
> earlier in the year w/ a different employer is irrelevant to
> this new employer (myself) from a tax liability standpoint?
It gets taken off your tax when you fill out the 1040 and
Sched C, whatever the rule is. There's no direct payment
for it. It's just a liability cancelled.
An independent contractor simply pays a higher rate for
FICA; there's no distinction between employee side and
employer side.
--
rhhardin@mindspring.com
On the internet, nobody knows you're a jerk.
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Bill Brown on October 8, 2007, 6:43 pm
Please log in for more thread options trippknigh...@hotmail.com wrote:
> If I exceeded the income cap for FICA (not medicare, I
> believe that has no cap) and am now an independent
> contractor, I gather that I don't need to pay my employee
> side of self-employment tax. However, do I still have to
> pay the *employer* side - the fact that cap was reached
> earlier in the year w/ a different employer is irrelevant to
> this new employer (myself) from a tax liability standpoint?
If you are reporting your business activities on Schedules C
and SE then you will stop paying both halves when you reach
the limit.
If your business is a corporation and you are an employee of
that corporation the employer will have to withhold FICA
until you reach the limit with that employer. When you file
your 2007 income tax return you will get a credit for the
excess withheld by all your employers. Your corporate
employer will NOT get a refund or credit for its matching
half.
Regards,
Bill
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Phil Marti on October 8, 2007, 6:43 pm
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> If I exceeded the income cap for FICA (not medicare, I
> believe that has no cap) and am now an independent
> contractor, I gather that I don't need to pay my employee
> side of self-employment tax. However, do I still have to
> pay the *employer* side - the fact that cap was reached
> earlier in the year w/ a different employer is irrelevant to
> this new employer (myself) from a tax liability standpoint?
No, you don't have to pay any of the FICA portion of SE tax.
See Schedule SE of the 1040.
--
Phil Marti
Clarksburg, MD
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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