question about paying estimated taxes

Posted by Jane on June 13, 2009, 4:35 pm

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My son-in-law earns about $500 a month. For some reason his employer
won't withhold any taxes. My daughter has MS and is on SSDI which is
exempt from tax.

Is it necessary for my son-in-law to pay quarterly taxes? As I've
said his yearly income is about $6000. Income including my daughter's
SSDI is about $22,000.

I would hate to see them get stuck for interest and penalties when
they are barely able to make do with what the have now.

thank you.

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Posted by Mark Bole on June 13, 2009, 5:09 pm

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Jane wrote:

> My son-in-law earns about $500 a month. For some reason his employer

> won't withhold any taxes. My daughter has MS and is on SSDI which is

> exempt from tax.

> Is it necessary for my son-in-law to pay quarterly taxes? As I've

> said his yearly income is about $6000. Income including my daughter's

> SSDI is about $22,000.

Not only should he end up not owing any taxes, he may well qualify for
Earned Income Credit (EIC), depending on a few other factors. So no,
there is no reason to make estimated payments based on what you've stated.

-Mark Bole

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Posted by George Anthony on June 13, 2009, 9:48 pm

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> Jane wrote:

>> My son-in-law earns about $500 a month. For some reason his employer

>> won't withhold any taxes. My daughter has MS and is on SSDI which is

>> exempt from tax.

>> Is it necessary for my son-in-law to pay quarterly taxes? As I've

>> said his yearly income is about $6000. Income including my daughter's

>> SSDI is about $22,000.

> Not only should he end up not owing any taxes, he may well qualify for

> Earned Income Credit (EIC), depending on a few other factors. So no, there

> is no reason to make estimated payments based on what you've stated.

> -Mark Bole

Sponds like he is being treated as self-employed by his employer. In that
case there might be Social Security and Medicare taxes that have to be paid.

George Anthony

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<< The foregoing was not intended or written to be used, >>
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<< that may be imposed upon the taxpayer. >>
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Posted by Mark Bole on June 14, 2009, 9:58 am

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George Anthony wrote:

>>> My son-in-law earns about $500 a month. For some reason his employer

>>> won't withhold any taxes. My daughter has MS and is on SSDI which is

>>> exempt from tax.

> Sponds like he is being treated as self-employed by his employer. In that

> case there might be Social Security and Medicare taxes that have to be paid.

Income tax withholding on a married employee with $500 monthly pay is
zero, so that is another assumption we can't make without more
information from the OP.

-Mark Bole

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<< 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. >>
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Posted by Phillip Marti on June 14, 2009, 5:48 am

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"Jane" wrote:

> My son-in-law earns about $500 a month. For some reason his employer

> won't withhold any taxes. My daughter has MS and is on SSDI which is

> exempt from tax.

A correction here. It's not important now, but hopefully someday they'll be
in better financial shape, and it could matter. Social Security disability
(SSDI) benefits are taxed the same as Social Security retirement benefits.
(At their current income level, none of it would be taxed.) SSI is
tax-exempt.

> Is it necessary for my son-in-law to pay quarterly taxes? As I've

> said his yearly income is about $6000. Income including my daughter's

> SSDI is about $22,000.

As someone already mentioned, it sounds like he's being treated as an
independent contractor. This may or may not be correct, but if he is an IC,
he's going to owe self-employment tax even though there won't be any income
tax due. Even if he's an employee he's going to owe the employee's portion
of Social Security/Medicare tax.

Someone also mentioned the Earned Income Credit. Without knowing their ages
and whether they have children, we don't know whether they'd qualify or not.
If they are childless, even if they qualify it won't be enough to pay the
self-employment tax.

I suggest he find a low-income tax clinic in his area and seek assistance.
If social service agencies can't direct him to one, try the IRS.

--------------
Phil Marti, VITA Volunteer
Clarksburg, MD

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<< ------------------------------------------------------- >>
<< 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. >>
<< ------------------------------------------------------- >>