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1099 and withholding California

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  • 1099 and withholding California

    If you are receiving a 1099 for work as a contract employee, can you also be subject to having wages withheld?

  • #2
    If you are legitimately classified as an independent contractor and get a 1099, your pay is between you and the company you work for.

    What wages are they withholding and why?
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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    • #3
      I am subcontracting and they are stating that they wish to withhold 30% of my earnings for taxes, but then they are planning to 1099 me. Is this actually legal? If they withhold the taxes, aren't they liable to make the payments to the IRS? How can they withhold and then turn around and 1099 me, leaving me liable for payment to the IRS on my own?

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      • #4
        Bagelsmom: How can they withhold and then turn around and 1099 me...

        It is called back-up withholding - and the IRS required rate is 28% not 30%. However, if you furnish your employer with a properly-completed W-9 Form http://www.irs.gov/pub/irs-pdf/fw9.pdf, certifying that you are not subject to back-up withholdings, this should solve your problem.
        Barry S. Phillips, CPA
        www.BarryPhillips.com

        IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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