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Old 06-30-2014, 03:05 PM
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1099 and local tax

Hello,

I've been working for the same company for the past 5 years. I'm an independant contractor who works from my home, has a "home office", and only really goes to the company's headquarters for meetings. It was my understanding that since I'm 1099 with a home office, I pay local (city) tax based on where I (my office) lives. However I just got a notice from the city where the company's headquarters is (I live in a suburb outside of it), saying I owe back taxes for the past 5 years. How could I possibly owe taxes on both where my home office is, and where the company who cuts my checks are? In fact theres a sub company that cuts half of my checks in an entirely different state - do i owe them too?

I called the city tax department (Columbus, Ohio) and asked them and she couldn't really tell me. Said something about "questions about somethnig on a Schedule C", and then transferred me to the guy whos handling my case. However he hasn't been available or returned my call yet, and this is causing quite the deal of anxiety for me as its a very large bill.

Please any advise would be great.

Thanks



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Old 07-01-2014, 03:21 AM
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Join Date: Oct 2010
Posts: 5,230
Quote:
Originally Posted by blackbyrd View Post
Hello,

I've been working for the same company for the past 5 years. I'm an independant contractor who works from my home, has a "home office", and only really goes to the company's headquarters for meetings. It was my understanding that since I'm 1099 with a home office, I pay local (city) tax based on where I (my office) lives. However I just got a notice from the city where the company's headquarters is (I live in a suburb outside of it), saying I owe back taxes for the past 5 years. How could I possibly owe taxes on both where my home office is, and where the company who cuts my checks are? In fact theres a sub company that cuts half of my checks in an entirely different state - do i owe them too?

I called the city tax department (Columbus, Ohio) and asked them and she couldn't really tell me. Said something about "questions about somethnig on a Schedule C", and then transferred me to the guy whos handling my case. However he hasn't been available or returned my call yet, and this is causing quite the deal of anxiety for me as its a very large bill.

Please any advise would be great.

Thanks
It was my understanding that since I'm 1099 with a home office, I pay local (city) tax based on where I (my office) lives.=========>Correct; as you're an independent contractor, you won't have any taxes withheld from your pay so your take-home pay will be substantially higher than that of a reg employee who earns a similar amount. However, self-employed workers still have to pay taxes, just like everyone else. And you don't have the luxury of waiting until April 15 to pay all of your taxes for the previous year – your state wants its money faster than that. So you have to pay tax on your estimated annual income in four payments, spread out over each year.


However I just got a notice from the city where the company's headquarters is (I live in a suburb outside of it), saying I owe back taxes for the past 5 years. How could I possibly owe taxes on both where my home office is, and where the company who cuts my checks are? In fact theres a sub company that cuts half of my checks in an entirely different state - do i owe them too?========>>>>>>I guess you may have to owe taxes to the local jurisdiction. you are still responsible for making sure that the taxes are paid on time. It is your responsibility to pay your city taxes. Even though you did not received a tax bill, it is your obligation to secure a tax bill and remit payment on time however, you , unless you worked in another state, do not owe tax to the other state.You need to contact the subsidiary in another state



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