85
votes
Accepted
Possible customer wants me to handle payment to another contractor. Is this a scam or not?
100% scam. It's not your job to pay other contractors on behalf of the customer.
Ask yourself this: If the situation were reversed and the customer was saying he'd pay the other contractor, who ...
- 1,127
53
votes
Contractor wants client to open checking account
While a traditional checking account with the contractor's name on it sounds a bit off, it's not uncommon for private contractors to leverage a construction escrow account for larger projects like ...
- 69.1k
53
votes
Accepted
Do I need to pay taxes as a food delivery worker if I make less than $12,000 in a year?
Because you're self-employed and make more than $400, you'll need to file a federal return. If you make less than the standard deduction ($12,400 for a single person in 2020), you won't owe any income ...
- 15.7k
45
votes
Can a roofing company charge me more money for the cost of the roof 2.5 years after they were paid and job completed?
This could be a scam. This could be unrelated to the original project. It could be a continuation of the original series of events. Or at least that is what they want you to think. There is also a ...
- 136k
36
votes
Accepted
If I overpay estimated taxes in Q1, am I allowed to underpay in the other quarters?
Yes. In each quarter the penalty is based on a measurement of the taxes paid vs. the required taxes from January 1 to the end of the quarter in question.
As an extreme example, let's say your required ...
- 6,508
27
votes
Contractor wants client to open checking account
Scam. The contractor is trying to transfer liability onto you.
What makes a contractor accountable for getting the job done is the financial peril he faces if he does not. There's the hypothetical ...
26
votes
Possible customer wants me to handle payment to another contractor. Is this a scam or not?
There is no reasonable scenario where a customer can write one check but not two.
Even if they were on their very last check, they are just a few days away from ordering more.
It may not be a scam ...
- 47.2k
16
votes
Accepted
What happens to contractors when employer goes bankrupt?
1: no. You are among the rabble. Because you are a contractor, i.e. another business. This is part of the deal of being a contractor - you control your busienss and are responsible for your risk. And ...
- 11.6k
13
votes
Can a roofing company charge me more money for the cost of the roof 2.5 years after they were paid and job completed?
It sounds really fishy to me. I recommend looking up the company's contact information using Google and ask them about it. They may have no idea this is happening because whoever contacted you is a ...
- 329
12
votes
Hiring Foreign Contractors - Is This Tax Deductible?
Your premise is incorrect:
I believe if they were US based contractors I would need to send them a form to do my own deduction.
If it is a legitimate business expense, you can deduct it regardless ...
- 47.2k
11
votes
Contractor wants client to open checking account
TL;DR: No.
There is no legitimate reason for doing this. It's trying to replicate the invisibility of a cash job with the convenience of not having to lug around briefcases full of cash, with the ...
- 7,566
8
votes
Accepted
Mother wants me to "be a consultant" for her as way to save on income tax
In reality, I do help her every now and then with various bits (specific to her work, e.g.: translation, graphic design, software tutorials) but I would not think of it as consulting...
But you are ...
- 50.6k
7
votes
Accepted
Excess Social Security Witholdings
I wrote about the Social Security overlap when switching job a long time ago. Your situation is essentially the same.
Each employer is required to withhold FICA taxes to the full extent, and it doesn'...
- 166k
7
votes
W-2 contractor loopholes
To be clear, if you are receiving a W-2, you are an employee, not a self-employed contractor.
Before the new tax reform law, it was possible to deduct unreimbursed employee expenses. These were ...
- 115k
7
votes
What happens to contractors when employer goes bankrupt?
Exactly the same thing happened to me.
Short answer: Don't hold your breath waiting for the money.
Under US bankruptcy law, there is a long list of priorities for who gets paid first. Yes, "secured ...
- 22k
7
votes
Contractor wants client to open checking account
While I wouldn't do it it might not be a scam. Rather, it could be the contractor is attempting to hide money and doesn't want accounts in their name. Maybe the IRS is after them, maybe they have a ...
- 5,068
7
votes
Can a roofing company charge me more money for the cost of the roof 2.5 years after they were paid and job completed?
I found this article which seems very relevant:
The scam works like this: Contractors knock on doors offering to inspect homeowners’ roofs for storm damage. They say they can help get a roof ...
- 3,719
7
votes
Time limit on sending invoices in the United States
Is there some time limit to sending the invoice, such that it is
invalid and the recipient is not obligated to pay it?
Yes, there is. The term you are looking for is Statute of limitations.
Basically,...
- 221
6
votes
Accepted
Moonlighting as a software developer: employee or independent contractor w/ LLC?
I've been in a similar situation before. While contracting, sometimes the recruiting agency would allow me to choose between being a W2 employee or invoicing them via Corp-2-Corp. I already had a ...
- 47.2k
6
votes
Do I need to pay taxes as a food delivery worker if I make less than $12,000 in a year?
You got this gist of it. However, I don't see anyone mention the Earned Income Credit. I want to say you need to be at least 25, but am not 100% sure on that. https://www.irs.gov/credits-deductions/...
- 61
6
votes
Should a freelance programmer charge me for hours spent where a computer was running a script?
Would you have been happy had, say, the developer gone to bed or gone to a movie while the script ran? Even if the script was generating errors or causing the CPU on some machine to spike or causing ...
- 26.5k
5
votes
Accepted
Can money paid to an independent contractor be split among subcontractors as deductible business expenses?
You're a partnership. You should ask the money to be paid to the partnership. You'll have to fill partnership income tax return (form 1065) and each of you will get a K-1 schedule with your own ...
- 166k
5
votes
Excess Social Security Witholdings
They have to withhold.
When you file your taxes there is a line item to refund overpayment. Fairly trivial.
- 314
5
votes
Hiring Foreign Contractors - Is This Tax Deductible?
If you want to be extra sure, get them to sign a W8-BEN form and keep it on file. I have talked to the IRS about this, and they agreed it's generally unnecessary when dealing with a corporation but ...
- 768
5
votes
Independent contractors and new U.S. tax law
The new tax law provides a 20% deduction for income from pass-through entities (for next 8 years). So whether you keep operating as a sole-proprietor or establish an LLC,partnership, etc. you'll ...
- 69.1k
5
votes
Accepted
Do I need to exchange my EU income (Euros) to GBP to get taxed in the UK?
At some point you will be required to pay some taxes to HMRC. That bill will have to be paid in UK pounds.
That is the only exchange to pounds you will need (apart of course from anything you need to ...
- 33.1k
5
votes
Should a freelance programmer charge me for hours spent where a computer was running a script?
I work for a consulting company where this comes up fairly regularly. The litmus test for us is this:
Could the individual running the script reasonably go work on something else while the script runs&...
- 53k
5
votes
Does side-job with W-9 get listed as 2nd job in W-4 for new job?
You should use the W4 estimator to figure out how to fill your new W4.
Generally speaking, W4 is intended to instruct your employer how much to withhold, and you can check the "2nd job" ...
- 166k
4
votes
Accepted
Independent contractor rates for web development
First off, you should charge whatever you can charge, as @Dheer says in comments. However, that's really not on topic here.
What is on topic is how the 'contractor pay' compares to 'salary pay', and ...
- 35.7k
Only top scored, non community-wiki answers of a minimum length are eligible