The Taxman Cometh
April 3, 2010 7:53 PM   Subscribe

In 2009, I made less than $9000 at my part-time job. Do I need to include this income when filing my taxes?

I know that no one here is my accountant (and that it might be crass to present my financial situation for all the world to see), but I am desperate for advice and confirmation of what I think I already know. I live in NY state, and in 2009 my overall income was a little less than $45,000. Most of this came from my primary job, but I did earn about $5500 from a part-time job. No federal taxes were taken out of these part-time wages, but I did pay $5.63 in state income tax, according to the W2. When I include earnings from this job, I end up owing $850.00 in federal taxes and $382 in state taxes. Ouch. If I don't include them, I am owed a refund of $11. Party-time! I am almost positive that I do have to include these wages when filing my taxes, but a coworker seems to think I do not. What does the hivemind think?

Oh, and I used TaxSlayer to calculate my taxes. Thanks in advance for any help!
posted by en el aire to Work & Money (17 answers total) 2 users marked this as a favorite
Did you get a w-2? If so, yes, you do. You do not legally have to claim anything under $600, though that might have changed, I haven't checked in a couple of years.

If you were paid under the table, that is up to you to decide. If you were given a 10-99, you have to pay taxes. Basically, anything that is reported to the government has to be paid on and if you signed tax papers, they were reported.
posted by TheBones at 7:56 PM on April 3, 2010

Tax returns have to include all income from all sources, subject only to defined exceptions. The fact that no withholdings were taken does not change that fact.
posted by yclipse at 7:58 PM on April 3, 2010 [2 favorites]

Yes, you have to include them.

No federal taxes were taken out of these part-time wages

And that's why you owe so much when you do include them.
posted by stopgap at 7:59 PM on April 3, 2010 [1 favorite]

If it's reported to the government (which it apparently was, since you have a W-2), you have to include this income. I am also curious as to why your coworker doesn't think you have to report it.

If you are still at this job, I might think about changing the withholding so that federal taxes are taken out. It would hurt less next April.
posted by bolognius maximus at 8:06 PM on April 3, 2010

If there was a W2 for the $9000, the government knows about that money, and they want taxes on it. What was withheld does not indicate what you owe.
posted by slow graffiti at 8:11 PM on April 3, 2010

What does the hivemind think?

It's not a matter of opinion; it's the law. Of course you have to pay taxes on those wages.
posted by halogen at 8:12 PM on April 3, 2010

Response by poster: Wow - quick responses! I did receive a W2, and everything was on the up & up - no money under the table. The reason I thought anything less than $9000 does not need to be filed is because this IRS pdf seems to suggest that if you are single and earned less than $9350, you do not have to file. Clearly, I did earn more than $9350, but my coworker suggested that it is per job, not combined income. It looks like I will have to come up with the $1300, though.
posted by en el aire at 8:13 PM on April 3, 2010

Did you get a w-2? If so, yes, you do.

Uh, you have to pay taxes on it regardless of whether or not you got a W2. Income is income.
posted by delmoi at 8:17 PM on April 3, 2010 [2 favorites]

Yes, you have to include all income when you do your taxes. Especially because you have a W-2, so there's a record of it tied to your SSN. You might have a decent chance of not getting caught had you not received a W-2 or 10-99 and thus been paid entirely under the table, but it would be really stupid not to include it in this situation.

You can look at it as a good thing if you want- yay! you had access to that money and the opportunity to earn interest on it, instead of giving the federal government the same opportunity!- but most people don't see it that way. If paying all at once is painful to you, you really should have the part-time employer fix your withholding so it doesn't happen again. I'm surprised they didn't to that to begin with if they are treating you as an employee and not a contractor (in which event you should have been paying estimated quarterly taxes, and would have received a 10-99 instead).
posted by charmedimsure at 8:19 PM on April 3, 2010

Best answer: Yeah, your coworker is confused; that's $9000 gross, not $9000 per W-2. To understand why he's definitely wrong: if you got ten W-2s, each for $9000 worth of income (unlikely but entirely possible; totally possible if we imagine they're 1099s), you wouldn't have a zero tax liability for the year (wouldn't you wish!). If that were true, people would be finding all sorts of ways to break their income up across multiple W-2s or 1099s. But it's not how it works so nobody bothers to do that.

Sorry, but it's time to pay the Man.
posted by Kadin2048 at 8:21 PM on April 3, 2010 [3 favorites]

Yes taxes need to be paid on it, and you'll have a $28 fee for not paying quarterly estimated taxes on independent contract (non-employee) income, in addition to the 15.30% social security tax on your $5500. Remember that Social Security comes before everything else and applies to every penny. 15.30% looks high to most employees, because their employer is paying half.

If you're still at this part time job, you need to look into 1040-ES, quarterly estimated social security taxes. It's like manual-withholdings. There may be an applicable state level thing too.
posted by fontophilic at 8:44 PM on April 3, 2010 [1 favorite]

Yes you have to pay them, and to that person who said you didn't have to report anything under $600 that was wrong too. You should technically include anything you make under $600 as well. The person paying you under $600 in a year just doesn't have to report it or give you a 1099, which is just a convenience issue for them. But the income still should be reported by the earner.
posted by thorny at 8:48 PM on April 3, 2010

Thorny is exactly right. Your part time employer is probably in trouble for not withholding income tax.
posted by gjc at 6:57 AM on April 4, 2010

Best answer: Yes you owe taxes on this money.

Yes taxes need to be paid on it, and you'll have a $28 fee for not paying quarterly estimated taxes on independent contract (non-employee) income

This is only true if you received a 1099 for the money not if you received a W-2 which is what you said you got. Yes you have to pay taxes on it. Yes it sucks that your employer didn't take taxes out. They may not be in trouble for this, however. They probably didn't because at your income level [9K/year] you wouldn't owe taxes or wouldn't owe much. However when it's combined with your income from your other job you're well over the income level where you need to pay tax. This is one of the crappy things about getting multiple W-2s. This was my life this year, I got something like five W-2s and ten 1099s. Kadin2048's explanation is exactly right. You can get a lot of small W-2s where the business doesn't have to withhold tax, but you the individual who receives a bunch of small chunks of money from individual places has the burden of paying taxes on all of it combined. Sorry about that.
posted by jessamyn at 7:53 AM on April 4, 2010 [2 favorites]

Best answer: Protip: Next year, do the math early so that you don't have to scrounge for money. The IRS has a withholding calculator that will give you a pretty good idea of how much you're going to owe. After you punch those numbers in, you can either adjust your withholding so that you won't owe any money, or you can set aside that much cash so you're ready when next year's tax forms roll around.
posted by chrisamiller at 8:33 AM on April 4, 2010 [1 favorite]

Response by poster: A great big thank you to everyone who took the time read and comment, even those who responded somewhat snarkily and made me feel stupid. I got exactly what I needed in more ways than one :)
posted by en el aire at 8:53 AM on April 5, 2010

This happens to me every year, except in my case my wife has the part-time job.

Here's a simple example:

I make a bunch of money, so I get taxed at something like 20% and by and large, my withholdings are correct ao that 20% is taking out of my check.

But, my wife will make something like $7k. That is so low, she pays practically 0% tax and her withholdings reflect that.

Well, when we do taxes, that $7k (with 0% withholding) gets put on top of my income (which has a 20% withholding. So, we end up owing money, because now I have to come up with the 20% that should have been withheld from my wife's checks, but wasn't.
posted by sideshow at 3:51 PM on April 6, 2010

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