W-9's What do I do?

Aaron Phillips · Posted: Sat Jan 05, 2008, 20:43 (GMT) Post subject: W-9's What do I do?

I mean, filling it out is pretty self explanatory I think. But I'm wondering if it means they're going to automatically withhold 28% of my check? Or if I provide my TIN, do they just send me the whole check and it's up to me to save the proper amount for when I file taxes down the line?

Thanks guys!

Scott Pollak · Posted: Sat Jan 05, 2008, 21:18 (GMT) Post subject:

They don't withhold on W-9s. That's so they can report what they paid you to the IRS. You're responsible for reporting it as well and paying your own estimated taxes on it.

Lee Gordon · Posted: Sat Jan 05, 2008, 21:21 (GMT) Post subject:

If you filled out a W-2 there would be taxes withheld. If you did a W-9, it's so they'll have the proper information to include when they prepare the Form 1099 they send you at tax time. They won't withhold anything. You'll need to report all your 1099 income on your Schedule C.
(I'm not an expert, just an experienced taxpayer. If I'm wrong about any of this, somebody please correct me.)

Colin Campbell · Posted: Sat Jan 05, 2008, 21:22 (GMT) Post subject:

Means you'll get a 1099 in January or February but usually only if it's over $600 for the year with that organization. If you get a 1099, it means the IRS knows you made that money. Make sure you report and attach any 1099's to your tax return or the revenuer will come a knockin'

J.S. Gilbert · Posted: Sat Jan 05, 2008, 21:30 (GMT) Post subject: distinction

Actually, any income is reportable regardless of the amount and I can tell you from personal experience that someone hiring you doesn't always coinsider earnings over $600 as a prerequisite to sending out a 1099 form. Assume it will be reported and you will be responsible for paying taxes on it.

Even if your hirer doesn't report that income for you, it is still your job and responsability to keep track of earnings and pay taxes on all of your earned income.

This is also different from working under a SAG or AFTRA union agreement where thetalent is actually considered an employee and taxes are taken out. Additionally when you work under a SAG or AFTRA agreement a certain amount also goes into the SAG or AFTRA health and pensions/ welfare funds for which one CAN become eligible. Just becuase you did the work and it was paid as part of your overall earnings, doesn't mean that you are entitled to it. With the unions, you musty in any calendar year earn a sufficient amount of money via that particualr union in order to qualify for health benefits. Miss out on the minimum earnings the next year and you lose your benefits (Well, you gedt to Cobra) You must also have aminmum of 5 years of minimal earnings to qualify for a small pension when you retire.

When you work non-union or fail to meet minimum earnings as a union talent, you are responsible for your own health insurance. Additionally if you work non-union, it is very wise to speak to a tax planner to make sure you understand what items might be tax deductable, what record keeping is required, whether you might have to pay estimated taxes, etc.

Lee Kanne · Posted: Sun Jan 06, 2008, 17:55 (GMT) Post subject:

The upside is you can deduct all your mileage and expenses incurred as an independent contractor...

office supplies, cell phone, internet, equipment and many more qualify...

J.S. Gilbert · Posted: Sun Jan 06, 2008, 18:11 (GMT) Post subject: Check with an accountant

Actually you can not deduct most of your mileage and gas. This is why it's always best to check with someone who is actually trained to dispense proper information. In most cases, IRS regulations do not permit individuals who work from home to claim the first trip from their home (say to a recording studio) or the last trip home. (This relates to indivduals who do not commute to regular work environments) There are lots of rules and regulations, so be very careful and again get yourself someone who knows tax law.

You might also be wanting to write off that space you've been using for recording, but unless it's dedicated space and you can verify that the space isn't used for family, or other purposes, you might wind up with an audit on your hands.

Also, with regards to income, there are a number of rules and regulations that can classify business as hobbies when they don't generate sufficient income, which can carry different guidelines, including a limitation on the nummber of years you can carry a negative cash flow. Then there's self employment tax, workers compensation, liability or other insurances.

It is a really, really good idea to go to a lecture, take a class through one of those adult ed programs or find a tax accountant that will met with you and advise you on specifics.

But then again, most of you won't even bother learning what the -10db switch on the microphone does, let alone the business or craft of voiceover, so why should this be any different.

Any accountants lurking that want to back me up here?

Lee Kanne · Posted: Sun Jan 06, 2008, 18:30 (GMT) Post subject: Re: Check with an accountant

J.S. Gilbert · Posted: Sun Jan 06, 2008, 19:06 (GMT) Post subject:

Lee,
I respectfully disagree that it is appropriate to make definitive statements on line that can lead to someone making bad decisions or in the case of some advice here, breaking the law or worse.

I offered a "clarification".

I believe the world is indeed a better place that you have decided not to get into rocket science. Attacking me for encouraging people to seek proper counsel merely backs up many of my previous statements.

as for arrogant, my credentials and contributions to the voiceover, advertising and gaming communites allows me the right be a little arrogant.

When the value of calling oneself a "voice actor" diminishes because the ease of entry into the field means that individuals with no preperation and little understanding of the industry are free to walk about and call themselves voice actors, I do what I can to uphold the value of the profession.

Being well informed and understanding potential pitfalls and how proper planning can mean the difference between success and failure are traits that one needs in any venture to succeed.

There is also a good deal of information on the internet about removing one's appendix, which also doesn't qualify as rocket science. At what point does one draw the line and make the determination to go to a professional?

Wouldn't you say that you're a bit arrogant for not accepting that my advice was sound and constructive?

Realize that this thread started with someone asking about a 1099 form, a relatively basic device.

Arlene Kahn · Posted: Sun Jan 06, 2008, 19:12 (GMT) Post subject:

There are a couple of resources you can check for the ins and outs of taxes for the entertainment industry. In Chicago there is a publication called PerformInk which runs a tax column by an accountant who has been doing entertainment taxes for years. He usually offers a deduction checklist you can request which he'll send you for free. Look for it on the web and read his columns and you'll get a whole lot of useful information. Backstage also runs tax columns and will provide probably all the information you'll need to prepare your taxes.

As far as the W-9 goes, whether you make $600 or not with a single client, you must report all income. I have never understood how people can claim that you don't need to report income not reported on a 1099 and here's why. The person paying the fee needs to account for that money. I can't imagine a business not deducting money paid to a vendor from their income base. So . . . if the client gets audited and has to explain the money they paid you and you didn't report it as income, you could be in for a huge hit of interest and penalties. Declare all income and save yourself headaches down the road.

Also, for a sole-proprietor, I'm not sure that workers comp insurance is necessary. It probably varies from jurisdiction to jurisdiction but if you're a sole proprietor I dont' see the need for it. For FICA there is a form in the federal tax book you fill out to figure out if you need to pay anything for FICA. Remember that 1/2 of the payment is a deduction at the end of the year.

As far as whether it's considered a hobby or career, my understanding is that you can claim a loss 2 out of 5 years without a problem. However, there are exceptions to this general rule which I read about last year. Again, the resources mentioned above will help you out.

As far as mileage deductions go, any driving done to obtain work (and I'm not talking about going to a studio once you have the booking) is most likely deductible. That means, driving to auditions, dropping off demos, etc. would be deductible.

I've been doing my own taxes for years. When I was working a full time job, I usually made deductions against my independent contractor income to zero them out without showing a loss. I have never had a problem. I learned the ins and outs from the columns in PerformInk and Backstage. Unless you have an extremely complicated financial picture, I don't see any reason why you wouldn't be able to do your taxes yourself.

Arlene Kahn

J.S. Gilbert · Posted: Sun Jan 06, 2008, 19:32 (GMT) Post subject: bye bye

Okay. I didn't say that anything was or wasn't deductible. I didn't say you can't do your taxes yourself. I suggested that it's wise to go and seek the knowledge.

I did not make a definitive statement that was egregious. And I offered advice that suggested you pay all of your taxes. I suggested you go seek professional assistance to determine appropriate action.

I didn't say workers comp was necessary, I listed it with other things as I suggested you go seek guidance.

I suppose no good deed does go unpunished.

My understanding is that If you work in an office and drive to work and then go to a gig and go back to your office and drive home, that the trip from your office to the gig has a deductible allowance, but not the one to your office and not the trip to your home. This may not be definitive. I suggest it as something to think about and ask a friggin person who has dedicated themselves to knowing this crap.

In any case you cannot deduct ALL OF YOUR MILEAGE. So excuse me for not wanting somebody to have to deal with an audit and/or pay penalties.

I am so friggin done with these forums.

Bite me.

You've won. I'm too tired.

Lee Kanne · Posted: Sun Jan 06, 2008, 19:44 (GMT) Post subject:

Lee Gordon · Posted: Sun Jan 06, 2008, 19:49 (GMT) Post subject: Re: Check with an accountant

Arlene Kahn · Posted: Sun Jan 06, 2008, 20:04 (GMT) Post subject:

J.S. You got awfully defensive very quickly. I do not believe I said you were wrong. As a matter of fact, I pretty much ignored the tone of your posting which always seem to veer toward the negative and nasty when people disagree with or challenge what you say (I'm sure many of you will disagree so no need to start attacking me, that's just my personal perception). As for biting you, I'll pass because I think you'd enjoy it a bit too much.

Lee -- I agree that the mileage issue can be confusing. The resources I mentioned in my previous post, columns in PerformInk and Backstage, provide pretty straight forward and easy-to-understand explanations about this whole issue from the perspective of accountants who deal with the entertainment industry on a regular basis. Trying to read the actual tax code will give all of us huge headaches. That being said, the status of income (W-2 or 1099) generally does not determine whether you can deduct business expenses. There is a provision in the tax code that if you earn less than a certain amount (I think it's $16,000 though I may be wrong), you can make acting business deductions from your W-2 income. This is one of the issues that is discussed annually by the tax columnists in the above publications.

Arlene Kahn

J.S. Gilbert · Posted: Sun Jan 06, 2008, 20:09 (GMT) Post subject: What are you all retarded?

I said I don't know. I suggest going to see someone who does know.

Now someone else who isn't quite sure wants to tell me I may be wrong.

What a bloody insane waste of time.

I can't be F***king wrong becuase I said I don't know.

If I don't know then I can't be wrong.

Go ask a damn accountant which is what I tried to say in the first place.

Isn't this thread done and over or some other helpful soul got something to say?

Tax laws change all the time by the way, so I suggest that "back when..." may have little bearing on todays's neo-facist rules and regs.

But then I didn't say anything except go ask a professional, who might be the chairman of a local accounting department in a school or someone who was dubbed knight by H and R Block.