New Grad - no taxes taken from pay

Multicollinearity, BSN, RN · Aug 5, 2010

Ask them if you will be receiving a 1099. Self-employed people receive 1099s instead of the W-form series. If you are receiving a W-2 then the following doesn't apply.

Self-employed people must pay all the regular taxes you are accustomed to - federal, state income taxes, social security, FICA, etc but they pay all these plus an additional tax. They have to pay self-employment tax which is the employee's/employer's share of social security/FICA. Self-employment tax is roughly 15%.

Self-employed people should make estimated quarterly payments to the IRS. I'd recommend you see an accountant or other tax person about this. I'd also be surprised if this status is to your benefit and if a nurse working as you describe actually meets the IRS criteria for being a self-employed worker. There are some employers who are making their workers self-employed 1099 status to shirk costs and shift them to their workers when they do not even meet the IRS criteria. I'd also guess you aren't covered by worker's comp if you are on a 1099 self-employed status. I sure wouldn't want to be doing the physical work in LTC and not be covered by worker's comp in the event something happened.

mamamerlee, LPN · Aug 5, 2010

This is nonsense - - did you sign paperwork stating you are strictly a contract worker? If the agency doesn't take your taxes out, ask them why. If they do it for their inhouse workers, they should be able to do it for you. Find another agency quick that will take care of your taxes - or you will be in a taxpayer's nightmare.

From your post, it doesn't seem that you were expecting to have to keep track of all of this. If you really want to stay with this agency, find a tax advisor NOW.

Best wishes!

passredskins1 · Aug 5, 2010

be careful with them NOT taking taxes b/c it could come back to haunt u. The IRS is tough...and they wont go away if they audit u..they can garnish your wages...enter your bank accounts..seize your possessions etc.

If u cant keep track of it...i suggest you go with an agency that takes out taxes or get a job as a staff nurse....its safer...and peace of mind come tax time.

I only made 20,000 part time in 2008 while i was in nursing school..and i got an audit letter for my 2007 taxes and i have them take out my taxes...so think about what could happen to you...

p/s...how can an employer say "i dont know" when asked about taxes...thats NOT a good sign...

Angeljho, MSN, NP · Aug 5, 2010

I know. I got scared when he said "I don't know" too. He did mention that I will get a 1099 form at the end of the year, but I'm not quite sure what that is. I signed a W-4 form with the LTC facility, and I barely know what that is. Does anyone know how can I put aside my taxes on my own?? How would I estimate it?

roser13, ASN, RN · Aug 5, 2010

Ask them if you will be receiving a 1099. Self-employed people receive 1099s instead of the W-form series. If you are receiving a W-2 then the following doesn't apply.
Self-employed people must pay all the regular taxes you are accustomed to - federal, state income taxes, social security, FICA, etc but they pay all these plus an additional tax. They have to pay self-employment tax which is the employee's/employer's share of social security/FICA. Self-employment tax is roughly 15%.
Self-employed people should make estimated quarterly payments to the IRS. I'd recommend you see an accountant or other tax person about this. I'd also be surprised if this status is to your benefit and if a nurse working as you describe actually meets the IRS criteria for being a self-employed worker. There are some employers who are making their workers self-employed 1099 status to shirk costs and shift them to their workers when they do not even meet the IRS criteria. I'd also guess you aren't covered by worker's comp if you are on a 1099 self-employed status. I sure wouldn't want to be doing the physical work in LTC and not be covered by worker's comp in the event something happened.

Please re-read this post. It is the absolute truth. Your situation is not just about saving some tax money back. There are many implications to being self-employed and you may need to reconsider your position.

Multicollinearity, BSN, RN · Aug 5, 2010

I know. I got scared when he said "I don't know" too. He did mention that I will get a 1099 form at the end of the year, but I'm not quite sure what that is. I signed a W-4 form with the LTC facility, and I barely know what that is. Does anyone know how can I put aside my taxes on my own?? How would I estimate it?

A 1099 form is a compensation form reported to the IRS for independent contractors/self-employed workers. I don't understand why you'd fill out a W-4 with the LTC facility when the agency is paying you on a 1099 (maybe workers comp data?). There's probably some reasonable explanation, but I have no idea.

You really need to see an accountant or tax person. FYI: When I was paid by 1099s in another field (not nursing), all of the taxes plus self-employment tax reduced my earnings by roughly 50%.

You really need to know the tax implications of this, workers comp status, etc.

Baloney Amputation, BSN, LPN, RN · Aug 5, 2010

I know. I got scared when he said "I don't know" too. He did mention that I will get a 1099 form at the end of the year, but I'm not quite sure what that is. I signed a W-4 form with the LTC facility, and I barely know what that is. Does anyone know how can I put aside my taxes on my own?? How would I estimate it?

http://www.irs.gov/faqs/faq/0,,id=199807,00.html will help you estimate your withholdings. However, if you are paying taxes appropriately for an independent contractor and you are subsequently found not to be an independent contractor on an IRS review of your job (because you met employee rather than IC criteria), I can't imagine you'd be in trouble, because you were paying taxes like you should have been all along. In that case your employer will be hurting something fierce, though. They will have to pay back taxes.

I recommend averaging your quarterly withholding amount so you can take out money out of each paycheck right away like you had never seen the money. Keep all your receipts for anything you buy for your job. I think you can claim mileage on your taxes (not on this positive, though), so keep tabs on that too.

bill4745, RN · Aug 5, 2010

I strongly suggest that you find another employer that makes you an emolyee and handles your tax withholding. The situation you are in now can become a real nightmare (been there, done that).

ADPIE10 · Aug 5, 2010

Call the local IRS and ask them what you should do. Even if someone on this forum has experience and offers some to you, many of us don't know about state taxes, etc. of your local state and municipality.

netglow, ASN, RN · Aug 5, 2010

Yes, OP. I was self-employed for many years... save all receipts.

But don't call your local IRS (are ya nuts?) But do find an accountant. You will need to get a handle on this early if you end up staying self employed. An accountant will get you on the right track to avoid penalties. You see you can do most of the tax part yourself once you are set up and understand it all.

rn undisclosed name · Aug 5, 2010

I do agency work and they take taxes out of my paycheck. You are an employee of the agency. Also, I believe an employer pays some portion of your SS or some other tax. If you are considered self employed I think you may also have to pay extra in taxes.

This is another topic, but, you're a new grad doing agency. I didn't think agencies hired new grads. I'd be afraid of doing agency work as a new grad. You really learn a lot in your first couple years of nursing that you don't have as a new grad.