Friday, April 28, 2006

A funny thing happened on the way to pay my taxes...

On the stereo: Steve Winwood, Roll With It, and Les McCann, On the Soul Side

Teehee. Sometimes a thing coming out of the blue is just so perfectly fitting that I laugh in pure glee.

I work for pay as an independent contractor for several different clients (and in several different capacities). Those clients are supposed to send me this thing called an IRS Form 1099 (non-employee compensation report) each year by the end of January. And being obedient corporations, they generally do just that.

Well, except for my major client, whose accountant always seems to take vacation from mid-January to mid-February. I don't mind their form reaching me late, as I don't want to file my taxes and send the IRS any money of mine until the last possible minute. (The downside to being a contractor is that you generally don't get a nice tax refund each spring the way a lot of wage slaves do. You usually end up paying a nice chunk like an independent contractor slave.)

Anyway, I didn't worry when this one client's 1099 didn't show up until the end of February. What shocked me, though, was that it showed an amount equal to only about half of what they actually paid me in 2005.

I realized pretty quickly what had occurred. Partway through last year, this client asked to pay me in a form other than the standard paycheck, shall we say. (Sorry, guys, nothing naughty or X-rated here.) No, he still pays me in dollar units, it's just that he does so through a vehicle other than a company check.

And for whatever reason, those payments didn't show up on his accountant's radar screen. And he's - well, not a detail-oriented kinda guy when it comes to money.

Grin.

So...with all the expense deductions I racked up, my business is going to end up showing a loss for 2005 on the tax forms.

And if they decide to audit me? Well, how am I to know what fiscal year ending date his company uses? I just assumed that any payments to me that they didn't report on this year's form would show up on next year's, of course.

But I sure hope it doesn't. I mean, c'mon - let the Outlaws win one now and again. Much more interesting that way.

0 Comments:

Post a Comment

<< Home