The status of a worker as an independent contractor or an employee is important for federal income and employment taxes (think IRS and Social Security Administration).
Known as the Federal Data Services Hub, the project is taking the IRS's own records (for income and employment status) and centralizing them with information from Social Security (identity), Homeland Security (citizenship), Justice (criminal history), HHS (enrollment in entitlement programs and certain medical claims data) and state governments (residency).
In 1935 IBM landed a contract to tabulate employment for the Social Security system and put those dusty punch-card machines to work.
"When they can't fix the problems with the social security and the employment system, we need to have a safety net to capture the poor, " said Tadashi Yamamoto, professor of social security at Ritsumeikan University in Kyoto.
WSJ: Japan Welfare Case Stirs Debate on Who Should Care for Needy
In addition, he allegedly failed to pay Social Security and self-employment taxes when he worked for the International Monetary Fund.
Employers currently submit payments for withheld income and employment taxes through their banks to the U.S. Treasury without breaking out which portions of these payments are for employment (social security) taxes, income taxes and Medicare taxes.
Other reasons to file include when you own special taxes like the alternative minimum tax (AMT), household employment taxes, taxes on retirement accounts or Social Security and Medicare tax on tips you did not report to your employer or on wages from an employer who did not withhold those taxes.
FORBES: A Beginner's Guide To Taxes: Do I Have To File A Tax Return?
And that includes all of the taxes on employment, including employer paid social security charges.
FORBES: Why France's 75% Income Tax Rate Is Going To Be So Disastrous
Self-employment tax, sometimes called SE tax, is a tax consisting of Social Security and Medicare taxes for those who work for themselves.
Alistair Darling, a success at social security, has added employment to his brief in a new Ministry of Work and Pensions.
The failure to file and pay self-employment tax by self-employed individuals could cause them to be ineligible for social security retirement or disability benefits.
FORBES: Non-Filers Beware: Who's That Knocking at Your Door ?
Self-Employment tax (SE tax) is essentially where you are paying both the employER and the employEE portion of the Social Security withholding tax.
Social Security Secretary Alistair Darling said the aim of the scheme was to change the culture of employment and encourage firms to employ older people.
Owners of S corporations can reduce their overall tax bill by paying themselves a salary, subject to payroll taxes (Social Security and Medicare taxes), and then taking a dividend, which is distributed free of employment taxes (and, again, isn't subject to the corporate tax rate).
应用推荐