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Originally Posted by WindyCityMom  Ahh, thanks. We have never had to pay taxes at the end of the year since we don't make much. So basically, if you choose to be tax exempt, you have to pay what would have been witheld at tax time? Or am I completely off?
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No, if you DON'T choose tax exempt then at the end of the year you will (maybe) have to pay the taxes on what you made, since it didn't come out of that W-9 job, which should be the case for every individual in America, unless you're a corporation (or work certain govt jobs). Tax exempt means you're exempt (don't have to) pay income tax at the end of the year. But you can't just
choose to be tax exempt because you usually don't have to pay. (If you don't have to pay it's because you make too little, not because the government says you are free from all income taxes). Does that make sense?
Unless you are a corporation or a 501c3 or a bank, then DON'T check that box. If you're just a woman getting paid to do a job then don't check it. Basically, do you, as an individual, have a letter from the government saying you are exempt from paying income taxes? No? Then don't check it. Hope this helps.
(I'm not a CPA but I am an accountant and I deal w/ W-9's all day long. My company pays 20,000 people a year by W-9's and I get asked these questions all the time)
ETA: This is how taxes work at the end of the year simply: All the income you and your DH made is in one column (including what you make at this W-9 job) and then all the taxes that came out of your DH's job and any other job you had is in the other column. Then all of your deductions are listed. If your tax burden (what you should have paid) is more than what you did pay, then you owe money on April 15. If what you paid throughout the year is more than what you should have paid then you get a refund. If it equals out then you get no refund and you owe nothing. Your income from the W-9 is figured into the total income (if it's more than $400). That's how you might or might not have to pay taxes on it at the end of the year. If you were truly tax exempt (which you're not) then your income from this job would not count towards total income. Does that help? It's not like at the end of the year you'll definitely have to pay the taxes that should have been withheld, it just means that that income has to be figured in.
