Would a laborer who works for a contractor receives a weekly check but has to pay his own income tax out of this money be considered to be a subcontractor?

Answer 1

A self employed taxpayer. NO employer to withhold the social security and medicare taxes out of your gross pay before your net take home paycheck is issued to you.

As a self employed taxpayer you are required to file your 1040 income tax return reporting all of the self employment gross income even if you do not receive a 1099-MISC from the payer of the money or services or whatever items you receive in exchange for your labor.

If you are a self employed taxpayer then you are responsible for all of your own FICA self employment taxes of 15.3% plus any income taxes on your net profit from your business operation at your marginal tax rate.

You will need to report that income, and any related expenses, on Form 1040, Schedule C, Profit or Loss from the Business operation, or you may qualify to use Form 1040, Schedule C-EZ, TO determine your Net Profit from the Business operation. You will also need to use the Form 1040, Schedule SE, Self Employment Tax form to compute and report your social security and Medicare tax on the net profit from the business operation.

For instructions and forms go to the IRS.gov web site and use the search box for publication 334 a very good place to start with examples

Publication 463 Travel, Entertainment, Gift, and Car Expenses

Use the search box at the IRS.gov web site for Small Business and Self-Employed Tax Center

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