Will the IRS garnish pay I receive through 1099 relationships?

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If you owe back taxes to the IRS, it is pretty safe to say that your money is in their sights. This means that they may garnish a 1099 subcontractor paycheck. The garnishment will apply to the total of what you received. Money that has not been earned yet cannot have garnishment holds placed on it unless you have finished the job and are expecting compensation for it. Garnishment will not apply to wages earned in the future.

The IRS can garnish your 1099 wages comparable to employees of that company. The difference is that a regular employee of the company would have a certain percentage garnished, not the entire check. In contrast, your 1099 can have 100% of the check garnished. It will depend on whether you owe the IRS more than the amount of the check. If it just so happens that you do, they will garnish the entire check.

The IRS issues 1099 garnishment orders for one paycheck at a time. Multiple assignments on a 1099 are possible if a creditor or child support agency submits orders as well as the IRS. A regular employee garnishment will have that enforced until the IRS debt is repaid in full. In contrast, each 1099 paycheck needs to have its own submitted order that will reduce or take your paycheck.

The entire process depends on when the filing of the garnishment order occurs. If the company receives it after their pay cycle, you will probably get your entire check that pay period.

The business or person that pays you via 1099 is accountable for deducting the pay to remit it to the IRS or another creditor. If you received a garnishment and have questions, just call your Tampa Tax Attorney, Darrin Mish, at (813) 229-7100.

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