Did I get Screwed??

...

If he sent you K1?
Is he an S Corp?

Well I never really had to worry about this stuff until now. I'm just trying to learn what this all means.

From your post it wasn't clear that he sent you any forms.
What did you get from him?
K1 as who?

I'm thinking he sent you K1 cause you insisted on getting taxed.
Did he failed taxes yet?

Ive recieved no forms ever from him. He said Ill get a K1 by Feb 15.

Dude. Tell him to forget it and that you now understand everything and tell him to not report you at all. Done.
He won't report you.
You don't want w2 or 1099 nothing. You are good.
But fucking call him, don't text him.
Just say that you now realize what's up.
And fucking forget it.
Don't ever insist on being taxed.

tax questions?
come to Veeky Forums! we will help you out, no worries

Will try and get ahold of him, but he didn't answer just now. My question though is could he benefit with his own taxes by having a partner that is responsible for a % of the income.?

He is an S Corp. Makes sense.
He can send you k1 but that's stupid, cause you are not a partner.
Contractor...possibly but that's 1099.
Ask him how many shares are you getting haha
Seriously though. Call him and tell him to just forget you.
You ain't a partner so no need for k1.
If he WANTS to report you, ask for 1099 as a contractor.
But tell him you are fine with no report. By VOICE, no text.

Will do this if he gets back to me. He's being a son of a bitch.

How many shares do you have in his Corp?
None.
So he can't send you a k1 and claim you as a person responsible for a part of company's profits.
Unless he signs you up as a partner and allocates shares.
He can send you k1.
If he does.
Ignore it.
Claim that you worked as contractor for him, since no partnership agreement, just claim as contractor income.
You don't have to have a form to claim it. It's his responsibility to issue a form.
You have no partnership agreement. So k1 doesn't apply.

You are the one insisting on getting taxed desu
Tell him that you won't accept k1 and file as a contractor....but it's ok if you don't have to.
Call from your friends phone so he picks up dude.
And tell him that you are cool. And to forget you.

irs won't go after him or you...we are not talking millions here.
For the future- if you want to be taxed so bad, make sure to sign an agreement before working. If you don't sign an agreement take the money and don't report it. Tadaaa

Thing is I had a conversation with him one time about if I was just getting straight cash and said I was cool with it. He responded with all this shit about 401k and being able to use deductibles, and I just trusted he knew what he was doing.

401k???
From what?
Again- WHAT did you sign? Before or during the job?
Does he have your SSN?

He was asking you if you are ok with NOT being taxed dude....
And you said you were.
And now you are not.
I don't know the dude you talking about and that 401k sounds weird in that context. So thats why Im asking what did you sign?

Exactly I have know idea about how the 401k tied in. Im sure at some point I had to give him my SS, but no I never signed any company stuff.

Then report nothing if you wont get a form or report a contractors work and the money you received if he sends you the k1.
You signed no partnership agreement so if IRS comes (which they won't) you are clean.
Keep the form that he sent you with your taxes, but claim contractors work.
And don't insist on being taxed the next time.
You don't have to file taxes btw...meaning if you don't file nothing happens, if you file and file it wrong then shit happens.
In your case it's irrelevant because the money we are talking about is nothing.
So wait for the form, but I guess you won't get one. If you do, keep it and report contractor work. Let him deal with irs

If you are not even sure if you gave him your SSN...then it's a simple thing- you signed nothing. He has your S SN, maybe he just found your number by accident?
In any case he has no way of establishing any partnership. For partnership you would have to sign a partnership agreement.
I can't just add a random person to be a part of my Corp and expect them to pay k1.....think about it.

I spoke with another buddy that worked with him in the past and said the owner (the guy were talking about) is an LLC and just gives us a small % shares like

LLC?
That makes no sense whatsoever.
I mean he can still issue k1 (by March 15 he needs to file taxes) but you would have to be an investor in his " fund "
He is treating k1 as a 1099 to some extent.
How can he just give you shares?
That all makes no sense.
When you get this form find a good CPA and go and pay for service.
I never heard of LLC issuing k1. Ever.

Also are you suggesting that regardless if he files me for sed small amount I should just ignore it and should be fine since honestly made maybe around 8k at the most with him. Ive had a couple other jobs with W2 last year that I paid in already anyways too.

There are NO SHARES in LLC btw.
He has to be an S Corp.
He can have llc in the name but there are no shares, just memebers....and again you are not a member and you are not a partner.
I have no idea what this guy is doing but for sure he ain't an LLC if we are talking shares.

He's about 50 and has an MBA and has a lot of experience being his own business owner. My gut says he's taking advantage of the system the best he can, and i honestly don't care so long as I aint getting messed with.

It depends:
If he claims a loss for his Corp you may be better off with k1- because you will be able to write off that loss.
If he claims some stupid income then file as contractor.
It's all super weird because if he is llc then there are no shares, he has to be an S Corp and have llc in name only.
So when and if you get the form seriously talk to a CPA because you may be better off claiming k1 than 1099.
But you can just claim 1099 as you signed no shareholder agreements or membership in llc or investment in a fund.

I'm saying go to a CPA to figure out what's best for you.
I wouldn't accept a k1 at all and argue that I'm no shareholder if I was you.
Because if you are a shareholder in a company, you are a shareholder for life or till you sell the shares.
Oh I get it now.
He claims you as an investor in the shares and your work is an equivalent of x amount of shares.
Go to a CPA, but I wouldn't accept it if I was you.

Ill do this once I get the form. If something is fishy, I feel I have the upper hand because I never did sign anything. I doubt I'd get audit but if he did I take it they'd end up looking at me next? I appreciate all your response man! I guess Ill just have to wait and see what comes of it.

You never signed a shareholder agreement or a partnership.
He may be counting on your lack of knowledge etc.
You are in the clear.
Again- he can't just add you as a partner or shareholder or whatever if you never agreed to that.
I mean, think about it- I have S Corp, I find your ssn and really want to fuck up your life, I'm naming you as a shareholder of my Corp(49% of shares) and then file for bancrupcy.
And what? Now you are screwed?
No because you had no idea that you were a shareholder in a first place.
You never signed anything so....I can't do it.
Makes sense?

Totally makes sense. He definitely is counting on the lack of knowledge. Although most likely like you said, my work=the amount of shares and Ill only be taxed on the amount of money I did actually make.

Hopefully even less, will have to see what he puts on the K1.

Even if they will audit him, you are in the clear. You have no signed document saying that you have anything to do with his company.
They won't audit you because you'll claim contractors work if he sends you the k1 form.
If anyone asks anything you just ask him to provide a document with your signature agreeing to being some kind of partner or a document agreeing to hold any shares of his Corp.
Also he claims to be an LLC and issue shares?
Nope. Not possible.

But hypothetically if he does file me and just assumes Ill file my shares, BUT I don't do anything. Is one of us sure to run into some sort of trouble.?

He can claim that your work =shares
But you NEVER agreed to that. So he can kiss your ass, you may consider agreeing to that, but I would be really careful about that.

Can you explain "Contract work" how does tax work on such work? Was meaning to ask you that.

Not with the money we are talking about. It would be on him though, not you.
He files the forced shareholder k1
You file as a contractor, and not shareholder
IRS goes: what the fuck?
They go to him and say: your shareholder just filed as a contractor, why?
He says: oh we agreed that his work =shares
IRS: where is the contract?
Him: ekhm...ugh...
Irs comes to you: we see you filed your taxes like a good boy, but we are seeing that instead filing the k1 you filed under 1099.
You: I did work as a contractor for the dude, got paid (bank account detail), paid my share of taxes, as a contractor and that's it.
Irs: but he says you are a shareholder.
You: where is a contract? I never talked to him about any shares. I waited for 1099 from him but never received one so I just filled it myself...
Irs: the s Corp guy is fucking with us...lets see what else is he doing wrong.

I'm not exactly sure, as I don't use contractors work, but it's a simple 1099 form that is filed in this case.
It's not a salaried person but a person that is working on a specific task for an agreed price.
For you, it doesn't matter I think. It's still a regular thing that counts towards your total income and you pay according to your bracket.

Good to know!! My bank account definitely won't lie. Can I wait till I see what the K1 says (Feb 15) before I file as a contractor? I don't know how long of a process this all can be

Don't file till you get that form.
Again- apply for an extension if you have to. They are automatic and it will give you time.
If you won't get that form by March 15, don't even bother reporting that income cause he didn't report you at all.
He has till March 15 to file his taxes.
You will get an extension till may easy.
Makes sense?

Absolutely! Thanks for all the help brother :)
Everything is making sense to me now haha

Kk. Glad to help :)