Sign Language Interpreter Taxes: Staff vs. Contract
Sign language interpreter taxes can vary depending on your employment status. Whether you are a contract or staff interpreter will vary how you handle and pay your taxes. Additionally, the tax forms you fill out at the beginning of your employment and the process by which you file taxes will be determined by your employment type (staff or contract). (Also see Medical Staff Sign Language Interpreter.)
Forms
Sign language interpreter taxes should be considered at the time you begin work with a company. If you are a contract sign language interpreter you will fill out a tax form called a W-9. At the end of the year you will receive a 1099 tax form.
As an employee or staff sign language interpreter, you will fill out the W-4 and I-9 tax forms. Then you will receive a W-2 tax form at the end of the year.
Contract Sign Language Interpreter Taxes
As a contract interpreter/1099 employee, you will need to estimate roughly 15% of your income to pay your annual taxes. Additionally, consider out-of-pocket expenses such as healthcare, life insurance, and certification/licensure renewal. On your 1099, the total of the money paid to you for the year will be in a lump sum. For example, if you billed an hourly rate for hours worked and mileage driven, all of your payments and mileage reimbursements will total into one number on your 1099. Mileage and hourly rates should be handled differently on your taxes. So it will be your responsibility to separate out your hourly wage, mileage, and other reimbursements, such as parking. If you do not separate expenses, they will be included in your earned income and thus taxed. Since reimbursements are generally not taxed, you will want to guarantee you have properly reported them at tax time to avoid paying more taxes then required. You may also be required to pay or make tax deposits on a quarterly basis verses waiting until the end of the year to pay a lump sum.
Employee/Staff Sign Language Interpreter Taxes
For employee or staff interpreters, when you receive your W-2, all of your reimbursed mileage and business expenses should be separated out for filing purposes. If not separated, be sure to contact your employer ASAP.
When should you receive your forms?
The law requires that employers mail 1099’s and W-2’s by January 31st, with the goal of you, the recipient, receiving them no later than February 2nd. If you have not received your 1099 or W-2 by February 2nd, follow up immediately with the company. If you do not receive an adequate or timely response, you may want to consider filing a complaint with the IRS and/or consider no longer working for the firm in the New Year. Ultimately, you are responsible for your tax forms. So regardless if the company is delinquent, you will be liable.
If you file without all your forms, you will likely need to redo or amend your tax paperwork. This would cause additional effort/time/money, and you may potentially be penalized. In the worst cases, these types of errors could leave you open to an audit; which will cost you more money, time, and stress.
Tax Forms Are Ready
Once you have received your 1099 or W-2, then you are ready to file. Be sure to verify all the information on the 1099 and W-2 is correct, such as your social security number, address, amount earned, and reimbursements. Tax time is a busy time for everyone, including businesses. Be sure to report any errors ASAP so the company can review the potential errors and if necessary send you updated form(s) in a timely manner. Best of luck!
NOTE: MT&A is not a certified public accountant (CPA), or a tax attorney. All information herein is for informational purpose only, and this article is not a replacement for advice from an expert. Seek guidance from a qualified expert to advise you regarding your individual needs.
Additional Resources:
IRS: Independent Contractor or Employee?
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