Independent contractors and self-employed taxpayers may not have to worry about wage garnishments, but that doesn’t mean they entirely free from IRS collection actions. The IRS has many other collection powers at its disposal, so you’re better off resolving your tax problems through negotiation or settlement.
How Wage Garnishments Work
Employers handle the following tax matters for their employees:
- They withhold income taxes based on your W-4 allowances and send this money to the IRS.
- They withhold payroll taxes (Social Security and Medicare) and send it to the IRS.
- They pay their own portion of your payroll taxes.
It’s fairly simple for the IRS to ask your employer to send a larger portion of your pay directly to the IRS. This is how an IRS wage garnishment works, and your employer is obligated to obey the order.
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