Discussion:W-2 and 1099 from employer
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Discussion Forum Index --> Tax Questions --> W-2 and 1099 from employer
| 15 March 2007 | |
| We have a client who received both a 1099-misc and a W-2 from the same employer in 2006. Apparantly during the year the employer decided to stop paying payroll and opted to pay them as independent contractors (despite my clients objections). The 1099 payments were done for a brief period. The employer then resumed payroll and withholdings.
In this case, my client was clearly not an indepedent contractor. The problem I have is reporting the 1099 on her return. I believe she owes income tax on the income, and arguably the employee portion of the soc sec and medicare. But I do not believe she owes the matching part that would be due if I report her as self employed. My question is how can I report this and not double her fica taxes? | |
Whitelightningjnc (talk|edits) said: | March 15, 2007 |
| Was the employer justified in characterizing her as an independant contractor? If not, I would think he would still be liable for paying his portion of the SS and Medicare, regardless of how she's being characterized. If the employer were to get audited and he was not justified in making her an independant contractor, he would still be liable for the taxes. Any chance she could report him to the proper authorities? Just a thought. | |
| 15 March 2007 | |
| Why wait for the employer to get audited? Fill out the IRS form and turn it in separate of the client's tax return. The client certainly has the right to ask the IRS to decide whether he is an employee....why do these people always wait until the tax season...to bring up these issues taxea | |
| 15 March 2007 | |
| The employer was clearly not justified in characterizing her as an independent contractor. She was an employer until about Sept, then shitched to a 1099 for Oct & Nov, then back to employee. Same job, same duties, etc. The employer didn't want to withhold or pay the payroll taxes. | |
| 15 March 2007 | |
| Taxea - She was fighting with them to get it changed. They refused, and eventually would not answer her calls. The swithch over and back occured late in the year.
The problem is how to report it. It is not fair for her to pay the matching soc sec & mcre. She was an employee and got the same rate of pay when she was an employee and when she was a 1099. | |
| 15 March 2007 | |
| Correction to my prior post, she was an employee (not an employer) Sorry | |
Death&Taxes (talk|edits) said: | 15 March 2007 |
| Read Discussion: 1099-Misc and form 4137 especially the points raised by Ex-IRS far down the page. Also do a search on Form 4137. You are not alone. | |
| 15 March 2007 | |
| Thanks for the input.
I was considering using Form {{{name}}} (pdf) and reporting the income as line 21 other income. I do not believe there is much dispute in this case that she was an employee. She was a w-2 for about nine months, then a 1099 for two, then back to a w-2. Same employer, same job, same location, same duties, same rate of pay. I think the employer simply did not want to be bothered with withholding and paying payroll taxes. She did dispute the change to a 1099 when it happened with the employer. In Discussion: 1099-Misc and form 4137, many good points were discussed. Thanks for the help | |
| 21 June 2008 | |
| If the employee signs a statement to be responsible for their own taxes can you treat any person as a 1099?
Neil | |
| 26 June 2008 | |
| I would have your client ask the employer why just a "2 month" switch? Do you believe that the employer switched back because she made a fuss about it (and rightly so). If the business is experiencing cashflow problems that may be some of the answer - may be that the employer needed cash to pay previous Form 941 balances. Many employers don't fully comprehend the record keeping required when payroll taxes are concerned - if you are not a stickler for details and dates hire a payroll company (the IRS takes this area of the code very seriously). | |
