Filed Statutory Employee by mistake

[Frj10151015]

My taxes were filed and accepted as a statutory employee and this was a mistake.  What will happen when IRS finds that I am not a statutory employee?  Should I amend now?

[KrisD15]

It won't matter unless you filed a schedule C. 

If you did file a schedule C and claimed expenses, yes you will need to file an amended return but you need to wait until the original return has been processed. 

You have 3 years from the date you filed your return (or 2 years after you paid the tax due, whichever is later) to file an amended return.

Please click here for how to amend a return you already filed

[Frj10151015]

I didn’t file a schedule C or claimed any expenses.  I noticed that my refund showed more than normally so I went back to check but by then it was already accepted.  Will IRS correct that?

[AnnetteB6]

As stated by KrisD15, if you only checked the statutory employee box by mistake, there is nothing more you need to do.  The IRS will disregard the checked box since no Schedule C is included with the return.  No amended return is required.

@Frj10151015

[Frj10151015]

Thank you but I saw it generated a form 8995.  Is this the schedule C? Do I need to amend.  I’m worried.

[AnnetteB6]

No, Schedule C says 'Profit or Loss from Business' at the top of the form.  

An amended return should not be necessary to correct the box that was checked on your W-2, but if you feel better going through the process to amend your return to see what would change, take a look at the instructions in the TurboTax article below.  The amended Form 1040X has not yet been released, but when it is available, the article below will update with instructions.

How do I amend my 2020 return?

@Frj10151015

[Tdb0202]

I just did the exact same thing. I’m a car salesman and get paid commission I get a W2. I accidentally clicked I was a statutory employee as well. My refund went from 7k to like 13k.   Within 45 min the irs already accepted my return.  Will they fix this ? Do I have to file an amended return ? Will my direct deposit go through? After I filed I clicked to view my return. It said it had my w-2 and some 8995 form. That’s it. 

[MaryK4]

If you are not a statutory employee, you will need to amend your return to correct this.  The IRS will process the return you efiled and issue you a refund.  However, when you file the amended return, you will have to pay the correct taxes you owe.  If you do not have the amended return completed before the April 18th due date, you will want to make a payment (Pay Online) to the IRS for the taxes you will owe.

@Tdb0202

[Tdb0202]

Ok so I’ll get the 13k direct deposited and just have to go and do an amended return and pay money back ? I didn’t file a scheduled C or anything so some had said the IRS will fix it themselves.  Wasn’t sure.  I don’t mind paying money back I just wanted to at least get some of my return here soon. Thank you for any input 

[KrisD15]

The IRS might correct it and send you an adjusted refund with a letter of explanation. 

If that does happen, you have the option of accepting their opinion, or contesting it. 

The letter will explain your options

The IRS might NOT correct it right off the bat and send you the refund. They may find the error later and then send you a letter demanding repayment.

You might want to keep your eyes on your bank account. IF the inflated refund is paid, be sure to return the excess before April 18th to avoid added interest. If the IRS sends you the proper refund, you won't need to do an amended return. 

Keep all IRS correspondence with your tax files. 

[Tdb0202]

So I’ve been checking the where’s my refund daily to see what they do.  As always I put my last 4 in. Single and the inflated return number. Every day it has shown that it was accepted but was not approved yet.  

I went to check it today and now when I put my info in it says I’m putting the wrong info in which I’m not. 

does this mean the irs fixed it and I’ll get my actual true return in 21 days and they will send me a letter explaining ? 

[KrisD15]

We can not say at this time. It may be the IRS changed something or you tried the site while your information was being updated. 

I would suggest you look over your return. 

If you did not file a Schedule C, there should not be a needed adjustment. 

You posted a jump from 7,000 to 13,000, which is 6,000.

For clarification, 

Are you sure this increase was not due to something else? You are filing single, but are you claiming any credits for dependents and/or education? 

[Tdb0202]

So I made $135,615 for the year. I file single and withhold at the highest rate so they always take the most out of my paychecks so I get a return. My return was around $7,770 before it asked me how I was paid and said I qualified for statutory employee ( which I don’t ). By the end my refund had jumped to almost $14,000. I did not file or produce a schedule c form. It did generate automatically a 8995 Form or whatever the number is.   30 min after I did my taxes I realized this. I tried to call and the IRS had already accepted it.  My last name starts with B.  I filed on the 24th of Jan. Everyday I’ve checked where’s my refund I was able to put the $13,700 number in and it just showed it had been accepted. 

I tried at 3 am this morning using same info as always and now it’s been saying all day my info is wrong. I called the IRS number and put the info in and it says my return is processing.  I just want to get my refund in 21 days like normal.  If they fix it and give me the right amount that’s great. If they give me the inflated amount. I’ll take 7-8,000 of that put it aside and contact them.  

I was told I shouldn’t have to file an amended return sense I didn’t produce a scheduled c form.  Not sure what’s going on but just wanna know. Thank you for all your input 

[Tdb0202]

Also I don’t have any dependents. I have no kids. I don’t donate to anything. I didn’t buy a house or anything. Etc 

[ThomasM125]

@Tbd0202 Filing as a statutory employee allows you to deduct business expenses on a schedule C. That could increase your refund if you entered your business expenses but otherwise it shouldn't affect anything. I suggest you print out your tax return and compare it with the previous year to see if anything looks off. If you find something that doesn't look right you can post a question about it here.