W2 within Personal Business

[CATmitchell]

I am working on 2025 taxes and realize our taxes have become complicated. I am specifically wanting to find out if there is a way to do the following:

> I am working at home as an independent contractor

> I receive a W2 (not a 1099).

> I created a business profile for it but many if not all of my business expense are being kicked out as not deductible because within TT - this business shows no income because the W2 is not connected to the business profile. These are legit expenses like home office, some equipment  etc. 

Is this a flaw? Is there another way to accomplish this? I am somewhat confused......

[VolvoGirl]

Is the W2 for a different business than your independent contractor?  If you got a W2 you are an employee,  not self employed. Or did you change during the year?  

[CATmitchell]

I'm afraid I am "screwed" on this. I am an independent contractor - flexible hours/days etc and working remotely from home. Started in May 2025. BUT they pay and report on W2 and I had them withhold taxes. Its complicated. I am retired and draw SS too so I've kind of done this to myself.

I wanted to claim home office space, and some other expenses but since the $40k I eared is not connected - TT says I cant claim it. ugh.

I thought breifly about claiming it as 1099 but thats a sure way to trigger an audit...

[LeticiaF1]

If the company reported your income on a Form W2, then you are considered as an employee and not an independent contractor.  You will not be able to claim your work expenses.   Even if you consider yourself as self employed the IRS will not.  

You could complete a Form SS-8 to have the IRS determine if you are an employee or an independent contractor. Once you complete the form, the iRS will request the company you work for to provide their version of the SS-8. 

@CATmitchell 

[CATmitchell]

Thanks - I looked over the SS-8. Pretty sure I would fit the definition of independent. Literally the only role they play is connecting workers like me to the corporation and paying us directly ( my employer is just a middle man that can provide worker like me). We turn in a Timesheet and they pay every 2 weeks- nothing else. All work is directed by another one of the independent contractors. We do what we want when we want etc...I probably should have asked when I started work if they would/could pay by 1099 but I did not realize the implications. 

I'm not going to poke the bear at IRS with SS-8.....not worth opening the questions.....