Get your taxes done using TurboTax

If you are a regular W-2 employee (not self-employed and not a "statutory employee" then all compensation for work performed, including bonuses, is supposed to be reported on your W-2, and your employer is supposed to withhold social security and medicare tax and pay their half of those taxes.  By using the 1099-MISC, the employer is (through ignorance or intention) trying to avoid their tax responsibilities.

 

When you enter the 1099-MISC in the Other Income section, there is a listing of special circumstances, check the box next to "this 1099 is for money from my employer that should have been included on my w-2."  Turbotax will calculate income tax and will also calculate that you owe 7.65% additional tax for social security and medicare tax.  (But you will not pay the extra 15% tax that you would pay if this was considered self-employment.). Turbotax will include a form 8919 with code H as part of your tax return that explains how this money was supposed to be on your W-2. 

 

(If you are a self-employed independent contractor and normally get a 1099-NEC, this is included as business income even though it was on a 1099-MISC instead, and you pay income tax and self-employment tax.)