@mc013 wrote:
Thank you for your response - I assume the employer wanted it to be done this way. Is there any issues if I enter the information as it should have been a part of my W2 ? Just dont want to have any tax implications especially since that would go against my previous employer. With this said - if I enter 1099 NEC and don't have a business is there any other work around to enter my information into turbo tax. I am not a contractor and it was simply payment as severance after leaving my job. Much appreciated and thank you so very much !
If you report on form 8919, the IRS may investigate the employer, or at least send them a letter asking them to explain and to pay the half of social security and medicare tax that they owe. That's not on you, though. They have a responsibility to follow the law.
If you report as self-employment, you will need to upgrade to turbotax self-employed (more expensive version of the program) and pay 15% self-employment tax instead of 7.65% social security and medicare tax. You would create a business (use any code you like) and report the gross income with no deductions for expenses since you can't have deductible expenses when you are an employee.
Seriously, why pay double the SS and medicare tax when they aren't following the law?
