I received a 1099 Misc from my employer. I was told this was a bonus (I'm a CNA). How do I handle this? Other income? Is it taxable to just Federal or do I have to pay SS and MC on it?
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Yes, it is other income. It is subject to Federal taxes, FICA and medicare taxes. You also have to pay the business share of the taxes also. So instead of paying 7.65% you have to pay 15.3% although you do get a small deduction for part of it.
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.)
@TLmusicman42 wrote:
Yes, it is other income. It is subject to Federal taxes, FICA and medicare taxes. You also have to pay the business share of the taxes also. So instead of paying 7.65% you have to pay 15.3% although you do get a small deduction for part of it.
No, it is not self-employment and not subject to 15% SE tax. See my other answer.
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