Help employer lied

[Bailey2112]

• Went to work for a small family owned construction business forn about2 months and was supposed to be w2 and instead got a 1099nec , and im not sure how to handle this, the company even printed out the w4 and a4 forms but they said oh we dontnhave nothin on file. Any advice is appreciated thanksn

[Vanessa A]

You can file for SS-8 and let the IRS determine your employment status.  If they had behavior and financial control over your employment, then you should have received a W-2 instead of a 1099.  Did they give you paystubs showing taxes withheld?

In the meantime, to report your income, you will need to enter your income by selecting the following:

• Income
• Show More next to Less Common Income
• Start next to Misc Income
• Start next Other income not already reported on a form W-2 or Form 1099
• YEs to did you receive any other wages
• Continue through to did you earn any other wages and answer yes
• Select employee compensation that was not reported on a W-2
• Hit continue
• Report your wages and select I received a 1099-Misc for this income use reason code H

Myths About Misclassification

S

[Bailey2112]

Do i do this before i file or after?

I  mean yea its on me for not seeing it on my stubs but it was a weird situation because i first started employment a 1099 in warehouse/reciievin as a temp postion but after being there 2 weeks and working 40 hrs each week, doing w.e  they asked or needed they came to me and asked what are you willing to do for hours to which i answered, ill do anything to keep working. It was at this point we talked about terms of employment and goin from a 1099 to w2 and pay rate, printed out said forms and i turned in.  When i emailed them with this all they simply replied well were you getting deductions taken out?  

Like One day before we went to lunch they came to me with a company shirt telling me i had to change shirts when we went out,  i was made toclock in and out everyday as well for my lunches only being alotted an hour max lunches, anytime i was out the ODB would give me **bleep** about it asking me oh you must not have anything to work on , the guy even tried totalling up my smoke breaks and how i was taking an hour or so total in smoke breaks each day and i was moving ,that doesnt really sound like an independent contractor to me.

[Bailey2112]

I rememebr one meeting we had , a IRA/401k guy came to talk about what the company would mactch , so i went an talked to the company bookkeeper about it afterwards to inquire about it more.. why wouldn i partake in the meeting if  i wasnt eligible for benifiets and further why would i inquire more about it then?

[DianeW777]

Yes, you do this with the return you file.  Do not wait until after your file a return with the 1099-NEC.

You can file as though you received a W-2, but may have to file by mail if you do not have the employer identification number (EIN) of your employer (should be on the 1099-NEC). Complete the steps indicated above by @Vanessa A (entered below for your convenience. The IRS will go back to your employer for their share.  

1. Scroll to Less Common Income
2. Start next to Miscellaneous Income 
3. Start next Other income not already reported on a form W-2 or Form 1099
4. Yes to did you receive any other wages
5. Continue through to Did you earn any other wages? and answer Yes
6. Select Employee compensation that was not reported on a W-2
7. Continue > Report your wages and select I received a 1099-Misc for this income use reason code H

This will report your wages and you will also see the information for the SS-8 along the way. You will pay only the employee share of social security and medicare taxes. Form 8919 will be included with your return, see the link below.

• What if Form 8919: Uncollected Social Security and Medicare Tax on Wages?

                                

               

[Bailey2112]

Okay ill get to that this mornin then . 

Also Vanessa mentioned that i shoud have been a w2 employee if they had behavioral and financial control over me  > financial control meaning what? Like when i needed something like supplies or materials in order to complte my tasks/work?

[Vanessa A]

Yes, and more.  If the company paid for the supplies and materials you used to do your job, or if they paid you an hourly wage that they determined and you did not charge them then they would have financial control. 

 Think of the difference between a plumber who works for themselves and one that is an employee.  Generally, the employee will be driving a company van that the company paid for and using tools that the company paid for. The company will also set the employees schedule and dictate what jobs they can and cannot do or what behaviors are allowed on work premises or in the company vehicle. When you are working as an employee, the company gets to choose more of what you do and how and the company invests into the equipment used. The company bear the financial burden of materials, supplies, tools, etc. 

 The self-employed plumber will have decide how much to charge the customer, they will decide what jobs they want to do and don't want to do, they will be responsible for paying for the van and equipment.  Being self-employed, you bear the financial burden of supplies, materials, tools, equipment, but you also choose your schedule and choose what jobs you do and don't do. 

[Bailey2112]

Ok so it sounds like i def was suppused to be classified w2. 

I have one more question when i go to file my taxes and do the steps mentioned will i have to pay on those? Cuz iwsd filling it out but stopped because after i put in the 1099nec i went from getting money back to owing lile half.

[BrittanyS]

When you go through the steps above, you will pay the employee portion of Social Security, Medicare Tax, and the federal income tax owed.  Since they reported your income on a 1099-NEC, there was $0 tax withheld.  If the employer relationship exist then they are responsible for half of the Social Security and Medicare Tax but since you did not have any withholdings through the year as a normal W-2 worker would, you will be required to pay that amount when you file your return at the end of the year.  

According to the IRS, "The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, or 12.4% total. The current rate for Medicare is 1.45% for the employer and 1.45% for the employee, or 2.9% total. Refer to Publication 15 (Circular E), Employer's Tax Guide for more information."

For more information, see the link below:

• Social Security and Medicare Tax

@Bailey2112 

[Bailey2112]

Will i get that back then if they determine i ahoudve been w2? Cuz right now times are really hard financially like i have 20 bucks to my name and thats it

[ThomasM125]

No. You would have to pay in your share of social security and Medicare taxes, which are 7.65% of your gross earnings. You won't get credit for any income taxes withheld, since that was not done. If you report the earnings as self-employment income, you can deduct associated expenses, but your self-employment tax will be closer to 15% of your net earnings after you deduct your expenses. So, unless your business expenses are more than your earnings, you will be paying in taxes on the income you earned. 

[Bailey2112]

Well wait .. so then wats the point of going thru and doin all this if im still responsible for the taxes and be on the line for it?  my main reason im even going about all this is cuz theyre sayin i owe on the taxes when i shouldve have and was suppused to be w2?

[SusanY1]

You want to go through with it because it would leave you responsible for only one-half of the payroll taxes, instead of all of them.  That could add up to significant savings for you in the end. 

Another thing to keep in mind is that you want to file your return by the deadline even if you cannot pay all of the tax.  You can request a payment plan for the tax due (TurboTax will walk you through it before filing).  While you will still have late payment penalties and some interest, those penalties are significantly less than the penalties for filing late.