Under
IRS Rev. Rul. 2004-109, a signing bonus should be reported as wages.
If
you received a signing bonus but it was not on Form W-2, Form 8919 is used to
report wage income that was incorrectly reported on Form 1099 or not reported.
It will require you to pay FICA and Medicare taxes on the payments (remember -
you would have paid them anyway) but not the matching employer share. You will
also have to prepare Form SS-8 (a request for determination on employee vs.
contractor status) unless your company considers you an employee for other
purposes and sends you a Form W-2. Form SS-8 is not an easy form to fill out.
You
will probably also upset your employer, because the IRS may contact him about
whether or not he paid wages.
If
this is a bonus, car allowance or other amounts paid to you on Form 1099 and
you already receive a Form W-2 from your company, you should use Reason Code H.
(Sometimes,
the easiest solution is to just report it as self-employment income and pay
self-employment tax on it. Even if reported as wages, you would still also have
to pay the employee’s portion of social security and Medicare. )
