Solved: I worked in a liquor store and got a 1099-misc. Now they want expenses, etc info. There is none. Did I put it in wrong?
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I worked in a liquor store and got a 1099-misc. Now they want expenses, etc info. There is none. Did I put it in wrong?

 
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I worked in a liquor store and got a 1099-misc. Now they want expenses, etc info. There is none. Did I put it in wrong?

No, but you probably should have been paid as an employee, not as an Independent Contractor. See which sounds like your working conditions. If you think you are an employee, file Form 8919, (see below) and you will only be responsible for your portion of the SE taxes. If you decide for contractor, continue with your Schedule C.

Consequences of Misclassifying an Employee

Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes. Certain employers that can provide a reasonable basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes. See Publication 1976, Section 530  Employment Tax Relief Requirements for more information..

Workers who believe an employer  improperly classified  them as independent contractors can use  Form 8919  to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.

To better determine how to properly classify a worker, consider these three categories – Behavioral Control, Financial Control and Relationship of the Parties.

Behavioral Control:  A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Behavioral control categories are:

  • Type of instructions given, such as when and where to work, what tools to use or where to purchase supplies and services. Receiving the types of instructions in these examples may indicate a worker is an employee.
  • Degree of instruction, more detailed instructions may indicate that the worker is an employee.  Less detailed instructions reflects less control, indicating that the worker is more likely an independent contractor.
  • Evaluation systems to measure the details of how the work is done points to an employee. Evaluation systems measuring just the end result point to either an independent contractor or an employee.
  • Training a worker on how to do the job -- or periodic or on-going training about procedures and methods -- is strong evidence that the worker is an employee. Independent contractors ordinarily use their own methods.

Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker's job? Consider:

  • Significant investment in the equipment the worker uses in working for someone else.
  • Unreimbursed expenses, independent contractors are more likely to incur unreimbursed expenses than employees.
  • Opportunity for profit or loss is often an indicator of an independent contractor.
  • Services available to the market. Independent contractors are generally free to seek out business opportunities.
  • Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee.

Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:

  • Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status.
  • Benefits. Businesses providing employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay have employees. Businesses generally do not grant these benefits to independent contractors.
  • The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship.
  • Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company.

 From <https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation>

Where 8919

This information is entered in a different area of the program then regular W2s.  It is found under Federal (or Personal) Taxes-> Wages and Income -> Less Common Income -> Misc Income -> Other Income Not Already Reported on A Form W2 or Form 1099

The quickest way to get there is to use the search feature in the top right hand corner (magnifying glass icon).  

  • Search for "8919" and then click the jump to "8919" link (if you are just logging into your account, make sure you click the Take Me to My Return button before performing the search).
  • You will get sent to the Other Wages Received Page
  • You will click Yes and proceed until you get to Any Other Earned Income
  • Click Yes to this question because you have other income that should be on a W2
  • Leave check next to employee compensation that was not reported on a W2
  • Next screen will be Employee Compensation that was not reported on a W2
  • This screen will explain Form 8919 and SS-8.  TurboTax will prepare and file Form 8919 for you with your return, but you will need to file SS-8 on your own (link below - though looks like you already took care of this part)
  • Next screen will have to report your wage information
  • Next screen will remind you that a Form SS-8 is required
  • Next screen will ask if these wages were reported on a 1099MISC
  • That will be the end of this section (program interview may go on to ask about other less common income types)

 

 



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New Member

I worked in a liquor store and got a 1099-misc. Now they want expenses, etc info. There is none. Did I put it in wrong?

No, but you probably should have been paid as an employee, not as an Independent Contractor. See which sounds like your working conditions. If you think you are an employee, file Form 8919, (see below) and you will only be responsible for your portion of the SE taxes. If you decide for contractor, continue with your Schedule C.

Consequences of Misclassifying an Employee

Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes. Certain employers that can provide a reasonable basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes. See Publication 1976, Section 530  Employment Tax Relief Requirements for more information..

Workers who believe an employer  improperly classified  them as independent contractors can use  Form 8919  to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.

To better determine how to properly classify a worker, consider these three categories – Behavioral Control, Financial Control and Relationship of the Parties.

Behavioral Control:  A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Behavioral control categories are:

  • Type of instructions given, such as when and where to work, what tools to use or where to purchase supplies and services. Receiving the types of instructions in these examples may indicate a worker is an employee.
  • Degree of instruction, more detailed instructions may indicate that the worker is an employee.  Less detailed instructions reflects less control, indicating that the worker is more likely an independent contractor.
  • Evaluation systems to measure the details of how the work is done points to an employee. Evaluation systems measuring just the end result point to either an independent contractor or an employee.
  • Training a worker on how to do the job -- or periodic or on-going training about procedures and methods -- is strong evidence that the worker is an employee. Independent contractors ordinarily use their own methods.

Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker's job? Consider:

  • Significant investment in the equipment the worker uses in working for someone else.
  • Unreimbursed expenses, independent contractors are more likely to incur unreimbursed expenses than employees.
  • Opportunity for profit or loss is often an indicator of an independent contractor.
  • Services available to the market. Independent contractors are generally free to seek out business opportunities.
  • Method of payment. An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee.

Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:

  • Written contracts which describe the relationship the parties intend to create. Although a contract stating the worker is an employee or an independent contractor is not sufficient to determine the worker’s status.
  • Benefits. Businesses providing employee-type benefits, such as insurance, a pension plan, vacation pay or sick pay have employees. Businesses generally do not grant these benefits to independent contractors.
  • The permanency of the relationship is important. An expectation that the relationship will continue indefinitely, rather than for a specific project or period, is generally seen as evidence that the intent was to create an employer-employee relationship.
  • Services provided which are a key activity of the business. The extent to which services performed by the worker are seen as a key aspect of the regular business of the company.

 From <https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation>

Where 8919

This information is entered in a different area of the program then regular W2s.  It is found under Federal (or Personal) Taxes-> Wages and Income -> Less Common Income -> Misc Income -> Other Income Not Already Reported on A Form W2 or Form 1099

The quickest way to get there is to use the search feature in the top right hand corner (magnifying glass icon).  

  • Search for "8919" and then click the jump to "8919" link (if you are just logging into your account, make sure you click the Take Me to My Return button before performing the search).
  • You will get sent to the Other Wages Received Page
  • You will click Yes and proceed until you get to Any Other Earned Income
  • Click Yes to this question because you have other income that should be on a W2
  • Leave check next to employee compensation that was not reported on a W2
  • Next screen will be Employee Compensation that was not reported on a W2
  • This screen will explain Form 8919 and SS-8.  TurboTax will prepare and file Form 8919 for you with your return, but you will need to file SS-8 on your own (link below - though looks like you already took care of this part)
  • Next screen will have to report your wage information
  • Next screen will remind you that a Form SS-8 is required
  • Next screen will ask if these wages were reported on a 1099MISC
  • That will be the end of this section (program interview may go on to ask about other less common income types)

 

 



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