Missing forms!

[fortresshoward]

Hello,

I'm trying to help my friend figure out this weird situation. She spent most of 2022 nannying for this lady she knows and she made about $19k the whole year. Her employer did not sign up for an EIC or anything, she did not give my friend a 1099-NEC or a W2. From my research, she should have gotten a W2 as she does not have much autonomy in her job and is a household employee. When my friend went to file her taxes, she didn't know what to do so she put her income in a 1099-MISC, but then her entire $6,000 refund disappeared! She ended up only getting a couple hundred back in a refund despite qualifying for several credits. She does not own or operate a real business so she should not be liable for 100% of the tax burden, it should be split between her and her employer. However, we aren't sure how to rectify the situation. Is it too late for her employer to give her a W2 for 2022? Is she just screwed? Help please!

[Cynthiad66]

Yes,  per IreneS, you should include your income as a nanny, even if you have not received a W-2 or 1099-MISC.  Just use your own records for the amount of income.

You can enter it as Miscellaneous Income, using these steps:

1. Click on Federal Taxes > Wages & Income  [If you're in TT Self-Employed:  Personal > Personal Income ]
2. In the Less Common Income section , click on the Start/Update box next to Miscellaneous Income, 1099-A, 1099-C. 
3. On the Let's Work on Any Miscellaneous Income screen, click the Start/Update box next to Other income not already reported on a Form W-2 or Form 1099. 
4. On the screen, Other Wages Received screen, mark the Yes radio button and click Continue. 
5. Enter the wages on the next screen, Wages Earned as a Household Employee. 

It depends on how you're paid and the type of year-end form you receive from the person or business that paid you.

If you're an employee:

• You received a W-2 from your employer (usually in January or early February)
• Your employer took Social Security and Medicare taxes (FICA) out of your paycheck each payday

If you’re an independent contractor:

• You received a 1099-NEC or 1099-MISC
• The payments you received were for the full amount you earned, nothing was deducted for FICA

If you're an independent contractor you're considered self-employed and responsible for reporting your earnings and paying your taxes directly to the IRS. You should report your net income or losses either on a Schedule C or as other income on Form 1040.

We’ll help you by asking you simple questions about your self employment income and filling out the right tax forms for you during your filing process.

It is a discussion between your friend whether she would like to be considered an employee or independent contractor.

[Opus 17]

Here’s the real problem for your friend. Even if the $19,000 was the only income she earned during the year, she would be responsible for about $600 of income taxes and $1400 of Social Security and Medicare taxes, which would have been automatically withheld from her paycheck if she was working for a traditional employer. She is still responsible for paying these taxes, even though she didn’t have withholding.  If the $19,000 nanny income was in addition to other income, or if she is married and her spouse has income, then she could owe as much as $6000 income tax on the money, plus the Social Security and Medicare tax.  Whether or not they were withheld during the year. And if she knew she  wasn’t having taxes withheld, she should have been setting something aside for the taxes. 

By using the procedure for household employee wages, TurboTax will assess her 7.65% Social Security tax plus whatever income taxes owed, but she would not pay the 15% self-employment tax which is what would happen if she reported her income as a small business or self employment.