1099 and former employer

[zyxelenator]

Hi filling out taxes and little confused.

My wife worked as contractor for 7 month in  a year in 2017 for small company X. They got her transferred on W2 when 2018 calendar year started. Then we moved to a different state in May 2018. Once they heard that we are moving, they said we can keep you working remotely, but will need to keep you on 1099. She stayed with them on 1099 till May 2019. Turbo tax is asking is any 1099 work was performed for your former employer. Do it really need to be checked? If it technically was w2 only couple month back in 2018?

[Opus 17]

What tax year return are you trying to file?  If 2019, then in 2019 she was only an independent contractor, right?  So what's the problem?

[zyxelenator]

Correct, 2019 taxes. She also had w2 from current employer (Different company "B").

I believe Turbo Tax pointed somewhere that former  employer is the one you worked for in previous 3 years... and then switched to contractor/consultant type work, still performing similar duties.

My concern is, can I really count it as former employer, when in reality nothing changed in those couple month she was on w2 with Company "A". 

[Opus 17 · Accepted solution]

Don’t  get overly concerned by the test questions—the program asks them to try to determine whether 1099 income is self-employment income or miscellaneous other income.  Those questions are suggested by IRS documents but are not the only way of determining intent. Since you know this 1099 income is self-employment, just answer the questions in that direction.  In other words, yes it was intended to earn a profit, yes it was similar to her other job, yes she worked for the same client before.  You just want TurboTax to create a schedule C, and these test questions help the program decide whether or not to do that. The answers aren’t binding or forwarded to the IRS.