Independent contractor questions

[Cris123]

I worked for a year at a bakery. My boss paid me with a company check. According to the IRS guidelines, I was clearly an employee, not a IC.  I asked her all year about a pay stub with deductions and she told me not to worry. She has since closed the shop.

Now she asked me to tell her how much she paid me all year so she can send me a 1099.

I probably made about 15K. What should I do?

[ReginaM · Accepted solution]

If you do not agree with this classification you can speak with your employer to request to be treated as an employee and given a W-2.

If your employer refuses you can file Form SS-8 with the IRS.  This will request the IRS to look at your employment situation and make an official determination as to whether you are an employee or an independent contractor. The IRS will contact your employer to gather facts from them to make this determination.

 If you choose to do this you can enter your 1099-Misc in Turbo Tax and for the reason received select I got this 1099-Misc for another reason and then My employer reported this extra money on a 1099-Misc but it should have been reported on a W-2.

If you decide not to file Form SS-8 then you will be treated as an independent contractor for tax purposes.  This is not always all bad though since you can deduct any un-reimbursed out of pocket expenses you may have directly against your income.

[Cris123]

Thank you!

Is there someplace where I can see the allowed deductions for an independent contractor?

[ColeenD3]

Unfortunately, there is not one set of expenses. It all depends on your type of work. While beauty supplies might work for a hairdresser, they would not work for you. 

You could possibly take expenses for uniform or supplies/ tools if you had to buy them for work. Basically, anything you needed to buy in order to perform your work.

You are probably better off doing what Regina suggested above. You were an employee and should file as one.

[Cris123]

Thank you

But what about my medical insurance? Can I deduct that? I had to go on my husband's insurance because this job did not offer any.

[ColeenD3 · Accepted solution]

If you paid for medical insurance out of your own pocket, that is not paid by your husband's company, then yes, you can deduct it. However, it is not a business deduction. You would need to itemize to claim any medical expenses.