Statutory Employee

[Mb2023]

This is the first year I have been considered a statutory employee, I have worked for my employer (state government) for 8 years, they assure me it was not an accident. Turbo tax wants me to fill out tax forms as if I were a business (business name, type of business, accounting method etc.) except I have always filed taxes as an employee until I got my W2 a couple weeks ago. Where do I go from here?

[PattiF]

To clarify your question, did you get a W-2 or a 1099-NEC?

[Mb2023]

W-2 with the Statutory Employee box selected.

[KrisD15]

You will need to file Schedule C like a Self-Employed Taxpayer. 

Because your "employer" paid part of your FICA tax, you receive a W-2, but you are also allowed to claim job expenses. 

A "Statutory Employee "is really a mix of part employee - part independent contractor. 

HERE is a link to explain more. 

[Mb2023]

I understand the schedule C, but why does the tax software want a business name, type (sole proprietorship, partnership, etc) accounting type (cash, other)  business name….I don’t actually have answers to these questions. As I am not a business, I am for sure an employee. 

[DawnC]

The only way you can claim your expenses as a statutory employee is to file Schedule C.   And TurboTax will require that information for any schedule C prepared in TurboTax.   For your expenses, assume you are an independent contractor and answer the set-up questions accordingly.   Use your name and your home address and cash basis accounting.    Schedule Cs are for sole proprietors - neither members of partnerships, nor S-corp stockholders use Schedule C.   

You are an employee for purposes of filing your W-2 and you are a self-employed business owner for purposes of your statutory expenses and Schedule C.    Refer to the Salesperson section located in Publication 15-A, Employer's Supplemental Tax Guide for additional information.

[Mb2023]

I think I follow, I will give it a try. Thanks

[LindaS5247]

Statutory employees have been declared employees under federal tax laws, but are independent contractors under common law. These workers are usually working salespeople or have commission-based jobs.

Note: The information from your W-2 has to link with your Schedule C.

On the screen where you entered your W-2 hit Continue.

1. There will be a series of questions and it will come to
2. BOX 13 on W-2
3. There are several options to choose from
4. Next screen Do you have any business expenses to this income?
5. Answer YES
6. It will ask for the description of your business
7. This will link you to your Schedule C

You may have to delete and reenter your Form W-2 to do this.