Will filing a Form 8919 with the reason code H, since we received bth a 1099 and a W2 from same employer, cause an investigation of them? No SS-8 is filed. Need my job!

[seppyf31c]

Just to be clear, we know for a fact that it is an employee/employer relationship...it meets all of the requirements and definitions. And the employer eventually made the change mid year and started withholding FICA taxes. So we received a 1099-MISC for the first few thousand in earnings, and then a W-2 for the remaining year. So that is not the question. We know we can file the 8919 form and it meets the "H" reason. However, what is not clear is: will this generate an investigation of the employer by the IRS? The literature we've read seems to imply that the SS-8 filing is what triggers an investigation; but the "H" category states NOT to file the SS-8. Does anyone know if the SS-8 is the trigger? And if filing the 8919 with the "H" parameter...without filing the SS-9...will not raise the hounds? It shouldn't be so hard to do the right thing without getting an employer in trouble...and they might retaliate. If there is no way around this, then the IRS is forcing taxpayers to become stool pigeons if they want to file accurately and fairly...which would be patently UNfair.

Thanks in advance to anyone who has experience and input on this topic.

[DanielV01 · Accepted solution]

You are correct in filing Form 8919, and you do not need to file Form SS-8 because they paid you with both a 1099 and a W2 in the same year.  That automatically admits that you are an employee.  The purpose of the Form is that your income reported on Form 1099 is treated as wages, and therefore you are only responsible for 1/2 of the Social Security and Medicare payments; your employer is responsible for the other half.  

Filing Form 8919 is not retaliatory:  you are stating that you are not going to pay the portion of tax that you are not responsible for paying.  Yes, the IRS will reach out to your employer so that they pay the half that they are responsible for.  And this "should not" be a reason for your employer taking action against you.  However, no one can guarantee how they will actually react.

If you are concerned about this, since you have a few days before the filing deadline, you can share with them what you have found out, how your tax return is being affected, and how you intend to file, but that you wanted to make sure everything was "all good" before you do.  This would eliminate the element of surprise they get later on, and perhaps even stimulates them to do the right thing.  You are not required to take this step, but you may choose to.

In the end it will be your decision.  You are correct to file the form, and it is not retaliation or vindictive.  But you are concerned about long-term effects, and that's understandable.  I can't tell you what you should do, but I hope this gives you a better picture of the process and gives you an idea about what you can do.

[seppyf31c]

Thanks so much for your thoughtful and informed reply!

[DanielV01]

You are welcome.  I've personally helped a few clients with this situation.  I do understand it can be delicate, but you are within your rights.  Hopefully all works out for you and best of wishes to you.

[Tburg10]

Will my employer get charged a big penalty for not paying the medicare & ss.  It was only $725.  Once a year we deliver RV units to a campground for a customer and my boss always does a 1099 (this was the first year that I participated).  I think he thinks that it reduces his liability if we are treated as outside contractors rather than employees for this job. Theres no malice or deceit intended on his part.

Anyway, I filed my schedule c and then input "other expense" of $725, then completed a form 8919 for the $725.  Is this correct or is there a better/easier way to report this income.

Thanks

Tom

[AmyC]

A 1099MISC, can be issued to employees when they are doing something outside of their normal job. If you come in on the weekend and clean the toilets, it has nothing to do with your normal job, that could be a 1099 job.

A bonus associated with your job could go in box 3 so there is no self employment tax.

If this is required by your job, it should be in your W2.

All to say, I don't know your job to know what was best for you. But if the medicare and social security tax was $725,  that would be $9,477 you earned.

@Tburg10