Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.
12-01-2017 01:45 PM
I have been working at my job for a few months and still believe i should be classified as a part time employee instead of an independent contractor (working on premise, regulated work, hours, pay). They are planning on sending me a 1099. Should I file form SS-8 before or after I file my tax return (due April 2018 for year 2017)?
If i file form SS-8 before filing my taxes and the IRS makes a determination in my favor, will the company then send me a W2?
Or do I have to file my 2017 return with the 1099 and then amend my return after?
Any info would be helpful!
12-01-2017 08:35 PM
Welcome to the H&R Block community.
For 2017, you will need to file your tax return with whichever form you are issued. Your employer cannot go back and withhold taxes from checks that have already been written, so it won't really make much difference at this point. The IRS also takes quite a while to investigate things, and it could be after the due date for your tax return by the time you hear back from them. If you are determined to be an employee then you should be issued a W-2 for your 2018 tax return that you'll file in 2019.
The only difference between a W-2 and a 1099-MISC in the amount of the taxes due is that you have to pay the entire 15.3% of the social security and Medicare Taxes instead of just the employee's 7.65%. However, you get a deduction directly on the 1040 for 1/2 of the social security & Medicare tax which reduces your taxable income for the federal income tax. So the FICA tax may be a little higher than you would see as an employee but you save a little on the income tax so it's not as bad as it might seem.
If you incurred any unreimbursed expenses in your line of work, such as driving from business location to business location or purchasing supplies, then you can deduct those expenses against the 1099-MISC income. You are taxed only on your NET income on Schedule C, so your taxes will decrease with each expense you deduct.
You can also reduce the FICA taxes with refundable credits & excess withholdings from other jobs.
The other difference that comes with a 1099-MISC is that you haven't had anything withheld so you have to make sure you save enough of your pay to cover all three federal taxes. If you expect to owe more than $1,000 you generally have to make estimated payments to the IRS four times per year, but you're exempt from that and can pay your tax when you complete your tax return if you didn't owe any tax the year before.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)
12-03-2017 05:50 PM
Thank you for your reply and the information. (i didn't receive a notification so apologies for the delay)
If the determination is that I was an employee in 2017 what happens: Do I have to refile/file an amendment for my taxes for 2017, replacing my 1099 income with W2 income? Will they send me a corrected/replacement W2 so that I can file an amendment? Or do I wait until I file my 2018 return?
Also, If I think it will be determined that I was employee in 2017, should I bother claiming unreimbursed expenses on the 1099 income they are planning on sending me for 2017, reducing my net income?
thanks in advanced for your help!