need tax advice as my old job changed me from a W2 employee to a 1099 employee without my knowledge.
- Thread starter iowahaha1
- Start date
This ^
It's been a big deal the last couple of years for both the DoL and IRS. Employer could be on the hook for matching FICA and FUTA. California has been especially heavy on forcing the employee classification (over 1099).
Me too.
Messed up situation but let’s be proactive about looking for trouble next time. It is often there.
I'm assuming SMALL with zero HR department.
I've been out of the personal income tax game for a lot of years, but I believe you can still itemize your business expenses on Schedule C and still take the standard deduction on your form 1040 line 12.
How so? Sounds like you aren’t always the most honest guy.
My guess is that OP has a fairly large pile of unopened mail on his kitchen table.
Hey, thanks for the replies. I will look closer at them when I finish work. One thing I did notice , about health ins. I was on my wifes insurance so that was a non issue. I just got my tax form back last night saying I was payed 60k as a W2 and 6k as a 1099. First I new of the 1099 thing. Job responsibilities the same,and same required tuesday meetings
6k assuming they didn’t withhold anything probably looking at 2500 in fed taxes. Depending on your tax bracket. Hopefully u have your write offs info. That is a shit thing to do to an employee.
After deductions I would be surprised if you paid much, if anything, in taxes on 6k.
You are ASSUMING he even has many deductions.
My guess is that he doesn't.
Also, I'm guessing he should have stayed an EMPLOYEE and they are screwing him.
Let me know what you do for a living.
Send me a DM if you want.
I'm a CPA and do taxes all day every day.
Office supplies including laptop, ipad, computer, office space in the home, some health insurance/ supplemental ins that isn't taken out of a paycheck (work comp, cancer, heart), airfare, hotels.
He’s on his wife’s insurance. Doubt he can subtract co pays or any non covered healthcare deductible.
I was able to write off supplemental ins premiums while on my wifes insurance through work, so I would ask if I were him. Considering he has anything like that.
Is self employed health insurance deductible?
Yes.
But it's not decreasing your self employment income/tax. Meaning, it doesn't go on your Sch C.
But if he was on her insurance from the start of year? Weird I guess. If the feds allow it.
Won't argue with anyone on the ins and outs, because I have no idea. All I know is that come time for me to do my taxes my acct would tell me all the things to bring in for deductions. Supplemental health ins premiums were on that list. So I mentioned that to OP.
Are you sure you were "switched"? Or was the 6k some other form compensation - like did you earn a special vacation spiff or anything like that? Sometimes they put those on a 1099, although I'm not sure why.
Unless u had to pay some sort of penalty to get o to your wife’s insurance mid year. Not seeing an outlay in business expenses by u.
I'm not into labor law, but from what I recall from law school, you are kind of up the creek if you are an independent contractor. It is a reason that a lot of companies prefer to do the independent contract worker stuff. I would never work for one that does business like that
I would caution the OP about claiming a deduction for office space in the home. It has long been a red flag for the IRS to take a closer look at your returns so read up on it before deciding to take advantage of such a deduction. You have to pass the tests of exclusivity, regularity and precedence for it to be considered a legitimate deduction from the IRS perspective.
Yes, I would politely talk with them voicing your concerns that you still believed you were a W-2 employee. Without an employee being fully aware they are a contract employee, and qualify for being a contract employee, carrying own liability insurance, having other employment it would be a tough argument for them. Especially while you still continued performing the same job, yeah needless to say they would be screwed. Also I think would be liable for entirety of self employment taxes, they would have to revise. Ive seen in some cases they have paid the federal and state WH as well
. However with all that being said, you may actually be better off keeping the 2 months as 1099. Find all business expenses you can find, mileage (or actual vehicle expense, phone expense, any small tools expense, any misc expense, supplies, office expense, licenses) You may be able to find enough expenses to basically eliminate the 1099 income. I would calculate things first before creating issue with your company. However, significant tax difference go after them full force.
FyI estimate your mileage shouldn't be that difficult. Either find the time you were contracted employee, calculate the days and then the mileage round trip. As contract employee your home is your work address. Talk with tax advisor they may be comfortable taking mileage for the entire year considering the issue at hand.
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I'm not telling OP what to deduct, but your silly not to ask a tax professional. I used every deduction I could when I was 1099. W2 is for the birds. Absolutely hate it.
From what I can tell, OP worked on site and therefore had no home office.
As a 1099 contractor, could OP claim expenses for driving his vehicle to the job site each day?
As stated earlier if a contractor I would consider his home to be his main office location. So yes I would be taking mileage.
Regarding home office, its 1 freaking year. Besides you could always put in other expenses either home office sq footage times $5 or in misc. I highly doubt he will be audited on schedule C income that has 2 months of income. You have to remember, IRS wants to make money on their letters or audits.
My advice is to go shoot the place up and teach those assholes a lesson they won’t soon forget. U.S.A.! U.S.A.! U.S.A.!
It does decrease your income tax though. Depending on tax rates could be significant, but yes not as much as Sch C deduction which has the income tax plus the 15.3% self employment tax.
Assuming the "job site" is his office, the answer is NO.
The IRS considers this commuting which isn't deductible.
Now if he has to drive to different locations/clients that's a different story.
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