Can the income from a 1099 Misc for a employee be reported on line 21 instead of 7 and form 4137 to calculate the se tax.Was a employee but paid on a 1099 Misc.What information needs to be added as software program limits what can be added.
-
-
Follow the procedure under "Wrong Treatment of Employees as Independent Contractors," page 5-24 in TTB. -
No W-2 and no 1099
I just did this, It does have a tax impact on the client if you just simply enter on line 21 subject to SE, where if you use the instructions and prepare the 4137 and extra paperwork to file the SS8 with Federal the tax client is only responsible for the FICA and Mcare taxes that would have been deducted from a regular paycheck. Note, tho I could not efile the clients tax return. So spent some time preparing these papers. The positve side is that the tax client only is paying his share of the FICA/Mcare on the tax return,(that would have been deducted anyway) and hopefully Feds will contact the employer.
But what I really was thankful for is that Calif has an online form to also report the employer as payroll tax fraud. The taxpayer for the state has not received his credits for State disability or unemployment, nor has the employee been covered for Workman's Comp.
So inspite of the extra paperwork that I completed, I feel like there might be a positive side. There is far too much of this "underground" (As Calif labels it) and the employee is always the one that suffers.
SComment
Comment