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1099-Misc recipients who are really employees and the QBID

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    #1

    1099-Misc recipients who are really employees and the QBID

    I have two clients who get a 1099-misc but are really employees so I file a SCH C. Would it be pushing the envelope to give them the QBID?
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    #2
    If they are "really employees" (who should receive W-2s), you should a SS-8 and Form 8919 to treat them as employees.

    If they are Independent Contractors (who correctly receive 1099-MISCs), then Schedule C and QBI deduction are correct.


    Understanding Employee vs. Contractor Designation | Internal Revenue Service
    https://www.irs.gov/newsroom/understanding-employee-vs-contractor-designation
    FS-2017-09, July 20, 2017 - The Internal Revenue Service reminds small businesses of the importance of understanding and correctly applying the rules for classifying a worker as an employee or an independent contractor.

    Independent contractor (self-employed) or employee? | Internal Revenue Service
    https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee
    Learn how to determine whether a person providing a service to you is an employee or an independent contractor.

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      #3
      As Taxbillguy posted. I would not push QBI. Also you may want to advise your clients that they are really getting ripped off by their employers.

      Many years back we had a marketing outfit in our county and they were paying 90% of their "employees" as independents, issung1099-Misc. Three employees(one my client) filed a claim with the labor board and the employer was charged by IRS and DOR, and the employees were paid restitution for the social security taxes not paid by employer.
      Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR

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