Commissions on employee shown on 1099

[thomtax]

Client is employee of local company. He receives a W2 for his wages. He also gets paid commission and bonuses for business that he brings into company. For some reason, the company chose to put this on 1099 as non-employee compensation, instead of on W2 where I feel it belongs.

Can I put this on line 21?

Then, I assume that I need to pay SE tax on it?

Thanks for observations and thoughts.

LT

PS - Unfortunately, this same company has had the wrong amount of SS and medicare withholding on all of it's W2 forms, which were prepared by a local CPA.

[OldJack]

Actually the company should correct the W2 and pay their penalties. However, if the client doesn't want to argue with the employer it should go on Sch-C subject to SE tax.

[veritas]

I would

put it on sch c and back it out to line 1 wages. Pay the fica tax as unreported tips.

[OldJack]

put it on sch c and back it out to line 1 wages. Pay the fica tax as unreported tips.

Isn't that asking the IRS to audit the employer and the employee then being the bad guy?

[veritas]

That is something to consider

First we would ask if there were a repercussion would that be a problem for the employee? Often it is not.

We have done it multiple times over the years and nothing happened to the employers.