How do I proceed with filing my taxes when my ex employer said he was going to 1099 me as independent contractor, but I was hired at an hourly wage and as an 'employee'? =====>>> You need to ask him why he?ll send you a 1099. If the answer is not to your liking then you neeed to fill out the SS8.basically, employer misclassification of their employees as independent contractors is a widespread phenomenon in the US. The IRS estimates that employers have misclassified millions of workers nationally as independent contractors. While some employers misclassify their workers as independent contractors in error, often employers misclassify their employees intentionally in order to reduce labor costs and avoid paying state and federal taxes. Misclassifying employees as independent contractors can free employers from their legal responsibilities to their workers, such as providing a minimum wage, and abiding by hour laws, because employment and labor laws are based on traditional employee-employer relationships. In today?s strained fiscal environment, both federal and state governments are taking enhanced steps to combat employer misclassification. On the federal level, the IRS audits employers for unreported federal taxes stemming from misclassification. States, meanwhile, are passing initiatives and laws to protect employees and crack down on unlawful employers. Both federal and state agencies and workers themselves are seeking legal action against misclassification. A number of these suits resulted in positive outcomes for the workers, establishing both correct classification and winning retroactive compensation for overtime and other lost benefits.
It is critical that business owners correctly determine whether the individuals providing services are employees or independent contractors. If your ER classifies an employee as an independent contractor and he has no reasonable basis for doing so, he may be held liable for employment taxes for you an EE . aslongas he has a reasonable basis for not treating you as an employee, he may be relieved from having to pay employment taxes for you. To get this relief, he must file all required federal information returns on a basis consistent with his treatment of you. Once you believe that you have been improperly classified as independent contractor by the employer, then you can use Form 8919, Uncollected Social Security and Medicare Tax on Wages to figure and report your share of uncollected Social Security and Medicare taxes due on yopur compensation. If either side doesn't understand the difference, I would be even more convinced that you are an employee.you need to complete an IRS Form SS-8 to get an official ruling on the worker's status. When you file your income tax return, as said you can attach a new form, IRS Form 8919 on return and only pay the employee's half of social security but will still have to cough up all the income tax. IRS and the states are stepping up enforcement in this abuse area.
I have received nothing from him as of yet. How do I proceed with filing my taxes? ==>> AS MENTIONED ABOVE;
I have done work as independent contractor in the past for other people with my DBA name. The only records I have for working for him is that he wrote checks to my business name even though I was hired as an employee. I'm starting to believe something fishy is going on and need to figure this out.==> Employers can save a lot of money by classifying workers as independent contractors instead of employees. That's why many of them do so, even if the workers involved should really be treated as employees under the law.So you need to talk to him how he treated you as a W2 ee or a contractor; I guess it depends on; Although independent contracting relationships can be advantageous for workers and businesses, some employees may be intentionally misclassified as a means to cut costs and avoid compliance with labor laws since
Misclassification also results in lower tax revenues for government and an uneven playing field for employers who properly classify their workers. You need to talk to your Employer; you can try to talk to your employer to see if it will review your classification and reclassify you as an employee. Explain that you think you've been wrongly classified as an independent contractor. At the very least, you should get an explanation as to why they think you are a contractor, instead of an employee.
Another way is to get the IRS Involved. If trying to talk to your employer doesn't work, you can contact the IRS. Workers who believe they have been misclassified as independent contractors may request that the IRS determine their employment status for federal tax purposes by filing form IRS Form SS-8. There is no fee for filing.
In the case of CA, CAemployers must be very careful not to misclassify employees as independent contractors. Governor signed into law two very important statutes that impose penalties against employers who misclassify employees as independent contractors. The new laws let the state go after employers who intentionally misclassifies an employee as an independent contractor for penalties up to $25K per violation.