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Old 01-28-2012, 02:58 PM
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1099 for employee

my spouse received a 1099, but she meets the classification of a employee in my opinion. She has made the quarterly required tax payments. She doesn't want to lose her job, would it be legal to file the schedule C even if she was actually a employee?



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Old 01-29-2012, 06:22 AM
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“my spouse received a 1099, but she meets the classification of a employee in my opinion. She has made the quarterly required tax payments. She doesn't want to lose her job,”---->1099MISC is NOT for an EE;In general, an EE doesn’t need to pay quarterly estimated taxes to the IRS.
“ would it be legal to file the schedule C even if she was actually a employee?”---->UNLESS she is a statutory EE( EEs ,i.e., city salespeople or life insurance agents or etc, who qualify as ICs under commonlaw, but are taxed as EEs for FICA Tax), misclassifying an EE as an independent contractor, however, may have tax consequences. In addition, misclassifying an EE as an independent contractor may result in the business having to back-pay premiums otherwise owed for workers’ compensation insurance. A business may also face liability if an employee were to get injured on the job for which there was no workers’ compensation insurance because the injured employee was misclassified as an independent contractor. It is therefore important to understand the difference between an independent contractor and an EE. Misclassifying EEs carries a penalty for the ER. In general, the penalty will be the ER’s share of FICA Taxes plus the income and FICA Taxes that were NOT withheld from the EE’s earnings.



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Old 01-29-2012, 11:59 AM
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1099 Employee

Thanks for your reply. I actually did a search and found this information already.

What I was asking is how should we do our taxes without breaking the law or her getting fired?

Thanks in advance...



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Old 01-29-2012, 12:41 PM
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“What I was asking is how should we do our taxes without breaking the law or her getting fired?”----> As said, as long as your spouse is an EE, If that is the case, then she may NOT file a Form 1099. Your spouse, as you can see, must receive a Form W-2 from her ER . If the ER have failed to include your spouse on his payroll tax returns and withhold and pay the taxes then her ER has a significant, costly problem on his hands. Your tax accountant should be explaining this to you. I guess your spouse needs to contact her HR dept. or supervisor to know how the ER classifies her. Your spouse may file IRS form SS-8.If the IRS agrees with your spouse, she can file a 1040 with form 8919 and pays only the EE share of FICA TAxes.If the IRS does not agree with your spouse, then she needs file a 1040 with a schedule C-EZ and SE. A business name, insurance, etc. is not a requirement. The nature of the work determines whether or not your spouse is an employee.However, your spouse needs to contact her ER first.
ALSO, as you said,QUOTE,” my spouse received a 1099, but she meets the classification of a employee in my opinion. She has made the quarterly required tax payments. She doesn't want to lose her job.”---->I am NOT sure what you mean;your spouse loses her job since as an EE, she has made quarterly taxes??? I do not think so.



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Old 01-29-2012, 01:12 PM
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1099

If she files this form with the IRS, the employer will have to pay the taxes. I read this already on the net. They will also terminate her for turning them in, as I think they are paying her as a 1099 to avoid taxes and injury comp fees.

I also read that this is quite common for employers to cheat this way. She is basically a office manager everyday at their small business. She has no other jobs.

My question was how do protect myself basically as I live in a community property state without her losing her job?



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