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MKEgal Asked March 2015

Employer didn't issue W2 or pay SS taxes. What do I do?

I'm curious about the best course of action when the person who hired me to care for her dad didn't give me a W-2 and I'm positive she didn't pay the SS taxes and so forth. (She even asked if I was going to claim the income on my taxes!!) I just did my taxes today, waited as long as I could for her to get me the tax form, then just added it as "other income". Should I contact the IRS? SS?

nowmymomsmom Mar 2015
you can also fill out a IRS form 4852 in lieu of a 1099 or w-2 hope it helps! you can order the form online from IRS

JessieBelle Mar 2015
I read the original question again and saw the return was already submitted and the money reported as "other income." I'm not sure how this was done, but it does cover the income tax part of it.

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pamstegma Mar 2015
Let's say you were paid $200 for a week. You would have had state and federal withholding. Of course there wasn't anything taken out, so you had to know from the very first check that you were an independent contractor.
I think you might have been better off to have a tax preparer help you figure out some business deductions for that income.

JessieBelle Mar 2015
BTW, did you fill out a W4 form for her? If you didn't I imagine that she wouldn't be withholding taxes or SS for you.

JessieBelle Mar 2015
The easiest way would be to get her to fill out a form 1099-MISC and send it to you. The second easiest way would be to call yourself a business and use Form C and SE with your 1040 to pay your taxes and self-employment taxes on the money. It is hard to know what to advise because so much depends on the understanding your client and you had, which sounds very uncertain.

MKEgal Mar 2015
OK, so with medicare, SS, & unemployment taxes, which total just over 16% (where'd you come up with 30%?), we're talking around $600 total for the year that she should have paid/withheld and did not.

I'm not concerned about my half-ish of that, because I made so little (thanks to her) that I owe no taxes, and actually get a hefty refund. (About $300 federal, $1100 state.)

And really, the contribution toward SS is miniscule, but if I have to file for unemployment or (eventually) SS, those hours & that income needs to be included.

So we're back to the original question, which is how do I get that corrected?
What agency should I contact?

nowmymomsmom Mar 2015
what did your contract with her state or did she not have one? Did you have one stating you were a independent contractor?Get this in writing so there is no problems forthgoing. If you were paid as household help normally not a 1099 unless $650 otr more is paid to one person.You are given a 1099 and are responsible for your taxes. If you were an employee and not 1099'd she would be responsible for your tax contribution which should be shown on your paycheck and you would receive a W-2. If neither then you just rec'd approx a 30% raise for the time worked for her-what you would have paid in taxes, etc...if you are worried going forth get it in writing!.

CarlaCB Mar 2015
One correction - it appears that a 1099 isn't required for a household worker who is treated as an independent contractor. See the attached link.
nolo/legal-encyclopedia/hiring-workers-home-legal-requirements-29728.html

CarlaCB Mar 2015
My question was whether she withheld any payroll taxes or FICA contributions. You would know because it would have been withheld from your pay. If she withheld taxes from your pay and didn't transmit them to the IRS or report them, she's guilty of a crime. But it doesn't sound like that happened.

One problem is that the federal law makes distinctions between employees and independent contractors that don't exactly track any state law. Whether federal income taxes or FICA contributions need to be withheld depend on the federal law definition because they're federal rules. State income taxes are another matter; I don't know. I live in a state with no income tax.

It sounds like she paid you "under the table". If you didn't have taxes withheld from your check, you can bet she didn't make employer contributions either. If she asked you if you intended to report the income, it implies that she did not report it either (employers are required to report wages paid and transmit the withholding to the IRS).

Even an independent contractor would normally receive a 1099 (not a W-2) from the employer, but it sounds like she didn't report this income or withhold from it, and she didn't expect you to report it either.

MKEgal Mar 2015
"Section 103.001 (5) of the Wisconsin employment regulations law defines an employee as any person who may be required or directed by any employer in consideration of direct or indirect gain or profit, to engage in any employment, or to go or work or be at any time in any place of employment."

MKEgal Mar 2015
She hired me to care for her dad, said she'd pay me weekly.
She dictated the hours, location, what to do / how to do it, which makes me her employee. (see below)
As far as I know she didn't pay the SS taxes and so forth (see above).
That would show on a W2, which I don't have (see above).

http://dwd.wisconsin.gov/worker_classification/er/laborstandards/

CarlaCB Mar 2015
What was the agreement when she hired you? Were you hired as an employee or as an independent contractor? Did she withhold any taxes from your pay, or FICA contributions?

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