How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Robin D. Your Own Question
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 15610
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

My husband works for my familys buisness and they have

Customer Question

My husband works for my familys buisness and they have decided to put him as an independent contractor even though he is legally an employee. They have been paying him by cash or check since January 2016. What are my opyions for filing without lying. He has no expenses as an IC would. He has set hours and wears a uniform.
JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?
Customer: no
Submitted: 8 months ago.
Category: Tax
Expert:  Robin D. replied 8 months ago.

Hello, I'm Robin. Welcome to JustAnswer. I'm reviewing your question now and typing up my reply. I'll post that in just a few moments.

Expert:  Robin D. replied 8 months ago.

I know you stated that this is your family's business but your husband can report this and request the IRS classify his position.

If the IRS finds him to be an employee the business would have to pay half his SS and Medicare.

Do you think he wants to do this?

Customer: replied 8 months ago.
He doesnt want to go with this option. He has mentioned it to them and they now have him on a W2 for 2017 filing year but hees at a loss on what to do right now for 2016
Expert:  Robin D. replied 8 months ago.

If not , you file Schedule C and report his income. He will pay SS and Medicare tax (normally shared with employer) on the income over $400 and income tax on all the profit.

Expert:  Robin D. replied 8 months ago.

He should receive a 1099MISC from the business showing what he was paid. This amount is his gross to show on the Schedule C

Expert:  Robin D. replied 8 months ago.

You will see that there is an adjustment for half that SS and Medicare tax (this is the Self Employment tax) on the 1040 form so that amount reduces the taxable income.

Expert:  Robin D. replied 8 months ago.

Please let me know if you need clarification. If you do not then a positive 5 star rating is appreciated so I get credit for the response. (look for the STARS or SMILEY FACES)

Expert:  Robin D. replied 8 months ago.

Hi, I am checking back to see if you required more information.