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My husband gets paid via a W2 for some of the work he does…

My husband gets paid...

My husband gets paid via a W2 for some of the work he does for a particular very large company. The same company also pays him for some work via a 1099, and a different division within the same company pays him for more work via another 1099. The work itself is the same. They are just classifying him differently. This isn't right, is it?

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

My husband does consider himself an IC in the sense that he does do work (of the same nature I described above) for other different companies. But, this one big one is the largest source of income, and I think what they're doing is shady. We have, as a result, a very large tax bill every year. They'll pay him up to a certain point via a W2 and then say in order to avoid some cap (not sure what they mean) the rest will be via 1099.

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Answered in 2 minutes by:
3/13/2018
Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,609
Experience: 15years with H & R Block. Divisional leader, Instructor
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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.

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Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes.

Workers who believe an employer improperly classified them as independent contractors can use Form 8919 to figure and report the employee’s share of uncollected Social Security and Medicare taxes due on their compensation.

An employee performing the same tasks for a company may not be an employee and an Independent contractor.

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Customer reply replied 1 month ago
If we were to file the 8919, that would mean that the IRS would circle back to the employer, right? So we would be potentially starting a legal battle if we did that. I mean, what they're doing is wrong, but it's a tricky situation when they supply the majority of our income. If we/they were to get audited, would we have any liability for allowing this situation to continue? E.g., if we didn't file that form?

Yes, they will investigate the employer.

As I said the employer is the one that needs to properly report and pay their share. You are already paying the full SS and Medicare. You would not be in any trouble though no.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 17,609
Experience: 15years with H & R Block. Divisional leader, Instructor
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Customer reply replied 1 month ago
Thanks, ***** *****! You were very helpful.

You are most welcome.

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