In 2007, were you an employee whose employer paid you as an
independent contractor? Employees usually receive a Form W-2 while
independent contractors usually receive a Form 1099-MISC.
Generally, a worker who received a Form 1099 for services provided
as an independent contractor must report the income on Schedule C and
pay self-employment tax on the net profit using Schedule SE. However,
if the worker was actually an employee, rather than an independent
contractor, the worker is not required to pay the full self-employment
tax, and expenses can only be deducted as an itemized deduction.
Beginning in 2007, Form 8919, Uncollected Social Security and
Medicare Tax on Wages, may be used if you were an employee and your
employer did not withhold your share of these taxes, and you meet
certain criteria. These taxes will then be credited to your social
security records.
To be eligible to use Form 8919, you must meet one of several
criteria indicating that you were an employee while performing these
services. The criteria include:
- You filed Form SS-8, Determination of Worker Status for Purposes
of Federal Employment Taxes and Income Tax Withholding, and received a
determination letter from the IRS stating that you are an employee of
the firm.
- You have been designated as a “section 530 employee” by your employer or by the IRS prior to January 1, 1997.
- You have received other correspondence from the IRS that states you are an employee.
- You were previously treated as an employee by the firm and you are
performing services in a similar capacity and under similar direction
and control.
- Your co-workers are performing similar services under similar direction and control and are treated as employees.
- Your co-workers are performing similar services under similar
direction and control and filed Form SS-8 for the firm and received a
determination that they were employees.
- You have filed Form SS-8 with the IRS and have not yet received a reply.
For more information see Form 8919, Uncollected Social Security and
Medicare Tax on Wages, available on the IRS Web site at IRS.gov or by
calling 800-TAX FORM (800-829-3676).
Remember that for the genuine IRS Web site, be sure to use
.gov. Don't be confused by internet sites that end in .com, .net,
.org or other designations instead of .gov. The address of the official
IRS governmental Web site is www.irs.gov.
