As an independent contractor, you’re proud of the work you do and the services you provide. You love the flexibility and freedom that come with being your boss. But what happens when your employer mistakenly classifies you as an independent contractor instead of an employee?
Suddenly, you face tax issues and owe taxes for uncollected Social Security and Medicare. It’s frustrating and overwhelming, but don’t worry; there’s a solution.
Enter Form 8919 is a powerful tool that can help you rectify the situation and reduce the taxes you owe.
Whether you’re just starting your freelance journey or you’ve been in the game for a while, Form 8919 is the key to getting back on track and staying in control of your finances.
What is Form 8919 – Uncollected Social Security and Medicare Taxes?
Form 8919 is a solution for independent contractors who have suffered from an employer’s misclassification and now face uncollected Social Security and Medicare taxes.
By filling out this form, you can accurately report the taxes you owe and rectify the tax consequences caused by mistake.
Not only will this ensure you fulfill your tax obligations, but it will also allow your Social Security earnings to be credited to your Social Security record.
Before Filing Form 8919 As An Independent Contractor
An employer misclassifying you as an independent contractor can have serious tax implications. That’s why taking the necessary steps to rectify the situation is crucial.
Before filing Form 8919, it’s crucial to first file IRS Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
This four-page questionnaire gives the Internal Revenue Service (IRS) the necessary information to determine your correct worker status. It can take months for the IRS to review and decide, but the odds are usually in your favor.
If you need clarification on your worker classification, it’s best to file Form SS-8 to determine whether you’re an employee or an independent contractor.
Understanding Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
Form SS-8 is essential for workers who believe they have been misclassified. The form helps the IRS determine whether a worker is an employee or an independent contractor. Workers who think they have been misclassified can also file Form SS-8.
The IRS will notify the filer that you are an employee, not an independent contractor. After confirming your employment status, they must file Form 8919 to report uncollected Social Security and Medicare tax on wages.
You must file Form SS-8 separately from your tax return and should file it before filing the income tax return.
When Do I Need to Use Form 8919?
- You performed services as an independent contractor, but the IRS considers you an employee, and Social Security and Medicare taxes were not withheld from your pay.
- You filed Form SS-8 and received a determination from the IRS confirming your employment status or have yet to receive a reply by tax time.
- You received a W-2 and a 1099-MISC from one firm in the same tax year and the amount on the 1099-MISC should be included on the W-2 as wages.
Note: Be sure to use Form 8919 in the above circumstances to report your uncollected Social Security and Medicare taxes and rectify any tax implications caused by your employer’s misclassification.
How to Read Form 8919?
Lines 1 through 5:
- Fill out a separate line for each employer you worked for during the tax year that misidentified you as an independent contractor.
- If there were more than five employers, attach another Form 8919 and fill in lines 1 through 5 as needed.
- Only complete lines 6 through 13 on one form.
Line 6
- Combine the amounts in column (f) for lines 1 through 5 (including additional forms) and enter the total on line 6. You will also enter this total on your Form 1040 or 1040-SR (line 1) or Form 1040-NR (line 1a).
- If you’re required to complete Form 8959, enter line 6 (Form 8919) total on line 3 of that form.
Line 7: The maximum amount ($142,800) subject to Social Security tax is already entered for you.
Line 8: Enter your total Social Security wages and tips, unreported tips, and railroad retirement compensation.
Lines 9 through 13: Follow the math instructions for each line and enter the results.
Why Would I Have Uncollected Social Security tax?
Uncollected Social Security tax can happen when an employer misclassifies an employee as an independent contractor. As an independent contractor, you’re responsible for paying both the employee’s and employer’s share of Social Security and Medicare taxes.
If you were misclassified, the employer wouldn’t have withheld these taxes from your pay, leaving you with uncollected Social Security tax.
In Conclusion
Form 8919 is a powerful tool for misclassified workers who owe uncollected Social Security and Medicare taxes.
You can potentially reduce the taxes you owe by taking the necessary steps to rectify the situation. Understanding Form 8919 and how to read it can help you navigate the process and ensure you correctly report your taxes.
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