Tax - Filing an Amendment

[JohnDoe]

I just received a misc-1099.

Would I list the this amount under 'wages'? The amount is in box 7 on the 1099.

It was severance money from due from 2008. The company I worked for was paying me severance in 2008, then filed for bankruptcy and the payments stopped.

In 2009, they paid me the rest of what I was due for severance.

Turbo tax is not clear on this as there is no option for severance and it keeps telling me it should have been on a W-2 and it wants me to file some other form too.

Thanks.

 

[MichaelB]

Well, Box 7 means it probably is wages, which would explain why TT wants the W-2. There is a worksheet used to determine if you worked as an independent contractor - to see if you owe payroll taxes on this money, in addition to income tax.

 

[rothlev]

1099 misc income is reported on a schedule C. You pay the Fica tax (15%) . If this was income that should have been reported on a w-2 there is a process and a form to fill out for that. It would save you the extra 7% of FICA tax you pay .
Let me know if you want to dispute the way they paid you, and I will look up the form to file.

 

[frayne]

Rothlev, get your Pub 17 out, not only FICA but medicare as well for a whopping 15.3% plus the tax on the additional income. If they did not with hold SS or medicare, it will have to be paid by the recipient of the 1099 misc. Not all that unusual either.

 

[rothlev]

i know - i said 15% I was rounding! You will pay your federal tax regardless .

forms to dispute this method of payment: mail ss-8 to the IRS.

file form 8919 with box G checked. You will only pay your share of the FICA and medicare taxes if you do this. Do this if you think you should have been paid on a w-2 not as an independent contractor on a 1099

 

[rothlev]

FRAYNE: FYI

The term FICA refers to both medicare and social security taxes

 

[JohnDoe]

i know - i said 15% I was rounding! You will pay your federal tax regardless .

forms to dispute this method of payment: mail ss-8 to the IRS.

file form 8919 with box G checked. You will only pay your share of the FICA and medicare taxes if you do this. Do this if you think you should have been paid on a w-2 not as an independent contractor on a 1099

Form ss-8 was the form TT wanted me to file. I'm guessing this should have been reported on a W2 since that was how my previous severance was reported. Btw, nothing was withheld on this.

I'll take a look at this stuff tomorrow - it was too nice outside to worry about it today.

Thanks.

 

[JohnDoe]

Turbo Tax defines what should be included in box 7...

This could include:
Fees
Commissions
Any non-cash amounts

If you have this income, you're considered self-employed and you are entitled to write off related expenses.

Amounts that should be reported as wage income include:
Bonuses or severance pay not included on your W-2
___________________________________________
Well, this is severance pay .

So what does "wage income' mean and how should I report this?
Turbo Tax does not handle this very gracefully.

EDIT: I should state that I would to resolve this the easiest way possible - which might be just to file out sched c as list my business as severance pay. I don't think TT contains form ss-8. Would I have to download it and send it - get a reply - then file an amendment? I close just to going to H&R block and let them deal with this.

EDIT: I told TT that I am filing SS-8 and TT will report it as income as looks like I need to pay in $157 + $78. Box 7 on my 1099 was 1,020.

Does that all sound right?

Thanks.