1099 Misc Question

[llg871]

What is the name of your state? GA

My son received 4 W2s and one 1099 Misc. When the 1099 Misc was inserted into the tax software it indicated that this was consider a self employment business. It is asking what kind of business this was. He worked at a warehouse in shipping and receiving. What kind of business should he say this was?

[Dandy Don]

What is the exact title of the form 1099 (does it have a suffix or letter following the 1099-?)

What is the name andn city/state of the business and which tax software was used?

This is most likely an error in the tax software. Instead of relying on the software totally to prepare the return, you may want to visit a tax accountant or tax preparer IN PERSON to see if the result would be different.

[LdiJ]

Originally Posted by llg871

What is the name of your state? GA

My son received 4 W2s and one 1099 Misc. When the 1099 Misc was inserted into the tax software it indicated that this was consider a self employment business. It is asking what kind of business this was. He worked at a warehouse in shipping and receiving. What kind of business should he say this was?

How much money was involved in the 1099?

[llg871]

It is a 1099Misc My son did not have a business. But the company he worked for sent him a 1099Misc instead of a W2. We are using Turbo Tax software

Originally Posted by Dandy Don

What is the exact title of the form 1099 (does it have a suffix or letter following the 1099-?)

What is the name andn city/state of the business and which tax software was used?

This is most likely an error in the tax software. Instead of relying on the software totally to prepare the return, you may want to visit a tax accountant or tax preparer IN PERSON to see if the result would be different.

[llg871]

The amount is for $646.00

Originally Posted by LdiJ

How much money was involved in the 1099?

[LdiJ]

Originally Posted by llg871

The amount is for $646.00

What has happened here is that the employer is trying to get out of paying employer taxes by treating its employees as contractors rather than employees.

There is a new form for 2007, form 8919 that allows someone to both report the employer who paid them as self employed, when they were not, and allows them to pay only the employees share of social security and medicare taxes on the income, instead of paying full self employment taxes. However, I am not sure that Turbotax is able to handle that or makes it easy for it to be handled.

The amount of self employment tax on that income would be about 100.00, therefore 50.00 of that should have been paid by the employer, and about 50.00 would be owed by your son (but might be offset by his withholdings from his other jobs).

If Turbotax can't handle it you may have to try other online tax preparation sites or do a manual return. You will have to do a regular 1040, you won't be able to do a 1040EZ or 1040A. You can download the forms at irs.gov

Normally I would advise someone to use a tax professional, but the amount of savings involved here could be eaten up by the additional cost.