Worked for company, was paid, never signed a 1099?

[Bluto]

Based in TX, Company based in CA.

Last year when COVID first began blowing up, the company I worked for switched the entire sales team from full W2 employees with benefits to 1099 Independent Contractors. I initially wasn't happy with several of the the terms in the 1099 (mostly pertaining to commission payouts, etc) and refused to sign, and instead sent back my own redlined copy. HR agreed to review it but asked for some time as things were chaotic due to all the changes, plus layoffs and terminations in other departments. I was asked to continue working as usual while it got resolved.

The 1099 was never sent back to me until six months later. Around the time I finally received it, I had found another job and ceased working for the 1099 employer.

Fast forward to February 2021 and I haven't received a 1099 from them for my taxes. But now that I think about it, I never was officially a 1099 contractor with them anyway as no agreement was ever signed. Despite this, I was paid a monthly commission by them for previous sales up.

I have reached out to HR for some kind of documentation, verification of employment/1099/etc but have heard nothing for five weeks.

For tax purposes, what am I to do here? This almost feels like "cash in hand" work at this point.

 

[cbg]

When you called the IRS and reported this, what did they say?

 

[Bluto]

I haven't engaged with the IRS yet as I was waiting to see if the 1099 was going to be sent. As we're now about to head into March, now I'm trying to figure out what exactly I'm supposed to do here.

Would calling the IRS be a good first step?

 

[Taxing Matters]

Based in TX, Company based in CA.

Last year when COVID first began blowing up, the company I worked for switched the entire sales team from full W2 employees with benefits to 1099 Independent Contractors. I initially wasn't happy with several of the the terms in the 1099 (mostly pertaining to commission payouts, etc) and refused to sign, and instead sent back my own redlined copy. HR agreed to review it but asked for some time as things were chaotic due to all the changes, plus layoffs and terminations in other departments. I was asked to continue working as usual while it got resolved.

The 1099 was never sent back to me until six months later. Around the time I finally received it, I had found another job and ceased working for the 1099 employer.

Fast forward to February 2021 and I haven't received a 1099 from them for my taxes. But now that I think about it, I never was officially a 1099 contractor with them anyway as no agreement was ever signed. Despite this, I was paid a monthly commission by them for previous sales up.

I have reached out to HR for some kind of documentation, verification of employment/1099/etc but have heard nothing for five weeks.

For tax purposes, what am I to do here? This almost feels like "cash in hand" work at this point.

Let's start by clarifying a few things. First of all, Form 1099 is a reference to a series of information reporting forms that persons (mostly businesses) file with the IRS to report certain payments to others. Nonemployee compensation paid to independent contractors is just instance of when a Form 1099 (specifically Form 1099-NEC) is required. Form 1099 is not a kind of work situation nor a kind of contract.

Second, you don't have to sign a written agreement to have a contract. All employment situations, whether as an employee or as an independent contractor, are contractual arrangements. You worked for part of the year last year for this employer and were treated by the employer as an independent contractor — which you evidently agreed to do as you worked those months under those conditions. Regardless of whether you were an employee or independent contractor, the amounts you were paid are included in your gross income for federal income tax.

However, as an independent contractor, you'd be responsible to pay self employment (SE) tax, which is how self-employed persons pay their FICA (Social Security and Medicare) taxes. You'd also potentially be able to take deductions related to work that you could not take as an employee. If you were actually an employee (despite the company's claim that you were an independent contractor) then you'd have only been liable to pay half the FICA taxes and the employer would pay the other half. And you'd have less ability to deduct work related expenses.

The determination of whether you are an employee or self-employed is made by examining a number of common law factors of employment. The label you and the employer put on the arrangement does not determine the outcome and, indeed, is one of the least important factors. See IRS Publication 15-A which explains these factors in some detail.

So the first thing you need to do is determine whether you were an employee or self-employed. If the answer is not clear after looking at the publication then I suggest you see a tax lawyer for help sorting that out. Once you know that, you'll then be able to complete your income tax return. Since presumably there was no tax withholding for this work, you don't need either a W-2 or 1099 from the employer to be able to do your return. What you do need is accurate information on what you were paid, and hopefully you kept good records of that. All taxpayers need to keep records of their income regardless of what type of income they have.

I have no idea what you mean by "cash in hand work".

 

[eerelations]

I have no idea what you mean by "cash in hand work".

I think OP means paid under the table work.

 

[FlyingRon]

To answer the question, the payer is only required to send 1099s in certain circumstances (dealing with individuals over $600, for example). It's up to you to report and pay taxes (estimated, and reconciled on your return) on any money you receive whether you get a 1099 for it or not. You should keep your own records if you are in business for yourself rather than expecting your customers to do it for you.