My employer relocated to CA when they hired me last April. Unfortunately, it took 9 months for them to “get set up” with the state and during that time I was paid as an independent contractor (MISC-1099) instead of an employee (W-2). My employer was very honest about this and said they will reimburse me for anything I shouldn’t have had to pay. So my question is what amount (for self-employment tax, etc) should I seek reimbursement from my employer for $33,465.65 compensation on a MISC-1099? If it matters, my marginal tax bracket is 25% and effective is 11%.

Thanks so much!!

My employer relocated to CA when they hired me last April. Unfortunately, it took 9 months for them to “get set up” with the state and during that time I was paid as an independent contractor (MISC-1099) instead of an employee (W-2). My employer was very honest about this and said they will reimburse me for anything I shouldn’t have had to pay. So my question is what amount (for self-employment tax, etc) should I seek reimbursement from my employer for $33,465.65 compensation on a MISC-1099? If it matters, my marginal tax bracket is 25% and effective is 11%.’===========>It is really hard to tell you the accurate amount to be reimbursed by your ER; however, is the amount of $33465.65 is net earnings reported on Sch C line 29/ 31 or is the amount reported on Sch C line 1 PART 1? Did you have biz related expenses ? In general, as long as the amount on Sch C line 29 / 31 is $400 or exceeds $400 then yu need to file Sch A and also as long as the amount on Sch SE line 2 / 3 is ALSO $400 or exceeds $400, the nyou neeed to pay SECA tax to the IRS and you can deduct 50% of your SECA tax on 1040.

My taxes have already been done at H&R block. I just want another opinion before I approach my employer. The H&R Block accountant filed a Schedule C-EZ and a Schedule SE. So I guess my question is: if I had to pay $4,326 in self-employment tax on $33,465.65 wages, when those wages should have been paid to me as an employee not an independent contractor, would I approach my boss asking that they pay 50% of the self-employment tax ($4,326 x .5 = 2163)? I'm just trying to arrive at the right/fair figure to seek reimbursement. Thanks so much for your advice!!

“The H&R Block accountant filed a Schedule C-EZ and a Schedule SE.”==========You need to file Sch C-EZ as long as you have a profit from your biz and:your expenses are not greater than $5K; you have no EEs; you have no inventory, and you are not using depreciation or deducting the cost of your home you can use Sch C-EZ.

“ So I guess my question is: if I had to pay $4,326 in self-employment tax on $33,465.65 wages, when those wages should have been paid to me as an employee not an independent contractor, would I approach my boss asking that they pay 50% of the self-employment tax ($4,326 x .5 = 2163)?”==============>As long as you work the hours that they assign and using their equipment, you should be treated as an EE, have taxes withheld and be issued a W2 at the end of year.I guess you can talk to your ER on your issue(probably your ER already knows about the issue too). According to the IRS, the EE and ER are equally responsible to be sure the taxes are withheld, reported and paid.

“I'm just trying to arrive at the right/fair figure to seek reimbursement. “==========>As you discover the taxes were not withheld but SECA tax had to be paid on Sch SE, speaking to your ER might resolve the issue. But I am not sure I guess it is up to your ER.