BHoffman Posted March 19, 2019 Report Posted March 19, 2019 Client received a 1099M and a W2 from his employer. Tells me the 1099M was for a Christmas bonus, and employer did this for some stupid reason. I can enter this to Sch C, but what about the QBI deduction? Quote
Medlin Software, Dennis Posted March 19, 2019 Report Posted March 19, 2019 My preference is to hand the mess to the employer for clean up, or have the employee report it (properly) as W2 wages, pay the taxes owed, and let the government handle collecting the employer amounts. Just because the employer made a mistake, the employee and their dependents should not be penalized. IRL, the employee likely wants to keep their job, so the employee will ask to will have to be handled as some sort of earned income... in a way which does not cause the employer to get dinged. As I get closer to SS age, and more importantly, as my wages count for my daughter's disability amount, there are similar mistakes in my youth which I wish I could undo. Thus, my hard line on this of dumping it on the employer, with the understanding not all will do so to avoid "rocking the boat". 1 Quote
Lee B Posted March 19, 2019 Report Posted March 19, 2019 1 hour ago, BHoffman said: Client received a 1099M and a W2 from his employer. Tells me the 1099M was for a Christmas bonus, and employer did this for some stupid reason. I can enter this to Sch C, but what about the QBI deduction? Just because the Employer screwed up doesn't magically create a QBI deduction. 4 Quote
Medlin Software, Dennis Posted March 19, 2019 Report Posted March 19, 2019 9 minutes ago, Abby Normal said: 8919 code H Likely the proper end result, but offer the employer a chance to fix it first, if the employee is still working for the same employer, and wishes to remain so. 3 Quote
Catherine Posted March 20, 2019 Report Posted March 20, 2019 3 hours ago, Medlin Software said: Likely the proper end result, but offer the employer a chance to fix it first, if the employee is still working for the same employer, and wishes to remain so. There is a difference between what is technically correct, and what is as close as one can come given a particular set of circumstances. What is likely to happen - at most - is a tentative suggestion from employee to boss saying some version of "my accountant says next year this should go through payroll" with no request to change it for this past year. 3 Quote
Edsel Posted March 20, 2019 Report Posted March 20, 2019 Agree with Catherine. If the employee tries to make an issue of this, nothing will happen. Even if reported to the IRS, nothing will happen. People believe the IRS will act upon some party triggering a sloppy information return mess and clean it up. Instead they will view this as some problem laid on their desk, and they won't act on the extra work this causes them. The only work they do is whatever is delegated to them. 1 Quote
Abby Normal Posted March 20, 2019 Report Posted March 20, 2019 The 8919 also saves the employee one half of the SE tax. Quote
GingerM Posted March 20, 2019 Report Posted March 20, 2019 I had a similar situation earlier this year. I explained the differences between F8919 and Sch C. My client decided to pay both halves so Sch C was filed. This was NOT eligible for S199A. 3 Quote
BHoffman Posted March 20, 2019 Author Report Posted March 20, 2019 I did exactly as GingerM says. The client opted to report on Sch C with no S199A. Thanks everyone! 2 Quote
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