How should I file for taxes if I was incorrectly classified as a 1099 worker? 2 Answers as of January 27, 2011

My former employer incorrectly classified me as a 1099 and the department of labor informed them that they are to reclassify me as a regular employee. Who is liable for the taxes not withheld.? My employer or me? How do I file my taxes, as an independent contractor or an employee?

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Steven J. Fromm
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
The best possible scenario would be to wait for the employer to issue you a W-2. Note, however, that since there was no withholding of income tax, you will still owe the income taxes due. As for the social security and Medicare issues, this may depend on the DOL determination. At a minimum, the employer must match the amount that should have been withheld as that is clearly its responsibility. However, as to the amounts of SS and Medicare that should have been withheld from your pay, there is no clear answer from your facts. You should discuss this with the DOL. As far as filing your income tax return, you may want to get an extension so that you can see how all of this plays out, then you can file accordingly. Otherwise you may have to file an amended return if you file based on the Form 1099. In any event, you need to estimate your income taxes due for 2010 and pay that in with your timely extension request to minimize interest and penalties.
Answer Applies to: Pennsylvania
Replied: 1/27/2011
LT Pepper Law
LT Pepper Law | Luke T. Pepper
You are responsible for the taxes as well as the employer. You will need to sit down with your accountant to work out a strategy.
Answer Applies to: Pennsylvania
Replied: 1/26/2011
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