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You should definitely file the SS-8! I was in almost the exact same situation last year - worked as an "after school coordinator" at an elementary school, got paid hourly, they controlled all my work, but they gave me a 1099. I filed the SS-8 in April after filing my taxes and got a determination in December that I was indeed an employee. Filed an amended return with Form 8919 and got back about $1400 in self-employment taxes I shouldn't have paid. My employer was initially annoyed but ultimately had to fix their classification system for everyone. They couldn't legally fire me for filing, though things were awkward for a bit. Regarding your 2021 situation - yes, you should have filed taxes on that income since the threshold for self-employment income is only $400.
Did you keep working there while the SS-8 was being processed? I'm worried about the awkwardness but really can't afford to pay that extra tax. Was the amended return process complicated?
Yes, I continued working there the whole time. It was definitely awkward for a few weeks after they received the IRS letter asking for their side of the story. My supervisor made a few passive-aggressive comments but nothing they could actually fire me for. By the time the determination came through, they'd mostly gotten over it. The amended return wasn't too difficult. I used Form 8919 with code G (I believe) since I had already received a favorable SS-8 determination. Then filed a 1040X showing the difference. It took about 3 months to get my refund after amending. One tip - include a copy of your SS-8 determination letter with your amended return to speed up processing. And remember, the employer will be responsible for paying their portion of the Social Security and Medicare taxes that they should have been paying all along.
Has anyone here used TurboTax to file the amended return after getting a favorable SS-8 determination? I'm in a similar situation but not sure which tax software handles this scenario best.
I wouldn't recommend TurboTax for this specific situation. I tried using it for my worker misclassification amendment and it didn't handle Form 8919 well at all. I ended up using FreeTaxUSA which was much better for this particular scenario and way cheaper too.
Don't forget that if you're self-employed, you should probably be making quarterly estimated tax payments throughout the year instead of paying it all in April. This is something I learned the hard way my first year - got hit with an underpayment penalty because I waited until tax time to pay everything. For next year, look into Form 1040-ES and the schedule for quarterly payments. It's usually April 15, June 15, September 15, and January 15 of the following year. It spreads out the pain and avoids those penalties!
Wait, I had no idea about this quarterly payment thing! So for THIS tax year I'm filing now, I just need to pay by the April deadline, but for next year I should be making payments every quarter? Is there a minimum amount you have to owe before this is required?
Yes, for the current tax return you're filing now, you just need to pay your full tax bill by the April deadline. But going forward, you should plan to make quarterly estimated tax payments. The general rule is that you need to make quarterly payments if you expect to owe $1,000 or more in taxes when you file your return. Alternatively, if your withholding and payments cover at least 90% of your current year tax or 100% of your previous year's tax (110% if your income is above $150,000), you won't face penalties. Most self-employed people with significant income end up needing to make these payments to avoid underpayment penalties.
Is there any way to set up a payment plan if you can't pay the full amount by the deadline? I'm in a similar situation but just started my business and don't have all the cash available right now.
Yes, the IRS offers installment agreements if you can't pay your full tax bill by the deadline. You can apply online through the IRS website if you owe less than $50,000 (combined tax, penalties, and interest). The key is that you MUST file your return by the deadline even if you can't pay. Then apply for the payment plan right away. You'll still pay some penalties and interest, but they're much lower than if you don't file or don't set up a formal payment arrangement. The process is fairly straightforward - the online application takes about 15-20 minutes to complete.
I think the confusion might be about the tax YEAR versus the tax SEASON. If your 1099-R is for 2024, you file it during the 2025 tax season (which is happening now) when you're doing your 2024 taxes. Sometimes people get confused and think "next year" means the 2025 tax year (which you would file in 2026). Make sure you're clear on which year TurboTax is referring to when it says "next year.
That's a really good point! I went back and looked at the exact message again. It specifically said I didn't need to report this distribution "until next tax season" - which would mean the 2026 filing season for 2025 taxes. That seems wrong since my form is clearly marked 2024. I'm going to go through the TurboTax questions again and see if I made an error somewhere. I definitely want this reported on my 2024 return since I've already paid a lot in taxes this year.
That's exactly what I suspected. TurboTax is saying to file it "next tax season" which would indeed be wrong for a 2024 form. When you go back through, pay special attention to any questions about rollover periods or special distribution types. Sometimes a single wrong answer can send TurboTax down an incorrect path. Also check Box 7 on your 1099-R - the distribution code there is crucial for determining how it's taxed. Codes like "1" mean a normal taxable distribution, while others may have special rules.
Does anyone know if there's a difference in how you report 1099-R distributions depending on the type of retirement account? I have both a traditional 401k and a Roth IRA that I took money from last year.
Yes, there's a huge difference! Traditional 401k withdrawals are generally fully taxable (you'll get a 1099-R with code "1" or "7" in Box 7). But for Roth IRAs, it depends on whether you're withdrawing contributions or earnings and how long you've had the account. If you're withdrawing contributions from a Roth IRA, those come out tax-free because you already paid tax on that money. If you're withdrawing earnings before age 59Β½ and before the account is 5 years old, those might be both taxable and subject to penalties.
Don't forget to tell your teammates about Form 8843! ALL international students on F-1 visas need to file this form even if they had ZERO income. It's super important and often forgotten. Also, many universities have VITA (Volunteer Income Tax Assistance) programs that specialize in helping international students. Check if your accounting department or law school runs one - they often have special training for 1040NR preparation.
Form 8843 is submitted with the 1040NR if the student is also filing a tax return. If they don't need to file a tax return (no income), then Form 8843 is sent by itself to the IRS. The deadline is the same as the regular tax deadline - April 15th (or the extended deadline if they file for an extension). Just make sure they keep copies of everything they submit since international students often need tax filing records for visa renewals or future immigration applications.
Be careful with athletic scholarships for international students! The tax rules are extra complicated. Some parts might be subject to 30% withholding instead of normal tax rates if they don't qualify for treaty benefits.
THIS. The athletic scholarship issue is so important. My university got in trouble because they weren't properly withholding on athletic scholarships for international students. The housing and meal portions are considered taxable income.
Jade Lopez
Another option you might not have considered: check last year's tax return if you claimed the childcare credit then too. The EIN would be listed on Form 2441 that you filed. You can get a transcript of your previous returns on the IRS website pretty easily.
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Alice Coleman
β’That's really smart! I did claim them on last year's taxes so the EIN should definitely be on my old Form 2441. I'll check my copy of last year's return tonight. If I can't find my copy, is the transcript free to get from the IRS website?
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Jade Lopez
β’Yes, getting your tax transcript from the IRS website is completely free! Just go to IRS.gov and search for "Get Transcript Online." You'll need to create an account if you don't already have one, and they'll verify your identity with some security questions. Once you're in, you can request a "Tax Return Transcript" for the previous year. It should show up immediately and you can download it as a PDF. Form 2441 will be included, and line 1 should have the provider's name, address, and EIN. Super easy and definitely faster than waiting for the IRS on the phone.
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Tony Brooks
Just a heads up - if you absolutely cannot find the EIN, the IRS does allow you to still claim the credit! You'll need to show you made a "reasonable effort" to get it (document your attempts) and fill out Form W-10. There's a special procedure for this situation specifically because so many small daycares close without providing proper documentation.
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Ella rollingthunder87
β’This happened to me 2 years ago. I wrote "BUSINESS CLOSED" in the EIN field and attached a statement explaining my attempts to locate the information. The IRS accepted it without any issues.
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