Employer hasn't withheld any taxes and I should have gotten a W2 instead of 1099 - can I fix this for 2023-2024 taxes?
I started a job last January (2023) and told my boss right away that I wanted to pay all my taxes properly. They said their accountant told them to just give me a 1099 at the end of the year. After doing some research online, I realized this isn't right - I should be getting a W2 since I'm clearly an employee (set schedule, they provide equipment, they tell me exactly what to do, etc). The problem is they haven't been withholding any taxes this whole time! I earned about $38,000 last year, and now I'm worried about the tax situation. I don't want to cause problems with my employer, but I also don't want to get hit with a huge tax bill or penalties. Is there any way for this to be fixed for the 2023 tax year? Should I just pay all the taxes that should have been withheld to make things right? Or is there a way my employer can correct this situation? Really appreciate any advice since I'm totally confused about what to do now!
19 comments
Join the conversation
Savannah Weiner
You're right to be concerned. Based on what you've described, it sounds like you're being misclassified as an independent contractor (1099) when you should be classified as an employee (W-2). This is actually a pretty common issue. For 2023, you have a few options. You can file Form SS-8 with the IRS to request a determination of your worker status. You can also file Form 8919 "Uncollected Social Security and Medicare Tax on Wages" with your tax return. This allows you to report your income as wages and only pay the employee portion of Social Security and Medicare taxes (instead of the full self-employment tax rate). Just be aware that filing these forms will likely trigger your employer to be contacted by the IRS, which could affect your working relationship. Before going that route, it might be worth having an honest conversation with your employer about the situation and explaining that misclassification could actually create bigger problems for them than for you.
0 coins
Levi Parker
•Thanks for explaining this. If OP files those forms, would they still be responsible for paying estimated quarterly taxes for 2024 while waiting for the IRS determination? And would the employer potentially face penalties for the misclassification?
0 coins
Savannah Weiner
•If they file the SS-8, they should still make estimated tax payments for 2024 while waiting for the determination to avoid underpayment penalties. The IRS determination process can take 6+ months, so it's better to be safe. Yes, the employer could face significant penalties for misclassification, including the employer's share of FICA taxes (both retroactively and going forward), potential penalties for failure to withhold income tax, and additional penalties if the IRS determines the misclassification was intentional rather than a good-faith mistake.
0 coins
Libby Hassan
I went through something eerily similar last year and found an incredible tool that helped me sort through the mess. I stumbled on https://taxr.ai when I was desperately searching for help with my misclassification issue. The service analyzed my situation, confirmed I was misclassified, and gave me a detailed report about exactly which forms to file and how to approach my employer about the situation. It saved me thousands in potential self-employment taxes and gave me the confidence to have that awkward conversation with my boss. I'd definitely recommend checking it out since they specialize in sorting through these employee vs. contractor classification issues. The report they generated even cited the specific IRS rules that applied to my situation.
0 coins
Hunter Hampton
•Does it actually work with this specific situation though? I'm in a similar spot and worried about confronting my employer. Did you end up having to pay the employer portion yourself or were they willing to fix it?
0 coins
Sofia Peña
•I'm a little skeptical of online tax tools since my situation always seems more complicated than what they can handle. Would this work if I've already received a 1099 and my employer is insisting that's correct? How customized is the advice?
0 coins
Libby Hassan
•It absolutely works for this specific situation - the tool actually has a dedicated module for worker classification issues. I showed my employer the report which clearly outlined why I met the IRS definition of an employee, and they agreed to reclassify me going forward. For the previous year, we worked out an arrangement where they covered half of what should have been the employer portion of taxes. The advice is very customized. You answer questions about your specific work situation (who controls your schedule, who provides equipment, etc.), and it generates a personalized analysis based on the actual IRS criteria for employee vs contractor status. Even if you've already received a 1099, the tool outlines your options for filing Form SS-8 and Form 8919 to potentially avoid paying the full self-employment tax.
0 coins
Sofia Peña
Just wanted to update that I decided to try taxr.ai after my skeptical questions. Honestly, I'm impressed with how thorough it was. The system asked me detailed questions about my working relationship - things I hadn't even considered as relevant to employee vs contractor status. The report I got clearly showed I was misclassified according to the IRS standards, and it gave me a step-by-step plan for how to handle both my 2023 taxes and how to approach my employer about fixing it for 2024. It even provided a script for having that conversation without creating bad feelings. Best part - my employer actually agreed to reclassify me after seeing the report! We're still working out how to handle 2023, but at least going forward I'll be properly classified as a W-2 employee. Total game changer for my situation.
0 coins
Aaron Boston
If you're planning to contest this with the IRS (which it sounds like you probably should), you're going to want to get someone on the phone at the IRS to discuss your specific situation. Good luck with that though - I spent WEEKS trying to get through to someone about my misclassification issue. Then a friend recommended https://claimyr.com to me. You can see how it works here: https://youtu.be/_kiP6q8DX5c but basically they wait on hold with the IRS for you and call you when an agent picks up. Saved me literal hours of hold time, and I was able to get clear guidance on exactly how to file my forms for my situation. The IRS agent I spoke with walked me through the whole process and confirmed I was doing everything correctly. Absolutely worth it when dealing with something as important as employment classification.
0 coins
Sophia Carter
•How does that even work? Seems weird that they can somehow get through faster than regular people. Does the IRS actually allow this kind of service?
0 coins
Chloe Zhang
•Sorry, but this sounds like a scam. No way anyone can magically get through the IRS phone lines faster. They just take your money and you still end up waiting forever. I tried something similar once and it was a complete waste.
0 coins
Aaron Boston
•It's actually quite simple - they use technology to stay on hold for you. You enter your phone number, and their system calls you when an IRS agent picks up. They don't get through any faster than you would, they just save you from having to listen to hold music for hours. And yes, it's completely legitimate. The IRS doesn't care who waits on hold - once you're connected with the agent, you're the one speaking directly with them. The service just bridges the call to you when a human answers.
0 coins
Chloe Zhang
I have to eat my words and apologize for my skepticism about Claimyr. After feeling desperate about my own tax situation, I decided to try it despite my doubts. I was absolutely shocked when I got a call back in about 40 minutes saying they had an IRS agent on the line. I was connected immediately and got to speak with an actual IRS employee who reviewed my situation in detail. The agent confirmed I needed to file Form SS-8 for the worker classification determination and Form 8919 with my return. She even explained exactly how to fill them out for my situation and what documentation I should keep on hand. Would never have gotten this level of specific guidance without actually speaking to someone. Honestly didn't think it would work, but I'm really glad I tried it.
0 coins
Brandon Parker
Has anyone considered that the employer might be doing this intentionally to save money? By classifying workers as 1099 contractors, they avoid paying: - Their portion of Social Security and Medicare taxes (7.65% of your wages) - Federal and state unemployment taxes - Workers' compensation insurance - Benefits like health insurance, paid time off, etc. It's a common tactic for companies trying to cut corners. The IRS takes misclassification seriously because they lose out on proper tax collection. Your employer should know better - especially if they have an accountant advising them.
0 coins
Adriana Cohn
•This is a really important point. My previous employer did this exact thing, and it wasn't an "accident" - it was calculated. When multiple employees filed SS-8 forms, the company ended up getting audited and had to pay massive penalties plus back taxes for everyone they had misclassified. They also had to pay everyone back for the extra self-employment taxes we'd paid.
0 coins
Brandon Parker
•Exactly. The savings for employers can be substantial - typically around 20-30% of payroll costs. That's why the IRS has been cracking down on this practice. For anyone in this situation, it's worth knowing that the law has protections against retaliation for workers who file SS-8 forms or otherwise challenge their classification status. That doesn't mean it won't create tension, but you do have legal protections if your employer tries to fire you specifically for raising this issue.
0 coins
Jace Caspullo
I'm confused about one thing - if you file those forms and the IRS determines you should've been classified as an employee, does that mean you'll get a refund for the extra self-employment taxes you paid? Or are you just out that money?
0 coins
Savannah Weiner
•If the IRS rules in your favor after filing Form SS-8, they'll typically assess the employer for their share of the FICA taxes (the 7.65% employer portion). You would file Form 8919 with your return to only pay the employee portion rather than the full self-employment tax rate. If you've already filed and paid the full self-employment tax, you can file an amended return to claim a refund for the difference once the determination is made. Just be aware that the SS-8 process can take 6+ months, so you might need to initially pay the higher amount and then amend later.
0 coins
Jace Caspullo
•Thanks for explaining. That makes sense. I'll go ahead and file both forms then since it sounds like I can eventually get back the extra I paid if the determination goes in my favor.
0 coins