Filed as 1099 contractor since 2021 but I'm actually a W2 employee - need help recovering what I paid to IRS

I've been going through a tax nightmare and just realized my employment status has been wrong for years. I've been filing as a 1099 independent contractor since July 2021, but I'm actually a W2 employee based on my working conditions. I work for a small residential repair company that contracts with home warranty companies. My boss never gave me W2s or discussed taxes - he just calls it "piece work" where I make more on bigger jobs. He hinted I wouldn't pay much in taxes and could deduct things like uniforms. The reality is: I drive a company vehicle, use a company gas card, they purchase repair supplies, and I just use my personal phone for work calls and GPS. I get paid through Zelle/Venmo directly to my bank account, plus I keep some cash service fees (like $65-80) that I log as income. I've been filing through TurboTax as a 1099 contractor each year, which has resulted in me owing about $12,500 in income taxes. I've set up a payment agreement, but they're still sending me letters about late fees and interest. My pay varies wildly - I might make $65 for a $10,000 repair where the home warranty only covers $2,500, or $40-50 for two hours if a claim is denied. Some days I can make $85 for a 30-minute job or up to $400 for major repairs. Would my taxes be significantly lower if I filed correctly as a W2 employee? Do I have any way to recover what I've overpaid? Should I speak with a CPA before looking for a new job? I'm totally overwhelmed by this situation and don't know where to start.

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20 comments

Omar Fawaz

•8M

Based on what you've described, you're absolutely right that you've been misclassified. The IRS uses something called the "right-to-control test" to determine worker status, and driving a company vehicle, using company-provided supplies, and having your boss control how the work is done all point strongly to you being a W2 employee, not a 1099 contractor. Here's what you should do: First, file Form SS-8 (Determination of Worker Status) with the IRS. This form asks the IRS to officially determine whether you're an employee or independent contractor. Also file Form 8919 (Uncollected Social Security and Medicare Tax on Wages) with your tax return to report the income you received that wasn't properly reported on a W-2. The good news is you can potentially get refunds for the last three tax years by filing amended returns (Form 1040-X) once your status is clarified. As a W2 employee, your employer should have been paying half of your Social Security and Medicare taxes, which is about 7.65% of your income - that's a significant amount!

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Omar Fawaz

•8M

Yes, filing Form SS-8 will trigger an IRS investigation where they'll contact your employer, so you should be prepared for that conversation. Many people wait until they've secured other employment before filing, but remember that it's illegal for an employer to fire you in retaliation for asserting your proper tax classification. The determination process typically takes 6-8 months in my experience. While you're waiting, you can still file Form 8919 with your current year's return which allows you to pay only the employee portion of Social Security and Medicare taxes rather than the full self-employment tax.

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Diego Vargas

•8M

I went through something really similar last year! My boss was paying me through Venmo for "consulting" when I was clearly an employee (fixed schedule, company equipment, etc). I was stressed about the huge tax bills until I found https://taxr.ai and uploaded all my payment records and communications with my boss. Their system analyzed everything and confirmed I was misclassified, then guided me through exactly what forms to file. They helped me understand that as a contractor I was paying both halves of FICA taxes (15.3%) but as an employee I should only pay half, with the employer covering the other half. After filing the right forms, I got back almost $4,000 from the previous years' overpayments!

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Diego Vargas

•8M

The service does both - it explains what each form is for and gives you line-by-line guidance on how to fill them out correctly. For the 8919, it helped me choose the right reason code and calculate the exact amounts for each section. It basically turns what would be hours of research into a 20-minute process. Regarding the employer situation, I was actually planning to leave anyway, so I waited until I had another job lined up before filing. My old boss was definitely upset when the IRS contacted him, but by then I was already at a new company. If you're worried about that, the system will give you strategies for timing your filing to protect yourself.

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StarStrider

•8M

Just wanted to follow up about my experience with https://taxr.ai since I was skeptical at first. I ended up trying it and wow - total game changer for my situation! I uploaded my Venmo payment history, text messages with my boss about job duties, and some photos of me using company equipment. The analysis confirmed I was 100% being misclassified as a contractor when I was clearly an employee. They generated a complete report I could show to both the IRS and my tax preparer, with specific tax code references highlighting exactly why I qualified as an employee. I did end up finding a new job first (smart move), then filed the forms as recommended. Just got my first refund check for last year's overpaid self-employment taxes! Going to file amendments for the previous years next month. Really wish I'd known about this sooner.

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Sean Doyle

•8M

I was in an almost identical situation two years ago. The worst part was trying to reach the IRS to get clarity on my options. I literally spent DAYS on hold only to get disconnected or told to call back later. I finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c which showed how they could get me connected to an actual IRS agent. I was super skeptical but figured it was worth trying since nothing else was working. It was wild - they had an IRS agent on the phone with me in about 25 minutes when I'd been trying for weeks on my own. The agent walked me through exactly which forms to file and confirmed I could recover taxes from previous years through amended returns. She even flagged my account with notes about my situation so future calls would go smoother.

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Sean Doyle

•8M

They use an automated system that basically waits on hold for you. When they get an IRS agent on the line, they call you and connect you directly to the agent. It essentially does the waiting for you so you don't have to sit with a phone to your ear for hours. Yes, it absolutely works! The system navigates all the IRS phone menus and waits through the hold times. You just go about your day, and they call you when an actual human IRS agent is on the line. The agent I spoke with was super helpful with my misclassification situation and guided me through all the forms I needed.

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Luca Romano

•8M

I need to apologize and follow up on my skeptical comment about Claimyr. I was completely wrong and feel kinda bad about doubting them so hard. After posting here, I was still fighting with the IRS about my own misclassification situation and getting nowhere. I broke down and tried https://claimyr.com out of pure frustration. I was literally connected to an IRS agent in 37 minutes when I'd been trying for weeks to get through. The agent was super helpful and confirmed I could file Form 8919 to avoid paying the employer portion of FICA taxes I shouldn't have been responsible for. She also explained how to properly document everything so I could recover taxes from previous years. Just filed my amended return yesterday. Seriously a life-changing service for anyone dealing with tax issues - especially complicated ones like worker misclassification.

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Nia Jackson

•8M

Yes, in many states when an employer is found to have misclassified workers, they can be required to make retroactive contributions to the unemployment insurance fund. This establishes your eligibility history if you ever need to claim benefits. Regarding overtime, that's another huge potential recovery area! Under the Fair Labor Standards Act, employees (but not contractors) are entitled to overtime pay of 1.5x your regular rate for hours worked beyond 40 in a workweek. You might have a significant wage claim that goes beyond just the tax issues. When you talk to a CPA or attorney, make sure to bring up potential unpaid overtime - there's typically a 2-3 year lookback period for those claims depending on your state.

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CosmicCruiser

•8M

I actually managed to do this! The key was approaching it from a "this benefits both of us" angle instead of making it confrontational. I showed my boss an article about how misclassification penalties can be severe (like 100% of unpaid taxes plus interest), but that the IRS has voluntary classification settlement programs where employers face much lower penalties if they self-correct. Framing it as "I'm trying to help us both avoid bigger problems down the road" worked well. Maybe try that approach with your uncle?

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Isaiah Thompson

•5M

The advice here about Forms SS-8 and 8919 is spot-on, but I want to emphasize something crucial: document EVERYTHING before you file anything with the IRS. Take photos of the company vehicle you drive, save screenshots of any text messages about work assignments, keep records of the company gas card usage, and document how your boss directs your work. Also, calculate how much you've been overpaying in self-employment taxes. As a 1099 contractor, you're paying 15.3% in self-employment taxes (both employer and employee portions of Social Security and Medicare). As a W2 employee, you'd only pay 7.65% with your employer covering the other half. On $12,500 in taxes, that difference could be substantial. One more thing - consider consulting with an employment attorney, not just a CPA. Worker misclassification often involves more than just tax issues. You mentioned varying pay and potentially working long hours - there could be minimum wage and overtime violations too. Many employment attorneys work on contingency for these cases, meaning you don't pay unless you win.

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Daniel Rogers

•19h

This is incredibly helpful advice! I'm new to this community but dealing with a similar situation. Can you clarify what you mean by "contingency" for employment attorneys? Does that mean they take a percentage of any settlement or recovery? And how do you even find attorneys who specialize in worker misclassification cases - is there a specific type of employment law I should be searching for? Also, when you mention documenting everything - should I be worried about taking photos of company property? I don't want to get in trouble for that while I'm still employed there.

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