Misclassified as Independent Contractor - Boss saving money while I'm stuck with huge tax bill?

So this is unfortunately common and your CPA isn't completely wrong, but there are some options worth looking into. When you're misclassified, you end up paying both the employee and employer portions of FICA taxes (Social Security and Medicare), which is around 15.3% total instead of just the 7.65% employees normally pay. The Form 8919 "Uncollected Social Security and Medicare Tax on Wages" is indeed what you'd use to report this situation. If the IRS agrees with your classification, they would collect the employer's share from the company, not you. However, the process can be lengthy and there's no guarantee of success. Another option is filing Form SS-8 "Determination of Worker Status" where the IRS will make an official determination about whether you should have been classified as an employee. This can take 6+ months but establishes an official record. For your current situation, you might be able to file an amended return using these forms, but you'd want to discuss the potential benefits versus the risk of audit with your CPA. The lookback period for this kind of issue is typically 3 years.

After dealing with a similar misclassification nightmare last year, I tried everything until I found taxr.ai (https://taxr.ai) and it was a game-changer. Upload your documents and their AI analyzes your specific situation regarding contractor vs. employee misclassification. I was hesitant at first, but they showed me exactly which of the 20 IRS classification factors applied to my situation and generated the proper documentation for my SS-8 and 8919 forms. Their analysis pointed out specific evidence from my work arrangements that strengthened my case - things I wouldn't have thought to include. What impressed me most was how they explained the whole misclassification process in plain English and gave me a step-by-step plan for addressing it, including how to approach filing an amended return to recover some of those taxes.

Update: I was the one who asked about taxr.ai and my boyfriend's situation. I convinced him to try it last week and wow - they identified 8 specific factors that clearly show he was misclassified! They helped us prepare SS-8 and 8919 forms with really detailed evidence (emails from his boss giving specific hours, requirements to attend company meetings, etc). The best part was they showed us exactly how to calculate how much he overpaid - almost $4,300! We filed the forms yesterday and now we wait, but their guidance made it so much easier than what our tax guy told us (which was basically "too bad, nothing you can do"). Really wish we'd known about this last year before we just paid everything without fighting it.

If you're still dealing with this misclassification issue and need to talk to someone at the IRS (which you probably will), good luck getting through to them! I spent THREE DAYS trying to reach someone about my similar situation last month. I finally found Claimyr (https://claimyr.com) and it was seriously worth it. They got me connected to an actual IRS agent in under 30 minutes when I'd been trying for days. You can see how it works at https://youtu.be/_kiP6q8DX5c The agent I spoke with was super helpful and walked me through exactly what forms I needed to file for my misclassification case. They even advised me on what specific documentation I should gather to strengthen my claim. Saved me hours of frustration and probably got me better information than I would've found online.

Ok I need to eat my words about Claimyr. After my skeptical comment, I decided to try it myself since I've been getting nowhere with the IRS about my own tax situation (not misclassification, but a different issue). I was 100% convinced it wouldn't work but I was desperate after spending HOURS on hold last week. To my complete shock, I got connected to an IRS agent in about 25 minutes. The agent pulled up my file and actually resolved my issue during that one call. For what it's worth to the original poster - I asked about contractor misclassification while I had them on the phone, and they confirmed that filing Form SS-8 and 8919 is exactly the right approach. The agent said they've seen many cases where people got significant portions of their tax bills reduced after proper determination.

Had a similar issue back in 2023. One thing to consider: if you file Form SS-8, be prepared for potential blowback from the employer. When the IRS contacts them about the determination, some companies get defensive or even hostile. In my case, I waited until I had another job lined up before filing the forms, which was smart because my former employer tried to badmouth me to other companies in our industry after they got hit with back taxes. Just something to consider since you mentioned they converted you to W-2 this year and you're presumably still working there.

Just wanted to add that the penalties for failing to file quarterly estimated taxes as an independent contractor can be pretty significant too. Did your CPA mention anything about requesting a penalty abatement since you were misclassified and didn't know about the quarterly requirement? The IRS has a First Time Penalty Abatement policy that could potentially waive those failure-to-pay penalties if you have a clean compliance history. Might be worth asking about, especially if you're getting hit with both the misclassification AND penalties for not making quarterly payments.

This is exactly why I always tell people to document EVERYTHING when they suspect they're being misclassified. I went through this same situation two years ago and learned the hard way that the IRS looks for very specific evidence when making their determination. Some key things that helped my case: emails showing my boss setting my daily schedule, proof that I used company equipment exclusively, documentation that I couldn't subcontract my work to others, and evidence that I was required to attend company meetings and training. The more concrete evidence you have showing you were treated like an employee (not an independent business), the stronger your SS-8 and 8919 claims will be. Also, don't let your CPA's initial response discourage you. Worker misclassification cases are actually quite common and the IRS has established procedures for exactly this situation. If your CPA isn't familiar with these forms, consider getting a second opinion from someone who specializes in employment tax issues. A $17,000 tax bill is definitely worth fighting for, especially when you have a good case.