W2 Employee misclassified as 1099 contractor since 2021 - help recovering taxes paid to IRS through incorrect filing

I've been learning about the differences between W2 employees and 1099 independent contractors, and I think I've been filing incorrectly for years. I work for a small residential repair company that contracts with home warranty companies. My boss never gives me W2 forms or discusses taxes - he just calls it "piece work" and says I won't pay much in taxes and can deduct things like uniforms. But after doing research, I believe I'm actually a W2 employee because: - I drive a company vehicle (not my own) - The company pays for my gas with a company card - They purchase the supplies/parts for repairs - I have my own tools, but that's it - The boss determines my schedule and assignments He pays me through Zelle/Venmo directly to my bank account. Sometimes I collect service fees in cash (like $80) that I keep and log in my records. I've been filing taxes as a 1099 contractor using TurboTax and owing around $6500 each year. Now I have about $24,000 in tax debt to the IRS including penalties. I've set up a payment agreement but the late fees and interest keep building. I'm worried I've been doing this all wrong. Would my taxes be significantly lower if I had filed as a W2 employee? The company would have been responsible for paying half of the FICA taxes! For example, if a repair job is approved for $13,000 (about 50/50 in parts and labor) and the home warranty covers $3,300, my boss receives that amount and I might get paid $85 for the work. If a claim is denied, I still get paid for my time worked. The amount varies based on the complexity - I can make anywhere from $40 for a quick job to $500 in a day doing major repairs. Where do I start fixing this mess? I need to make a living but also need professional tax help before looking for a new job. Any guidance would be greatly appreciated!

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19 comments

Javier Morales

•8M

You're definitely being misclassified as a 1099 contractor when you're actually a W2 employee. The IRS has specific tests to determine worker classification, and from what you've described, you're clearly an employee: 1. You use company vehicles and equipment 2. The company controls when and how you work 3. They're directing your day-to-day activities 4. You're integrated into their business operations You need to file Form SS-8 (Determination of Worker Status) with the IRS. This form asks the IRS to make an official determination about whether you should be classified as an employee or independent contractor. At the same time, file Form 8919 (Uncollected Social Security and Medicare Tax on Wages) to report and pay only your portion of the FICA taxes that should have been withheld. The good news is you can potentially get back a significant amount of what you've paid since your employer should have been covering half of those FICA taxes (about 7.65%). Plus, they should have been withholding income tax throughout the year.

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Javier Morales

•8M

Filing the SS-8 will eventually notify your employer, as the IRS will contact them during their determination process. This could potentially create tension, so timing is important. You might want to secure other employment before proceeding if you're concerned about retaliation. That said, retaliation for filing an SS-8 could potentially be considered illegal. The IRS takes worker misclassification seriously because employers avoid paying their share of taxes by misclassifying employees.

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Emma Davis

•8M

After dealing with a similar misclassification issue last year, I discovered taxr.ai (https://taxr.ai) which was incredibly helpful. I uploaded my payment records, job descriptions, and texts from my boss, and their AI analyzed everything and generated a detailed report showing I was clearly a W2 employee according to IRS guidelines. The report broke down exactly which IRS factors applied to my situation and gave me specific language to use when filing my SS-8. They also provided templates for communicating with my employer about the misclassification before involving the IRS. This approach actually worked for me - my boss agreed to reclassify me after seeing the evidence laid out so clearly.

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Emma Davis

•8M

I got my analysis back within a day - it was surprisingly fast. They have this tool that scans all your documentation and applies the IRS classification rules automatically. As for getting money back, yes! I did get a significant refund for the previous two years. I had to file amended returns after the IRS determination came through, but it was absolutely worth it. I recovered about $4,800 in overpaid self-employment taxes since I had been paying both halves of FICA when my employer should have been paying their share.

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Malik Robinson

•8M

I was skeptical at first about taxr.ai, but I finally tried it after struggling with a similar misclassification issue for two years. The analysis was incredibly thorough - they identified 11 different factors from my situation that clearly indicated I was an employee, not a contractor. I used their report when filing my SS-8 with the IRS, and it made a huge difference. The IRS ruled in my favor within 3 months (which is lightning fast for them). I ended up recovering almost $8,900 in overpaid taxes from the past three years by filing amended returns. The documentation from taxr.ai made the whole process so much smoother than I expected.

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Isabella Silva

•8M

If you're planning to contact the IRS about this, good luck getting through to someone who can actually help! I spent WEEKS trying to get someone on the phone about my worker classification issue. Then I found Claimyr (https://claimyr.com) and watched their demo (https://youtu.be/_kiP6q8DX5c) - within 90 minutes I was talking to an actual IRS agent who specialized in worker classification issues. They connected me to the right department immediately instead of me navigating endless automated menus and waiting on hold for hours. The agent walked me through exactly what forms I needed and how to document my case. Saved me so much frustration during an already stressful situation.

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Isabella Silva

•8M

They don't just call for you - they use some kind of system that navigates the IRS phone tree and holds your place in line, then calls you when they've reached a human representative. You could keep calling yourself, but the average wait time is over 2 hours these days, and you might get disconnected multiple times before reaching someone. It's definitely not a scam. I was super skeptical too, but I was desperate after trying for weeks. They got me through to an actual IRS employee who specialized in worker classification cases, and she walked me through exactly what forms I needed to file and what documentation would strengthen my case.

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Ravi Choudhury

•8M

I need to eat my words about Claimyr. After my skeptical comment, I was still stuck on hold with the IRS for another 2 hours and got disconnected AGAIN. In frustration, I decided to try Claimyr and seriously - they got me through to an IRS agent in about 45 minutes. The agent I spoke with was incredibly helpful about my misclassification issue. She explained that I needed to file both the SS-8 and Form 8919 together, and also recommended I look into the Voluntary Classification Settlement Program since my employer seemed open to fixing the situation. This saved me so much research time and confusion. I've spent more time on hold with customer service for my internet provider than it took to get actual tax help from the IRS through their service.

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Freya Andersen

•8M

When you file Form 8919 with reason code G, you only pay the employee portion of FICA taxes (7.65%) instead of the self-employment tax rate (15.3%). You're essentially reporting the income as wages rather than self-employment income while your SS-8 is pending. If the IRS eventually determines you're actually an independent contractor, you might need to pay the difference later. But if they rule you're an employee (which sounds likely in your case), you won't have overpaid. It protects you from both penalties and overpayment while waiting.

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CosmicCadet

•8M

Don't forget about state taxes too! If you've been misclassified at the federal level, you're likely misclassified for state taxes as well. Most states have their own processes for worker classification issues, and you might be entitled to additional refunds from state taxes. In my case, after getting the federal determination, I was able to recover an additional $2,100 from my state tax overpayments. Check your state's department of labor website for the proper forms - many states take misclassification very seriously because they lose unemployment insurance and workers' comp premiums.

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CosmicCadet

•8M

Absolutely right about unemployment benefits! Also, proper classification means you're covered by workers' compensation if you get injured on the job. As a contractor, you'd be on your own for medical costs from workplace injuries. The other significant benefit is overtime pay protection. If you're working over 40 hours in a week as an employee, you're entitled to overtime pay in most cases. Independent contractors don't have this protection, which is why some employers try to misclassify workers.

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