Jump to content
ATX Community

Christmas bonus on 1099M box 7 *&^% :(


BHoffman

Recommended Posts

My preference is to hand the mess to the employer for clean up, or have the employee report it (properly) as W2 wages, pay the taxes owed, and let the government handle collecting the employer amounts.  Just because the employer made a mistake, the employee and their dependents should not be penalized.

IRL, the employee likely wants to keep their job, so the employee will ask to will have to be handled as some sort of earned income... in a way which does not cause the employer to get dinged.

As I get closer to SS age, and more importantly, as my wages count for my daughter's disability amount, there are similar mistakes in my youth which I wish I could undo.  Thus, my hard line on this of dumping it on the employer, with the understanding not all will do so to avoid "rocking the boat".

  • Like 1
Link to comment
Share on other sites

1 hour ago, BHoffman said:

Client received a 1099M and a W2 from his employer.  Tells me the 1099M was for a Christmas bonus, and employer did this for some stupid reason.  I can enter this to Sch C, but what about the QBI deduction?

Just because the Employer screwed up doesn't magically create a QBI deduction.

  • Like 4
Link to comment
Share on other sites

3 hours ago, Medlin Software said:

Likely the proper end result, but offer the employer a chance to fix it first, if the employee is still working for the same employer, and wishes to remain so.

 

There is a difference between what is technically correct, and what is as close as one can come given a particular set of circumstances.  What is likely to happen - at most - is a tentative suggestion from employee to boss saying some version of "my accountant says next year this should go through payroll" with no request to change it for this past year.

  • Like 3
Link to comment
Share on other sites

Agree with Catherine. 

If the employee tries to make an issue of this, nothing will happen.  Even if reported to the IRS, nothing will happen.

People believe the IRS will act upon some party triggering a sloppy information return mess and clean it up.  Instead they will view this as some problem laid on their desk, and they won't act on the extra work this causes them.  The only work they do is whatever is delegated to them.

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...