chadw Posted April 5, 2008 Report Share Posted April 5, 2008 Client received bonus from his employer for about 10k. He is a W-2 employee with the firm. The firm he works for asked him if he would like his money right away or wait until his next paycheck. Of course he said right away and so therefore they cut him a check. Well they didn't withhold any taxes from the check and they 1099-Misc. (box 7) for the amount. He is still currently employed with the firm as of now. I don't think he should owe self-employment taxes on this, but I do feel as though he has to pay his portion of SS & Med. Would a 8919 or a 4137 be appropriate in this case. If so which one and if a 8919 is needed, which code should be put in? Thanks Quote Link to comment Share on other sites More sharing options...
michaelmars Posted April 5, 2008 Report Share Posted April 5, 2008 I THink using either one might make this the last bonus he ever gets from this company Quote Link to comment Share on other sites More sharing options...
chadw Posted April 5, 2008 Author Report Share Posted April 5, 2008 I'm sure your right. I'm sure the employer won't be happy if they get a call or bill for the other half of the taxes. Quote Link to comment Share on other sites More sharing options...
JohnH Posted April 5, 2008 Report Share Posted April 5, 2008 If you recommend this course of action, be sure you are prepared to explain to him why it was a good idea to get fired over an $800 tax savings. It might be a hard sell. Quote Link to comment Share on other sites More sharing options...
chadw Posted April 5, 2008 Author Report Share Posted April 5, 2008 If you recommend this course of action, be sure you are prepared to explain to him why it was a good idea to get fired over an $800 tax savings. It might be a hard sell. I am going to recommend doing a schedule c and see if there are any unreimbursed expenses that may be around to help lower that amount. I will let him know about the 8919 and tell him the potential consequences of going that route, but I may just leave that decision up to him. The overall liability difference is about $450. I don't think it's worth the battle with the employer, but I was just curious what other opinions were on the issue. Thanks Quote Link to comment Share on other sites More sharing options...
JohnH Posted April 5, 2008 Report Share Posted April 5, 2008 So he earns in the high 80's if I'm reading your post correctly. I'd give him the options in writing and point out the risks in BOLD PRINT. Quote Link to comment Share on other sites More sharing options...
jainen Posted April 5, 2008 Report Share Posted April 5, 2008 >>I don't think he should owe self-employment taxes<< That's very interesting, I'm sure, but what does your CLIENT think? He's the one who chose this gig, and just maybe he figures 10 G's isn't something to make a fuss about. Quote Link to comment Share on other sites More sharing options...
Bart Posted April 5, 2008 Report Share Posted April 5, 2008 I will let him know about the 8919 and tell him the potential consequences of going that route, but I may just leave that decision up to him. I think you must leave the decision up to the client. Quote Link to comment Share on other sites More sharing options...
indyscott Posted April 6, 2008 Report Share Posted April 6, 2008 PUNT! Quote Link to comment Share on other sites More sharing options...
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