My old job did not send me a W2, they want to refund me the tax withholdings and send me a 1099.?

Question

Is that okay? Is there anything negative if I accept that offer?

Answer 1

They can not do that, Call the IRS and file a W2 complaint, do not accept any money from your prior employer, they are trying to get out of paying their share of SS tax by doing this. If they issue you a 1099 you will then be responsible for paying both your share and the employers share of SS tax and would have to report that income as self employment income

1-800-829-1040

Answer 2

If you were hired as an employee you should receive the W2. By agreeing to a 1099 you are an independent contractor and will owe the government more in SS withholding tax.
I would insist on a W2.

Answer 3

No, that's absolutely not okay. You were originally paid as an employee. Presumably, they've already paid in social security, medicare, federal and state withholding for you. Also, by being an employee, you may also be eligible for unemployment if your job is terminated. The arrangement that your employer is offering is not acceptable for many reasons: 1) what kind of goofball employer changes his mind after you've already been paid? Totally unprofessional. 2) if your withholding is refunded, what's this going to do to your income tax return? If you receive a 1099-MISC, you're going to be liable not only for the federal and state income tax, but also self-employment tax (if the 1099-MISC is for $400 or more). The self-employment tax is 15.3% of your income. You may be setting yourself up for underpayment penalties and interest.

Do NOT agree to this, and I would strongly recommend that you find work with a company who handles their employment liabilities legally.

Answer 4

Bull-o-ney!!!! No, it's not OK, and Yes there's a big negative, actually a couple of them. You'd have to pay 15.3% self-employment tax instead of paying just half of that for social security and medicare - if you are an employee, the employer has to pay the other half. Plus you'd be subject to penalties for not making quarterly payments.

If they were deducting taxes all year from your paycheck but not sending them on to the government, they now have a major problem. They are required to have sent them in on a regular schedule. The schedule depends on their size, and might be weekly, might be monthly, but sure isn't just once a year. They apparently didn't do this, since if they had they wouldn't be able to just refund it to you, they wouldn't have it any more - and now they're trying to wiggle out of it by changing your status to non-employee. The IRS does not look kindly on employers who fail to remit taxes withheld from their employees.

Call the IRS, or stop by their local office, and report this. The employer has done a number of illegal things at this point.

Answer 5

Yeah, there's a BIG negative! Your SS tax will double if you accept that offer. Employees pay 7.65% but self-employed folks pay 15.3%. On top of that, you'll pay penalties and interest for not making quarterly estimated tax payments during the year.

Do NOT let them do this to you! With the penalties and interest along with the extra SS taxes you'll have to pay, you'll be looking at upwards of a 20% CUT in your net income.

Tell them they're 2 weeks late on the W2 and you'll be filing a complaint with the IRS tomorrow if they don't get it to you NOW.

Answer 6

If you accept the money from an employer you screw yourself out of Social Security money..I lost several thousand dollars doing just that..For every dollar that is taken out of your pay( for SS ) the employer has to add an equal amount. I would call the IRS and explain what the employer is trying to do..He is doing something illegal..The IRS will give you good advice...They will probably audit that sneaky SOB..

Answer 7

I would refuse the offer and request the W-2. If they do not comply I would contact your state revenue department.

I want to add that your state revenue department is who your employer is filing their state payroll reports to. These reports are filed quarterly. If your employer is not wanting to pay your federal taxes, they probabably are not paying your state payroll taxes.The IRS is not the only revenue department involved in payroll taxes collections. Although the IRS is a very good option they oversee 50 states, your state department of revenue only oversees one. It is much easier to accomplish payroll matters with a local agency. With the Irs you will wait on hold for at least 20 mins. just to get you call answered and then transferred several times trying to find an answer. I have seen the IRS take at least a year to even detect or correct a problem.

Answer 8

Yes there is a negative, it would mean you would have to pay self employment taxes. It sounds like they are trying to save themselves money by not claiming you as an employee which means they have to pay taxes for you (simplified explanation).

I wouldn't take it. Bad idea for you.

Answer 9

This doesn't sound right since the January 31st, deadline has come and gone. Call the IRS and find out your rights.

Answer 10

sue those bitches for all they are worth