We don't know. YOU'RE the one with the documents. The IRS does not generate 1099s - someone else submitted the 1099 TO the IRS. It would appear that you had some self-employment income that you failed to include on your tax return - that's what "nonemployee" compensation means.
by Woof - a day ago
Ah, the mysterious 1099 MISC form. I wish I had a nickel for every time someone asked me about that. I'm going to answer your questions in reverse order, I think it will make more sense that way. First, non-employee compensation means that you did work for the company as an independent contractor. Maybe you did some freelance work for them before they actually hired you--that's one possibility. I had another case where a woman worked for a government agency and she received a W2 for her job. But--part of her work was funded by as special grant and they paid her for that as a 1099 employee. She now keeps really good records of which part of her job is what, but that was kind of strange. Normally, you don't get a W2 and a 1099 non-employee compensation from the same company-but it can happen. Now if you get the 1099 MISC for non-employee compensation, that is automatically considered by the IRS to be self employment--in which case you are taxed for 15.3% for your self employment taxes PLUS tax at your regular rate. What you can do: First, make sure the income really is yours. Since you did receive W2 income from the employer, go ahead and ask about the 1099. I've worked on a few returns where the company sending the 1099 made a mistake (it's rare, but it does happen.) Second, assuming that the income is yours and you were supposed to claim it, look to see if you have any job expenses against that income. We often have job expenses for our W2 jobs that we can never write off because there are so many other pieces to the puzzle--but, with Schedule C income (which is what you've got there) you can write off your expenses directly against the income. That would reduce the amount of extra tax you pay. I've attached two links, one about contract labor and one about claiming business expenses.
by Jan Roberg, EA - a day ago
Techinically, this was not your "previous employer." Employers issue W-2s, not 1099-Misc forms. "Non-employee" comensation means that the money was paid in a work context, but not to an employee. To the IRS's eyes, it triggers the 15.3% tax. If your employer issued you both a W-2 *and* a 1099-Misc, they screwed up. They were supposed to put everything they paid you on a W-2 and ensure that the 15.3% fica/mc was paid. Since they didn't, the IRS is expecting you to pay the 15.3% for them. (That's $226 of the $400.) The extra income is also subject to income tax...and penalties and interest. While you can call the old employer and ask what the money is for, you are kind of stuck. You can fight this out with the IRS using form 8919 and SS-8, but that will only save you $104.
by Quick Answers - a day ago
apparently you did not report this $1600(and you didn't get a 1099 from IRS, you got a CP2000 probably reporting the missing 1099) if you worked for the same employer and had a previous 1099 from him you probably need to contact him and find out why there is an additional $1600 that you were not aware of nonemployee compensation means you were paid as an independent contractor, should have filed Sch C on that income etc. you may have reported your income on Line 7, wages, and they were not
by tro - a day ago
4 Ways Tech Will Transform Shopping
Serial entrepreneur and investor Karim Hijazi has an insider’s perspective on cybersecurity, hacking, and botnets. As CEO of...
Landing Page Design: Rules Of Thumb Your Boss Expects You To Know
A landing page is a webpage that encourages visitors to your site to download a digital offer (an eBook, tip sheet or white...
A Franchise That Develops Leaders Was Just What This Military Veteran Was Looking For
Franchise Players is Entrepreneur’s Q&A interview column that puts the spotlight on franchisees. If you’re a...
The Best Google Analytics Reports For Improving Your Website
Google Analytics isn’t just for knowing how much traffic your website is getting, your top pages, and how your traffic...
How to Leverage Social Media Marketing to Enhance Brand Recognition
You would be hard-pressed to find a professional who will tell you that social media marketing is a newfangled idea that...
6 Essential Elements Of A Modern Website Redesign
New technologies, tools, advancements in mobile, and the power of social media have altered the online landscape over the...