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Should these be on a 1099-NEC?

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  • Should these be on a 1099-NEC?

    We got a surprise 1099-NEC from my husband's employer and I'm trying to figure out if it is correct. He started officially with the practice as an employee on July 1st, but started moonlighting for them remotely about a year prior. 2019 income was paid on a 1099. In 2020 they started paying him on a W-2 and taking taxes out, even before he started full time. I'm not sure why--we figured it was to make the year's taxes easier. Thus, the surprise when the 1099 showed up.

    We asked what the amount included and were told:

    --A moonlighting payment that was deposited in our accounts Jan 3, but earned in 2019

    --A "catchup" payment of 2019 moonlighting earnings deposited in March of 2020--still trying to understand what their definition of this is.

    --Moving expenses reimbursement (move happened in June of 2020 for the start of his position as an onsite employee)

    Obviously this is quite the little tax bomb and I'm questioning a couple things:

    --Aren't moving expenses for a new hire supposed to be paid out on a W-2?

    --Is being paid as a contractor and an employee concurrently legitimate? I thought you had to be one or the other? The Jan 3 payment on a 1099 might be legit, but he was literally paid on a W-2 for work in February and then received this "2019 catchup payment" in March? I'm really annoyed that those weren't reported on 2019's 1099 as we were on a fellowship income that year and the total tax burden would have been much lower.
    Last edited by MSooner; 03-02-2021, 04:24 PM.
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