How to handle 1099-Misc, I reiceived it after I left my company

Question

I need some help. I am stuck in a unique situation i.e. my earlier company was supposed to give my bonus but it was stuck due to some conflict. After I had left that company they agreed and paid my bonus, but since I had already left the company this amount did not show up in the W-2 form, instead they sent me 1099-Misc. Now, this amount shows up as a non-employee money and since it had no deduction for social or medical taxes, I do not know how to handle it. Can someone give me tips to handle this situation. Please note, I had used TaxAct to fill my tax details, but it does not provide me option to handle this problem. Any help would be appreciated. Thanks!

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Tony Cox · Accepted Answer

What is a substitute W-2 & how does this work?

It seems to me that if the bonus was earned when this fellow was an employee, it's W-2 income and his employer ought to be paying the 2nd 1/2 of the SS and Medicare tax, not him. He may possibly have an unnecessary estimated tax penalty too. Also, wouldn't creating a substitute W-2 (however that works) indicate to the IRS that his old company is misclassifying workers by paying them as ICs?

Surely the best thing to do here would be to first contact the company and get them to correct their mistake? Most of the answers in this thread put the onus (and the extra tax) on the poor fellow who just got his bonus!!

How to handle 1099-Misc, I reiceived it after I left my company

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