Preparing and filing taxes is the responsibility of every US citizen. An employee earning may find the tax deductions in their paycheck. It is the employer who holds some amount to complete payroll taxes. It is the employer’s responsibility to file for medicare and social security taxes on their behalf. The taxes depend on the employment status of the individual. However, things can go south when the firm unintentionally classifies you as an independent contractor or self-employed. In that scenario, the individual has to file the IRS Form 8919.
So, the next question arises why 8919 form?
Why IRS form 8919?
There are many taxes US citizens pay. However, the business pays your taxes when you work as their employee. The taxes include:
- Social security tax.
- Medicare tax.
The employee doesn’t have to bear the burden of tax deductions. But when the business misclassifies the employee as a self-contractor, then the individual will have to pay the self-employment taxes. The individual will now fall under a totally different tax structure and have to pay 15.3 % of the self-employment tax rate. Therefore, to resolve the discrepancies in medicare and social security taxes, you will have to pull out the IRS form 8919.
In short, workers must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, if they did not have Social Security and Medicare taxes withheld from their wages.
Employees will use Form 8919 to determine the amount they owe in Social Security and Medicare taxes. Individuals can credit all Social Security benefits to their Social Security account by completing Form 8919.
Who Should Fill Out IRS Form 8919?
In the following situations, an employee should consider filling out Form 8919.
- If you have filed Form SS-8.
- When you are working under a company that does not fit under the IRS definition of an independent contractor.
- If you received a determination from the Internal Review Service confirming your employment status or if you have not yet received a response by tax time.
- If you received a W-2 and a 1099-MISC from the same organization in the same tax year. The 1099-MISC payment should be included as salary on the W-2.
- When you are working as an employee and taxes, have not been withheld from your salary.
Here are the reason codes on form 8919. The employee should correctly adhere to the IRS 8919 instructions.
- A – In case you receive a letter stating that you are an employee of this company after submission of Form SS-8.
- C – The IRS informed me in prior correspondence that I am an employee.
- G – I sent Form SS-8 to the IRS, but I haven’t heard back.
- H – This company sent you a Form W-2, a Form 1099-MISC, and/or a Form 1099-NEC for 2022.
How to Fill IRS Form 8919?
Forms can be full of complexity. Firstly, one has to identify that they are eligible to fill it out, and the next thing that arrives is the essential information needed to fill out the form.
Here is the step-by-step explanation of each line in form 8919.
Declare your identity
- The individual who fills up and submits this form must first provide their full name.
- If the person filing the form is married, their spouse must fill out a separate application in the event that they also need to fill out the form.
Enter your social security number
In the next step, write your own Social Security Number in the right corner of the form.
Fill the table accurately
- The name of the company you previously worked for should be entered in Column A.
- The federal identification number of the business, commonly known as the EIN, FTIN, or FEIN, should be in Column B.
- Now, fill in the reason code in column ‘c.’
- Moreover, an individual must include the date of any correspondence from the Internal Revenue Service in column “d.”
- In column ‘e,’ mention receiving the forms 1099-MISC or 1099-NEC, or both.
- Moreover, in column ‘f,’ you must add information like the total pay received without withholding Social Security or Medicare taxes and not reflected in Form W-2.
Sum up every piece of information from lines 1 to 5 in column ‘f’. Now, fill in the summed amount in line 6.
What is your wage?
Line 8 requires that all social security earnings, tips, RRTA compensation, and unreported tips are subject to social security tax.
Add and Subtract
Subtract line 8 out of line 7 and enter the value in line 9. If the value of line 8 is more than line 7, then enter “0” in line 9.
Social Security tax for employees
- Fill line 10 with the wage that is subject to social security tax.
- Line 11 will contain the result of total multiplying the amount in line 10 by the social security tax rate, i.e., 0.062.
- Multiply the amount in line 6 by the Medicare tax rate, i.e., 0.0145, and write it in line 12.
Complete the form
Lastly, in line 13, add the amount in lines 11 and 12, and write in the blank area.
If you need assistance in filing any tax form, then you should hire professional tax services.
Frequently Asked Questions
Form 8919 is for Uncollected Social Security and Medicare Tax on Wages. An individual need to fill out the form if his/her employer has classified him as an independent contractor.
● You provided services to an organization.
● Your part of the social security and Medicare taxes was not deducted from your income by the employer.
● You did not provide the services to a firm as an independent contractor.
The file Form SS-8 is for Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. The SS-8 form determines the A worker’s status as an employee or an independent contractor. Therefore, apart from the 8919 Form, employees also have to fill SS-8 form.
When you don’t fill out the 8919 forms, even when you are a full-time employee in a firm, then you have to bear the full taxes on your own. The company will not pay your payroll taxes, and as a misclassified self-employed person, you will have to pay 15.3% of taxes.