hi, I received an employment sign on bonus from a headhunter for taking a new job. the employment agency sent me a 1099 misc putting the amount on box 7 (non employee compensation). Now the irs is suggesting that I might possibly owe self employment taxes. I'm not self employed. I just listed this on a sched c as I didn't know where to declare this income. It is very confusing in my opinion. Can anyone tell me what I should of done?? I'm starting to wish I never got this bonus....

Thanks

This income is reported on schedule C. How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor. (http://taxipay.blogspot.com/2008/03/w2-or-1099-employee-or-independent.html)

Sorry, but in the eyes of the IRS, you ARE self-employed and owe SE taxes.

Sorry, but in the eyes of the IRS, you ARE self-employed and owe SE taxes.

Thanks everyone for all the responces. I appreciate it.

I sent a responce to the letter I recieved and stated I didn't think I owe SE and requested them to call me as per the letter.... :(

So, any idea what will happen? I'll get a call? Surely I'll have to pay initerest and a penalty?

Thanks.

The IRS does NOT normally call the taxpayer.

You need to submit a rebuttal letter explaining your position and citing the appropriate portions of the Internal Revenue Code that supports your contention that you do NOT owe these taxes.

OR YOU need to call the IRS to discuss this issue. THEY will NOT initiate the call.