[spudmonkey43434]

Hello,

First time here, thanks for your help in advance. I have 2 questions:

1. The company I work for pays w-2 wages and also 1099 wages to the same employee (s). Is that legal. I thought you were supposed to run all compensation paid to one individual, through W-2's.

2. In 20 years the company has never issued 1099's for the commissions that they paid. Are they not liable for the back taxes that were possibly not paid especially their share of fica and other related taxes?

Again, thanks for your help and warmest regards,
Larry

[AtlantaTaxExpert]

Larry:

Do not jump to conclusions.

1) It is perfectly normal for a company to pay wages under the W-2 and to reimburse expenses under the Form 1099-MISC. So getting BOTH forms does not mean they are paying the same payments under two different forms.

2) If they are making commission payments without reporting said payments to the IRS (either under Form 1099 or FormW-2), then, yes, THAT is illegal.

Do not know whether the employer is liable for the FICA payments. It depends on the nature of the employment and the nature of the commissions.

Different industries have different standards.

Retail sales normally reports commissions earned using Form W-2, with FICA, state and federal income taxes withheld.

Real estate agents, however, are normally treated as independent contractors and received Form 1099-MISC, with NOTHING withheld.

Again, it depends!

[Fr_Chuck]

Payments to 1099 employees don't get any taxes withheld, and the company does not pay matching funds to FCIA. On 1099 worker status, the employee if commissions, would often pay that.

I am a 1099 person, for all the sales I do, in that there is nothing held out, I do not get covered by unemployment, and I have to pay full self employment taxes myself, which is why 1099 income has to be much higher than a normal hirely wage would normally be.

[MukatA]

How you will treat the 1099-Misc income, read: Your U.S. Tax Return: W2 vs 1099-Misc: Employee vs Independent Contractor.