[taxcuriosity]

Hi!

I was on F1 status while working for this organization. I didn't realized until I received a notice CP2000 that I was categorized as a contractor. Also, I misplaced the form 1099-MISC while filing for taxes so I couldn't add it in with the return.

The total income that 1099-MISC quotes that I earned during this time is around $8000, and CP2000 quotes that I owe IRS around $2000. I read quite a bit on what can be deducted as a contractor, but I don't see anything that I can deduct as I used to drive to them and work. However, I used my own computer(laptop) to work for them, so I'm hoping that this can be deducted?? e.g. for lease, software and depreciation?

One article I found online mentioned that F1-students are exempt from FICA(social security-12.4% and medicare-2.9) taxes, which comes out to 15.3% of the total taxes. When I take this percentage off the total income, it comes out to around $1200, which might mean I still owe IRS ~$1000.00. Am I correct? When I was actually employed, I didn't think I had to pay tax amount this high. I'd appreciate if I could get any suggestions. Thank you!

- Seeker

[MukatA]

When did you receive CP2000?

[taxcuriosity]

I don't remember the exact date, but I need to respond by 25th March. I tried and tried to find answers and it's too late when I found this site. If you're around, I'd appreciate if you could provide me some suggestions ASAP, as I'm about to send out a cover letter with the response form back tomorrow or Tuesday. Thanks!

[MukatA]

Yes, you must respond by 25th March.

CP2000 letter for under-reporting of income. The notice informs you of the proposed changes to income, payments, credits, or deductions; and the amount due to IRS, or refund due to you. It is normally a five to six page letter. The size of the notice varies according to the number of issues identified in your notice.

The first page of the CP–2000 is called the "Summary Page". It provides a brief summary of the notice and instructions on what you should do to determine if you agree or disagree with the proposed changes.

If you agree that the tax changes are correct, sign the response and return it in the enclosed envelope. You may pay the amount you owe within 30 days from the date of notice to avoid further interest charges, or you may send the signed consent without payment. IRS will bill you for the amount due plus additional interest.

If you DO NOT agree with part or any of the notice, DO NOT SIGN THE NOTICE. Instead, check Option 2 or 3, on the response page, explain why you do not agree in a signed statement, attach the statement and any supporting documents you want IRS to consider to the response page, and send it. Include your phone number with area code and the best time of day to call.

[taxcuriosity]

Thanks for the prompt answer MukatA, I really appreciate it.

Like you mentioned, I've done all the research I can on this subject matter, and I don't understand how I could owe IRS $2000+ for my earnings of $8000. I don't agree with this charge as they must've imposed FICA (Medicare + Social Security) taxes, which I don't need to pay in F1 status. How do I claim that? Do I send them copies of my status e.g. visa etc? Is that the supporting document you mentioned? Thanks!

P.S. Since I don't have much time, I'm leaving my Yahoo id here. If you use Yahoo please add me (goingtoocrazy) so that I can ask you questions real-time. Thanks again!

[MukatA]

Did you file nonresident tax return and Form 8843? If yes, then reply to CP2000 that you are exempt individual and your income is not subject to FICA taxes.

[taxcuriosity]

No I didn't file nonresident tax return, and neither did I file form 8843. I wasn't aware of the procedure of filing taxes, so I filed how everyone else did, using 1040NR. What's the next step? Thanks!

[taxcuriosity]

Correction on the last post - I did file as non resident, as 1040NR is for non-residents. However, I don't think I filed 8843 - what form is that?

[taxcuriosity]

I was able to find out about 8843, but my question still hasn't been answered completely. In my original post, I'd written some figures for FICA taxes (social security-12.4% and medicare-2.9) which totals to 15.3%. Are these figures still valid?

If 15.3% is true, do I need to pay the rest after deducting this off what IRS claims?

For example:
Earned income = 8000
IRS claims I owe = 2000
15.3% of 8000 = 1224
$ I owe = 2000 - 1224 = 776

Is above true? I'd appreciate any suggestions. Thanks!

[AtlantaTaxExpert]

Your figures were accurate.

What did you eventually work out with the IRS?