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5. How do I get money back if I already filed my re- tax deduction, self-employment health insurance deduction, or
turn? a Keogh-type retirement plan deduction.
You must file Form 1040X to receive a refund or credit toward D. Changes (increase or decrease) to any tax or credit comput-
any unpaid taxes. Generally, a refund is only possible if you ed on your adjusted gross income such as the alternative min-
initially calculated and paid SE Tax on the income or if your imum tax, earned income credit, or credit for child and depen-
employer issued you a Form W-2 showing the employer paid dent care expenses since some of the changes mentioned in A
your FICA tax. See question 11 for instructions on amending through C of this question affect your adjusted gross income
your return. and/or your taxable income.
9. What form do I use to calculate FICA tax?
6. What if I reported my Form 1099-MISC income on
Schedule C and claimed expenses? Individuals whose employment status is in dispute or who have
been determined to be employees by IRS can use Form 8919
Schedule C cannot be used to report your income since wages to calculate FICA tax on the income that has been determined
earned by an employee are reported on line 7 of Form 1040. to be wages. Completion of Form 8919 will also ensure that you
You must file an amended return to reflect the correct amount of receive credit for this income with the SSA. You should attach
tax under your status as an employee. The change to employee it and a copy of the determination letter to your original return
status may increase your tax because you will now compute or amended return.
FICA tax on your gross wages instead of computing self-em-
ployment tax on the net income. Furthermore, any expenses 10. What if I’m getting bills for my taxes that will be
you deducted from the income on Schedule C must now be
deducted as miscellaneous itemized deductions on Schedule affected by my new status as an employee?
A, subject to a 2% limitation. Some of the expenses may no The IRS will continue to send bills until you file an amended
longer be deductible. Publication 529, Miscellaneous Deduc- return or until you pay the amount due. When your amended
tions, will help you determine which expenses can be claimed return has been processed, your tax and any interest or penalty
on Schedule A. charges will be changed as appropriate. The determination of
your work status will not stop the billing process or change your
Self-employed individuals are also allowed a deduction on tax due until you correct or file your Form 1040. File your Form
Form 1040 in an amount equal to one- half of SE tax. As an 1040X, and Form 8919, and a copy of your determination letter
employee, you are not entitled to this deduction and any oth- (or other documentation showing you were determined to be
er deductions you were allowed because you treated yourself an employee), with the Campus specified in the Form 1040X
as self-employed, such as the self-employed health insurance instructions. Also, please inform the IRS office that has been
deduction and the deduction for contributions to a Keogh-type sending you bills that you have filed the amended return. If you
retirement plan. Your taxable income is affected by these are on an installment payment plan, you should continue mak-
changes, and as a result, the income tax due is adjusted. See ing payments until your amended return has been processed
question 8 for additional information. and you have been notified by IRS whether there is any balance
due.
7. What if I still have other unrelated business income
to report on Schedule C? 11. How do I amend my tax return?
If your Schedule C included income from a source unrelated to To complete your amended return, you will need a copy of your
your determination as an employee, you remain responsible for original return and a copy of any amendments made since you
SE tax on that income and should continue to report the income originally filed your return. If amendments have been made, you
on Schedule C. File an amended return to make the chang- should use these figures instead of the figures from your origi-
es described in Question 6 above, but also complete a new nal return. Use these figures in column A of your Form 1040X.
Schedule C that reports the unrelated business income and the In Column C of your Form 1040X, fill in the correct information
expenses attributable to that income. You must also complete to reflect your status determination as an employee. To arrive
a new Schedule SE, Self-Employment Tax, to compute self-em- at these figures you may find it helpful to complete a new Form
ployment tax on the new net income. In addition, on page one 1040.
of Form 1040X, you will need to adjust any deductions you
may have taken for one-half of the self-employment tax, the If you are recalculating your taxes on a new Form 1040, report
Keogh retirement plan deduction, or the self- employed health the full amount of the 1099-MISC income as wages on line 7
insurance deduction as they relate to the remaining Schedule and compute the employee portion of FICA tax using Form
C income. 8919. If you deducted expenses against this income on your
Schedule C when you originally filed, you may be able to move
8. Will I get back all the Self Employment Tax I paid? the expenses to Schedule A if they meet the employee busi-
ness expense criteria. Report these expenses on Form 2106,
No. The amount of your refund or decrease in tax is affected by Employee Business Expenses, as miscellaneous deductions on
the changes you make on your amended return. These changes Schedule A (see question 6 above). Please note that you can
may include: take the standard deduction instead of using Schedule A, if it is
A. The amount of FICA tax you owe compared to the self-em- to your advantage (the standard deduction may be higher than
ployment tax you originally computed. your Schedule A deductions).
B. Whether or not any of the business expenses you originally Column B of the Form 1040X is the difference (increase or de-
reported on Schedule C can be transferred to your Schedule A crease) between columns A and C. If you are moving expenses
since you can no longer use Schedule C to report the income. from Schedule C to Schedule A, be sure to attach your Sched-
C. The removal of deductions you were entitled to as someone ule A and Form 2106 to your amended return. If you must cal-
treated as a self-employed individual such as the one-half of SE culate your share of FICA tax, please also attach Form 8919.
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