Taxpayer asks:
Hello, I have a question concerning a 1099 . I work for a company full time and get a w-2 at the end of the year. I have been asked to work additional hours and know that they usually do not like overtime. Can i ask them to 1099 me at the end of the year for the additional hours? Can I use my ss # or would i need to maybe go under a dba name and tax id #?
Thanks so much for your help!
Taxgirl says:
If you’re doing the same kind of work under the same terms, you need to be paid overtime using your regular tax ID so that you can be issued a W-2 for the entire amount. You’re still an employee for that additional work.
I know that employers don’t like to pay overtime. Of course not. They have to pay more for the same work. But tough! If they’re going to ask you to work it, they need to pay you for it. Not only is it the right thing to do, it’s the law. There are employment laws that your employer might be violating by structuring your compensation differently to avoid overtime.
Besides, you’re just shorting yourself by taking the 1099 in this case. As a W-2 employee, your employer withholds your taxes and pays half of FICA (Social Security and Medicare) tax out of their pocket. If you accept a 1099 for this extra work, not only will you lose the benefit of your overtime rate, you will be stuck paying 100% of the FICA tax as SE tax – you’ll essentially be taking an additional 7% hit.
It sounds like you’re trying to be accommodating and I appreciate that. But don’t talk yourself into getting a bad deal in your efforts to be a good team player.
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
