Deadbeat employer --- how is this handled???


M

MB_

Ok, my daughter lives in California. She had an employer who
was bad news. Basically, she got paid $300 in wages and got
stiffed the last $150.

Other employees did not get paid too.

I have suggested that she seek compensation via small claims
court of the Labor Board.

But there remains a tax question:

What does she do if:

1) She gets no W-2 form.

2) If she gets an incorrect W-2 Form

Also, I think the employer might have treated her as an
independent contractor. But her hours were well defined. It
was a performing arts school and she helped out teaching
there. She had specific hours. So, again, how is this
handled?

MB
 
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S

Stuart Bronstein

MB_ said:
Ok, my daughter lives in California. She had an employer who
was bad news. Basically, she got paid $300 in wages and got
stiffed the last $150.

Other employees did not get paid too.

I have suggested that she seek compensation via small claims
court of the Labor Board.
Small claims court and the Dept. of Labor are different
things. For wage claims the Dept. is the better place to
go. In addition to asking for unpaid wages, she should ask
for a statutory penalty which is equal to 30 days (working
days, no calendar days) of salary.
Also, I think the employer might have treated her as an
independent contractor. But her hours were well defined. It
was a performing arts school and she helped out teaching
there. She had specific hours. So, again, how is this
handled?
She should apply for unemployment. They'll sort out whether
she was an independent contractor or should have been
treated as an employee.

Stu
 
R

rick++

You report the income on schedule C. And pay Social
Security tax if it was not withheld.

Chances are if the employee does not receive a W-2 or 1099
for this amount, it was not reported to the feds either.
But they still want to know about all unreported income.

The sum of these small amounts may qualify for a credited
Social Security quarter (nearly $1000 for a quarter). Each
credited quarter allows you to collect disability or
retirement sooner than if you didnt have it. So that may be
another reason to report the income.
 
M

MB_

rick++ said:
You report the income on schedule C. And pay Social
Security tax if it was not withheld.

Chances are if the employee does not receive a W-2 or 1099
for this amount, it was not reported to the feds either.
But they still want to know about all unreported income.

The sum of these small amounts may qualify for a credited
Social Security quarter (nearly $1000 for a quarter). Each
credited quarter allows you to collect disability or
retirement sooner than if you didnt have it. So that may be
another reason to report the income.
Why do you report the income on Sched. C???

Mel
 
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A

Arthur L. Rubin

MB_ said:
Ok, my daughter lives in California. She had an employer who
was bad news. Basically, she got paid $300 in wages and got
stiffed the last $150.

Other employees did not get paid too.

I have suggested that she seek compensation via small claims
court of the Labor Board.

But there remains a tax question:

What does she do if:

1) She gets no W-2 form.

2) If she gets an incorrect W-2 Form
If she IS an employee, then she should read tax tip 2004-23:
<http://www.irs.gov/newsroom/article/0,,id=107470,00.html>
"What to Do If You Haven't Received a Form W-2"
(I assume the tip will be reissued for 2005, but probably
not until early February)

and form 4852, "Substitute for Form W-2, Wage and Tax
Statement". (I'm not sure what the procedure is for
wages reported but not paid. I think 4852 covers that
issue, as well, but I'm not certain.)

If she's an independant contractor, she should report
whatever she received on Schedule C, regardless of what
the "employer" reported, either on a W-2 or a 1099.
 

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