Taxes time $$
 

What’s the correct way to report the 22k bonus? As self employment/contractor since they put it on 1099 box 7 and not on W2? My CPA is suggesting doing it as Form 8919 with reason code H in column (c) but the bonus was received before we got hired so I’m not sure if this is the correct option.

You have a CPA? You aren't even at mainline yet.

In all seriousness, you should probably do what your CPA tells you to do.
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lol exactly why I need to save every penny! Doing it the CPA way basically says that C5 should of reported the money on W2 and that they screwed it up (that’s how I understand it at least). On the other hand, it’s not exactly self employment either so wondering how others have dealt with it in the past

I’d be very leery about listening to tax advice from any pilot.

If you can't trust the advice of your CPA, perhaps get another CPA that you can trust. Why else would you be paying for a CPA?

I’m doing it through Turbo Tax and they have an option where a CPA can walk you through it. I am just looking for information to make sure I get it right the first time regardless of where or who I do it with. I wonder why the company would pay it using 1099-Misc and use nonemployee compensation section?

Because you're not an employee when it's paid. The company pays it outside the CBA so once you're on property, you aren't eligible for any signing bonuses.

Ah, that makes more sense. Didn’t sound that way the way your OP was worded. I use turbotax as well and can see why you might not trust a generic CPA answering questions that probably isn’t giving your situation his full attention. That said, I’d still trust his advice over anyone posting here.

Oh that makes sense. If this is the case then, there should be no problem doing form 8919 option H which states “I received a Form W-2 and a Form 1099-MISC from this firm for 2019. The amount on Form 1099-MISC should have been included as wages on Form W-2. (Don’t file Form SS-8 if you select reason code H.”? The other option would be self employment which I don’t see how this would qualify under that

Honestly folks spend the $100 to have your taxes professionally prepared. It’s well worth the money.

I get that but just trying to gather knowledge instead of just blindingly believing what a CPA might say. Option a, filing it as self employment, would make me pay self employment fees which is relatively expensive (in my case it would make a difference of $5000 fee vs a refund). Option b, makes me blame the company and petition IRS to query them why they didn’t report it on W2 and risk ****ing someone off. So just wondering what people did in the past to make an informed decision

You've probably read these but it seems to be common for companies to report bonuses on the 1099C.

https://ttlc.intuit.com/community/ta...self/00/708455

I came across this and this is what the CPA is suggesting I do and what I want to do also. It seems as if the company does not want to pay their half of the 15% tax penalty and hence why they made sure it was received prior to DOH. I just don’t see how a bonus that comes with a contract could be considered self employment but like others have said I will let the professionals decide

Your CPA is correct. A company cannot pay you a bonus (which is a form of compensation for doing your regular job) on a 1099. Whether or not you’ve been entered into their payroll system yet (or whatever reasoning they use) is completely irrelevant. See also IRS Rev. Rul. 2004-109.

You also correctly observe that by filing form 8919, you are basically telling the IRS to go get their money from your employer. This may not make your employer happy.

Ideally you’d ask for a corrected W-2 with the bonus included. They will likely decline.