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Employment settlement: 1099 or W-2?
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Date: August 25th, 2017 5:32 PM Author: hateful station i'm helping a friend out with an employment suit. settlement is in the mid-5 figs. employer sent settlement draft saying settlement amount is subject to applicable witholdings which means w-2 to me.
this is bullshit and it should be 1099, right? |
Date: August 25th, 2017 5:41 PM Author: Henna 180 hospital Are you representing him? Should be a 1099 since it includes your cut as well. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067801) |
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Date: August 25th, 2017 5:58 PM Author: federal onyx sweet tailpipe You can get out of the payroll tax for that but attorney's fees are taxable as income to the plaintiff. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067912) |
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Date: August 25th, 2017 5:49 PM Author: federal onyx sweet tailpipe Pretty sure only physical injury damages are non taxable. Check IRC sec. 104. Some employment discrimination was tax free back in the day but they changed it like 20 years ago. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067847) |
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Date: August 25th, 2017 5:50 PM Author: trip love of her life kitchen they're taxable on income tax, the q is whether employment FICA taxes also come out (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067853) |
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Date: August 25th, 2017 5:58 PM Author: hateful station cq. this is exactly what i'm asking. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067914) |
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Date: August 25th, 2017 6:01 PM Author: federal onyx sweet tailpipe It should be split like he said. Your fees and non wage injuries on a 1099 (your bro will pay income tax on this) with wages on a w2 (income plus payroll taxes). (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067935) |
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Date: August 25th, 2017 6:02 PM Author: hateful station the settlement is a small fraction of the alleged damages. why cant it all be non-wage injuries. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067944) |
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Date: August 25th, 2017 6:03 PM Author: trip love of her life kitchen were giving you the answer. if you want to fight it good luck. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067949) |
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Date: August 25th, 2017 6:05 PM Author: hateful station that's typical in these cases?
can we reasonably say 40% attorney's fees, and 75% of the remainder is non-wages. that means 15% is w-2 and 85% is 1099 |
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Date: August 25th, 2017 6:08 PM Author: trip love of her life kitchen In California, with the insane statutory penalties, you *might* be able to get away with this with a straight face (although wtf at charging a buddy 40%). Might as well offer it and see what they say. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067962) |
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Date: August 25th, 2017 6:11 PM Author: hateful station would compensatory damages for title vii discrim be lost wages assuming it's not emotional distress? (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067974) |
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Date: August 25th, 2017 6:04 PM Author: federal onyx sweet tailpipe Doesn't pass the smell test to me, but I'm not an employment guy. Not sure what u can get away with. If u do 100% 1099 and it triggers an audit you'll almost certainly lose. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067952) |
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Date: August 25th, 2017 6:26 PM Author: Blue national This. JFC at xo2017 (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34068025) |
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Date: August 25th, 2017 5:49 PM Author: trip love of her life kitchen That's an area for negotiation. At least they should give you 50/50, sometimes even 30/70. IRS won't let it be 100% 1099. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067852) |
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Date: August 25th, 2017 5:50 PM Author: Aquamarine mediation sanctuary i think it has to be w2 to the extent it covers wage claims over what would be w2 income, and labor code penalties/fees on top of that are 1099. but a lot of this is FMA and tax/employment master men would be better suited to answer questions (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067860) |
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Date: August 25th, 2017 5:59 PM Author: hateful station cant we just say it's all emotional distress and labor code penalties?
employer doesnt want to pay FICA either. |
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Date: August 25th, 2017 6:01 PM Author: trip love of her life kitchen nah IRS will ding you if you try to allocate 100%. Your guy probably dgaf but it's not worth the risk to the employer. there's some insanely boring documents out there for you to read if you want.
https://www.irs.gov/pub/irs-lafa/20133501f.pdf https://www.irs.gov/pub/irs-pdf/p4345.pdf https://www.americanbar.org/groups/young_lawyers/publications/the_101_201_practice_series/tax_consequences_of_settling_an_employment_claim.html |
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Date: August 25th, 2017 6:04 PM Author: hateful station ive read some of these docs. they dont exactly say that the settlement cant be 100% emotional distress and punitives and penalties. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067951) |
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Date: August 25th, 2017 6:06 PM Author: trip love of her life kitchen That's fine but unless you're negotiating with a clueless shitlawyer (which happens) both the employment-side attorney and the company accountants are telling them do not accept a 100% 1099 settlement, it's not worth the risk. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067956) |
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Date: August 25th, 2017 6:13 PM Author: fragrant location filthpig Emotional distress doesn't cut it - it has to be due to physical injury (including emotional distress arising from physical injury) (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067980) |
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Date: August 25th, 2017 6:15 PM Author: hateful station that's wrong. emotional distress due to physical injury is NON-TAXABLE. all other emotional distress is still non-wage income.
im asking about w2 vs 1099. not income vs. non-taxable |
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Date: August 25th, 2017 6:15 PM Author: Aquamarine mediation sanctuary emotional distress would make it nonwage income, thus 1099 instead of w2, eliminating FICA. different distinction. (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34067990) |
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Date: August 25th, 2017 6:36 PM Author: erotic comical cruise ship I thought these things were all fraud and ascribed like 95% of the damages to pain and suffering to keep it non-taxable (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34068071) |
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Date: August 28th, 2017 3:05 PM Author: hateful station is this negotiated? it's in everyone's interest right? (http://www.autoadmit.com/thread.php?thread_id=3711652&forum_id=2#34086031) |