<skull_leader7[at]yahoo.com> wrote:

- quote -

If you get a response from anyone who really knows what they
are talking about, listen to them and not to me; but just in
case you don't...

I had the same situation a few years ago. I negotiated a
settlement on backpay, but neglected to require them to make
the relevant payroll tax payments or issue a W2; so they
simply sent me a check.

I talked to 4 accountants and the IRS about what to do, and
got 5 different opinions.

I decided to call it self-employment income and pay the full
payroll taxes on it myself. Since it is pay (I am assuming
yours was all pay, rather than penalties) the taxes must be
paid, and if they didn't pay them, you have to; and the only
reasonable way to do that is by calling it self-employment
pay. Odds are you can call it miscellaneous income and
simply pay the income tax on it, and skip the payroll taxes,
but I don't like to try to get away with things where the
IRS is concerned.

- quote -

That certainly is self employment income.

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skull_leader7[at]yahoo.com wrote:

- quote -

Since this is your first time, let me alert you that if you
want to, you can very probably put 20% of this
self-employment income into a simple Keogh plan, *before*
taxes, and such that it continues to earn *tax-deferred*
income until retirement -- and you can probably do this
independently of whatever other employer retirement plans
you have, and how much you're putting into them.

For $200 it may not be worth the (fairly small) trouble and
expense of getting suitable advice and setting up such a
plan; but if you continue to earn such independent income in
future years, hey, every little break helps.

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A few questions on how to report various types of income.

1. A class action lawsuit relating to unpayed overtime
against my employer was settled last year. As part of the
settlement, I received two checks. One, was a regular
payroll check, for 50% of the settlement amount, minus the
usual withholdings, and was reported on my W2. The other
check was for the remaining 50% of the settlement amount and
did not have any taxes withheld at all, and does not show up
on my W2, but I know I need to pay taxes on this amount as
well. Where do I report this income on the 1040 or related
forms?

2. For the first time last year, I also did some independent
consulting for which I received slightly less than $1000.
Again, it was not a payroll check and no withholding
occured. How do I report this income?

Thanks in advance for any help.

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