One thing nobody's mentioned yet - you should really look into professional liability insurance too! I had a client sue me over a mistake that wasn't even my fault (they provided incorrect information). My insurance covered the legal fees which would have bankrupted me otherwise. It's not super expensive and totally worth the peace of mind.

Great question! I went through this exact same transition a few years ago when I expanded beyond family clients. Having a solid engagement letter is absolutely essential - I learned this the hard way after a similar situation with missing documents. Here's what I include in mine: client must provide ALL tax documents by a specific deadline, clear scope of what services I'm providing, my responsibilities vs theirs, fee structure, and what happens if they provide incomplete info. I also have a section about amendments - if they forgot documents and we need to amend, that's an additional fee. The key is setting expectations upfront. I actually have clients initial next to the section about providing complete documentation, and I keep a checklist that I review with them during our initial meeting. This has eliminated almost all the "I forgot to tell you about..." situations. One more tip - consider requiring a retainer upfront for new clients. It shows you're professional and helps weed out people who aren't serious about the process.

As someone who recently went through this exact same process, I'd recommend starting with the IRS Tax Withholding Estimator that others mentioned, but also keeping a few things in mind: First, since you're paying tuition out of pocket, make sure you understand which education benefits you can claim. The American Opportunity Tax Credit can be worth up to $2,500 and is partially refundable, which means it could be contributing to your large refund even if you owe no taxes. Second, when you adjust your W-4, start conservatively. Maybe aim to reduce your refund to $2,000-2,500 this year rather than going straight to breaking even. This gives you a buffer while you learn how the new system works. Finally, consider the timing - if you make changes now, you'll have fewer paychecks left in the year to spread the adjustment across, which means each remaining paycheck will see a bigger change in withholding. You might want to calculate whether that works with your budget or if you should make a smaller adjustment now and fine-tune it for next year. The key is getting comfortable with the process before trying to hit that perfect $0 balance!

I went through this exact same frustration two years ago when I got back a $4,800 refund! What really helped me was understanding that the new W-4 form works differently than the old one - you can't just add "allowances" anymore. Here's my step-by-step approach that got me to within $300 of breaking even: 1. **Use the IRS Withholding Estimator first** - It's way more accurate than generic calculators and will give you specific dollar amounts for your W-4. 2. **Account for your education expenses properly** - With tuition payments, you likely qualify for the American Opportunity Tax Credit (up to $2,500) or Lifetime Learning Credit (up to $2,000). These credits are a big part of why you're getting such a large refund. 3. **For the W-4 adjustment** - You'll probably need to add an amount in Step 4(b) for "Deductions" to reduce your withholding. The estimator will calculate this for you, but roughly speaking, if you want $200 less withheld per month, you'd add about $3,000-3,500 in deductions (depending on your tax bracket). 4. **Start conservative** - Maybe aim for a $1,500-2,000 refund this first year rather than trying to hit exactly zero. You can always fine-tune it next year. Since you're making changes mid-year, the adjustment will be spread across fewer paychecks, so each one will see a bigger change. Make sure that works with your monthly budget! The key is that education credits are often the "hidden" reason for large refunds, so factor those in carefully.

I've been researching both companies for my own career transition into tax prep, and one thing I'd add is to consider the timing of their training programs. H&R Block typically starts their training earlier in the season (around September/October) and spreads it over a longer period, which might work better if you're balancing other commitments. Liberty often runs more intensive, shorter programs closer to tax season. Also worth noting - H&R Block has been expanding their year-round services like bookkeeping and business consulting, which could mean more opportunities for full-time employment beyond just the seasonal tax prep work. If you're thinking long-term career rather than just seasonal income, that's definitely something to factor in. The digital vs manual training debate is interesting, but honestly, most successful tax pros I know eventually learn both approaches anyway. The key is getting solid foundational knowledge AND being comfortable with modern tax software. Whichever you choose, you'll probably want to supplement with additional learning resources as you grow in the field. Have you considered reaching out to current employees at both local locations? Sometimes getting the inside scoop on management style and work culture at your specific locations can be more valuable than general company comparisons.

I actually went through H&R Block's training program last year and can give you some firsthand insight! Their digital training approach was really comprehensive - it included interactive modules, practice returns with feedback, and simulated client scenarios. What I loved most was that by the time I finished training, I was already comfortable with the actual software I'd be using with real clients. The training took about 3 weeks of evening classes (2-3 hours each session), which was perfect for balancing with my day job. They also provided ongoing support throughout tax season - weekly team meetings where we could discuss challenging returns and get guidance from more experienced preparers. One thing that really stood out was their quality review process. Every return gets checked by a supervisor before filing, which gave me confidence as a new preparer and helped me learn from any mistakes. They also have a really good error tracking system that helps you identify patterns in your work and improve over time. The work environment was professional but supportive. Yes, there are metrics to meet (returns per hour, accuracy rates), but they're reasonable and there's good coaching to help you improve rather than just pressure to perform. The pay at our location started at $14/hour for new preparers, with bonuses based on client satisfaction scores and return volume. After my first season, I got promoted to a senior preparer role with better hourly pay plus commission opportunities. Would definitely recommend at least checking out their info session - even if you stick with Liberty, it'll give you a good comparison point!

Just to add another perspective here - I went through this same confusion when I started my consulting business. One thing that helped me understand accrual accounting better was thinking about it this way: you're essentially recognizing the "economic reality" of when transactions happen, not just the paperwork timing. So in your case, the economic reality is that you earned that $4,300 in December 2024 when you completed the work and delivered value to your client. The fact that you didn't get around to invoicing until January doesn't change when you actually earned it. I'd recommend keeping good records of when work was actually completed vs when invoiced vs when paid - it'll make tax time much easier and help if you ever get audited. I use a simple spreadsheet with columns for service date, invoice date, and payment date. Makes it crystal clear which tax year everything belongs to.

As someone who just went through this exact same situation with my freelance business, I can confirm what others have said - it's definitely a 2024 income since that's when you performed the work. One thing I learned the hard way though is to be really careful about projects that span multiple months. I had a client project that I started in November 2024 but didn't finish until February 2025, and I made the mistake of booking all the revenue in February when I invoiced. My accountant had to help me correct it by recognizing the revenue proportionally based on work completed each month. For your December project, since it sounds like it was completed entirely in December, the full $4,300 should go on your 2024 taxes. Just make sure you have good documentation showing when the work was actually finished - I keep copies of final deliverables with timestamps, client approval emails, and project completion notes. This backup documentation has been super helpful during tax prep. The timing differences between when you earn, invoice, and get paid can definitely be confusing at first, but once you get the hang of accrual accounting it becomes much clearer!

Another option to consider if your employer is hesitant about the formal processes - you could suggest they simply agree not to contest your unemployment claim when you file. Even if they don't want to deal with reclassification paperwork right now, this would at least solve your immediate need for unemployment benefits. Most state unemployment offices will investigate worker classification when there's a dispute between a 1099 filing and an unemployment claim. If your work situation clearly shows you were functioning as an employee (set schedule, company equipment, integrated into their business operations, etc.), the state will often rule in your favor regardless of how you were originally classified for tax purposes. This approach gives your boss an easy "yes" that doesn't require him to admit fault or deal with IRS paperwork immediately, while still getting you the unemployment benefits you need. You can always pursue the tax classification issues separately later, but at least you'll have some income while job hunting. Just make sure to document your work arrangement thoroughly before you leave - save emails about schedules, screenshots of company systems you used, records of any training they provided, etc. This documentation will be valuable whether you're dealing with unemployment claims or potential IRS forms later.

This is a really comprehensive discussion with lots of great advice! I wanted to add one more consideration that might be helpful - timing your conversation strategically within your remaining time at the company. Since you mentioned you're getting laid off at the end of the month, I'd suggest having this conversation as soon as possible, but also being prepared for the possibility that your employer might accelerate your departure if they feel threatened by potential liability issues. Some employers unfortunately react to these conversations by immediately terminating the relationship to avoid further exposure. That said, since you're already being laid off anyway, you don't have much to lose by bringing this up now rather than waiting until after you leave when you'll have much less leverage. I'd also suggest keeping detailed records of your current work arrangement before you have the conversation - things like emails showing you report to a supervisor, any company handbook materials you received, records of using company equipment or software, etc. Having this documentation ready will be valuable whether your employer is cooperative or if you end up needing to file formal complaints later. The unemployment benefits angle really is the best starting point since it's immediate and doesn't require your employer to admit fault or navigate complex tax procedures. Good luck with your conversation - you've got a lot of good strategies to work with here!