Has anyone used TurboTax for reporting settlement income? I'm wondering if the regular version handles this or if I need to upgrade to their premium or self-employed version.

This is a really important question to get right! I went through something similar with a workplace discrimination settlement a couple years back. The key things I learned: 1) Yes, discrimination settlements are generally taxable as ordinary income, 2) You can deduct attorney fees "above the line" so you're only taxed on what you actually received, and 3) Set aside about 25-30% for taxes depending on your bracket. One thing I'd add that others haven't mentioned - make sure you get a proper 1099 form from whoever paid the settlement. Sometimes there are delays or errors with these, and you want to make sure the amount reported matches your records. Also, if any part of your settlement was specifically for medical expenses related to physical symptoms, that portion might be excludable from income, but you'd need clear documentation showing that allocation. I'd definitely recommend talking to a tax professional or even calling the IRS directly about your specific situation. Settlement taxation can be tricky and the stakes are high enough that it's worth getting professional guidance.

One tip about filing these old returns - don't e-file! The IRS only accepts electronic filing for the current tax year and 2 years prior. For anything older than that, you have to mail paper returns. Also, be sure to mail each tax year in a separate envelope. If you send multiple years together, it increases the chances of processing errors.

Just wanted to add something that might help with your peace of mind - even though you can't recover that 2017 overpayment, filing both returns will at least give you a complete picture of your tax situation from those years. I was in a similar boat with unfiled returns and kept putting it off because I was overwhelmed by all the unknowns. Once I finally bit the bullet and filed everything, it was honestly such a relief to have it done and know exactly where I stood with the IRS. One thing that helped me was creating a simple spreadsheet tracking what I owed for each year including estimated penalties, so I could budget for the payments. The uncertainty was actually worse than the reality of what I ended up owing. Good luck getting everything sorted out - you're already taking the right steps by researching this and planning to file!

Don't feel bad, I've been through this every year for 5 years now and still get anxious! Quick tip - set a calendar reminder for early January next year to request tax info from the daycare. Most are prepared for this question in Jan/Feb but get annoyed by April when they've answered it 100 times already. Also, if you're using TurboTax, it actually has a feature where you can look up provider EINs if you used the same daycare last year. Saved me when one of our providers changed ownership and I needed the new EIN.

Great question! I went through this exact same stress last year with my twin boys at two different daycares. Here's what worked for me: Most daycares are totally used to this request, especially during tax season. Just call and say "Hi, I'm preparing my taxes and need your EIN and the total amount I paid for childcare in 2024 for tax reporting purposes." That's it! A few things that helped me: - Call during business hours but not pickup/dropoff times when they're swamped - Have your child's name and your account info ready - Ask if they have a standard form they provide to parents for tax purposes If you paid by credit card or check, your bank statements can help verify the amounts. I actually created a simple spreadsheet tracking all payments which made everything so much easier. Don't overthink it - you're just asking for basic business information that every legitimate childcare provider should readily provide. You've got this!

New York generally follows federal tax treatment for qualifying reorganizations, so the stock conversion portion should be tax-free at the state level too. However, NY has some specific rules around equity compensation that might affect your ESPP shares differently. I'd recommend double-checking NY Publication 36 (for residents) or Publication 425 (for non-residents) which cover stock transactions. If you have significant ESPP holdings with discounts, NY sometimes requires additional reporting even when the federal treatment is straightforward. Given the complexity you're describing with multiple equity types and the state tax considerations, this might be a good year to work with a tax professional rather than going the software route. The cost of professional help could easily be worth it to ensure everything is reported correctly and you're not missing any optimization opportunities. Also keep in mind that if you're close to higher tax brackets, you might want to consider timing other capital gains/losses this year to help offset the taxable portion of the merger payout.

Yes, tax loss harvesting to offset the cash portion gains is definitely worth considering! Since you're doing the 50/50 split, you'll have taxable gains on the cash portion that you can offset with losses from other positions. Just be careful about the wash sale rules - if you're planning to sell positions at a loss, make sure you don't repurchase the same or substantially identical securities within 30 days before or after the sale. For professional help, I'd definitely recommend finding someone who specializes in equity compensation. The nuances around ESPP, RSUs, and corporate reorganizations are pretty specialized. You might want to look for an Enrolled Agent (EA) or CPA who specifically mentions stock compensation on their website. The National Association of Stock Plan Professionals (NASPP) sometimes has referral resources too. Another thought - if you have other appreciated positions you've been thinking about selling anyway, this might be a good year to realize those gains while you're already dealing with the merger tax complexity. At least everything would be consolidated in one tax year rather than spreading the complexity across multiple years. The fact that you're thinking about these strategies ahead of time puts you in a much better position than most people who just deal with it at tax time!

Another approach - have you tried explaining to your contractor that they REALLY need to give you their info? If they're a legitimate business, they should understand this is required. I've had success with telling contractors that I'm legally required to report payments over $600, and without their SSN/EIN, they might face issues with the IRS themselves. Sometimes they just don't understand the importance. You might also want to have them complete a W-9 form which officially requests their tax ID information. Send it with a gentle but firm explanation that you cannot make future payments without this completed form.

Great question! I went through this exact situation last year with a freelance graphic designer. You absolutely can e-file your personal return through TurboTax and mail the 1099-NEC/1096 forms separately - they're completely independent processes. For your personal return, just claim the $1,800 deduction on your Schedule C (or Schedule C-EZ) as usual. The IRS doesn't require you to have the contractor's TIN to claim legitimate business expenses. For the 1099-NEC, fill it out with "Applied For" in the TIN field and mail it with Form 1096 to your state's designated IRS processing center (you can find the address in the 1099 instructions). Make sure to keep copies of all your attempts to get their SSN/EIN - emails, texts, certified mail receipts, etc. One tip: Send the contractor a formal W-9 request via certified mail with return receipt. This creates an official paper trail and sometimes the formality finally gets them to respond. You can download the W-9 from IRS.gov. Don't let this contractor's lack of cooperation delay your filing or cost you a legitimate deduction!