This is a really good point. My company started charging a "spousal surcharge" of $150/month if your spouse could get insurance through their own job but chose to be on yours instead. Worth checking if either employer has policies like this.

Does anyone know about New York state? I'm on short term disability in NY and can't figure out if I need to pay state taxes on the payments.

New York generally follows the federal rules for taxing disability benefits. So if your benefits are taxable for federal purposes (employer paid the premiums), they're typically taxable for NY state purposes too. New York does have its own temporary disability insurance program, but those benefits follow the same general rule - if you paid for it with after-tax dollars, the benefits are tax-free. If it was employer-paid or paid with pre-tax dollars, the benefits are taxable.

I had the exact same problem! Turns out the insurance company was supposed to file a W-2 for the disability payments, not my employer. I had to call Cigna and request a corrected W-2 specifically for the disability pay. They classified it as "third-party sick pay" on a separate W-2.

You should definitely contact Cigna directly about the missing tax forms. Insurance companies are required to issue tax documents for disability payments when they're taxable, but sometimes there are delays or the forms get sent to an old address. If your employer paid the premiums for the Cigna policy, those disability payments are taxable income and Cigna should have issued either a W-2 or 1099-MISC. Call their customer service line and ask specifically about tax documents for disability benefits - they should be able to reissue them or tell you if the payments were non-taxable (which would mean you paid the premiums with after-tax dollars). Don't file your taxes until you get this sorted out, otherwise you might end up having to file an amended return later.

Thank you for mentioning this! I hadn't even thought about the loan implications. Do lenders typically look at your net profit or your gross income when evaluating self-employment income? I'm hoping to buy a house next year so this is super relevant.

Lenders typically look at your net profit (the bottom line of your Schedule C) when evaluating self-employment income for loans. They usually want to see at least 2 years of consistent or increasing income on your tax returns. Some lenders may also ask for profit and loss statements in addition to your tax returns, especially if you're applying for a loan in the middle of a tax year. They're trying to verify that your current income is still in line with what you reported on previous tax returns.

How does that work with the booth rental model though? I've heard mixed things about whether rental income qualifies for QBI.

Good question! The booth rental income should generally qualify for the QBI deduction since you're actively managing the tattoo studio business. The key is that you're providing services beyond just being a passive landlord - you're maintaining the space, handling business operations, and likely providing some level of management. However, the income limits and business type restrictions can get complex. With $70k in profit, you'd likely be under the income thresholds where it gets complicated, but definitely worth having a tax professional review your specific situation to make sure you're maximizing this deduction properly.

I switched from FreeTaxUSA to TaxSlayer and found it asks more detailed questions about potential deductions and credits. It found a student loan interest deduction I had forgotten about. Most software should catch the obvious stuff if you answer all the questions honestly. The bigger issue is often people not knowing what expenses qualify or forgetting about certain things they paid for during the year.

Thanks for the tip! I didn't even think about different versions of the form. Is there any way to know which tax classification is best for my LLC? I've always just checked "single-member LLC" since I'm the only owner.

The tax classification you select on your W-9 should match how you're already filing your taxes, not something you decide when filling out the W-9. If you're the only owner and haven't elected different treatment, then "single-member LLC" (disregarded entity) is correct. This means for federal tax purposes, you're treated as a sole proprietor and file Schedule C with your personal return. If you've elected to be taxed as an S-corporation or something else, you would check that box instead. But don't change your classification just for the W-9 - it needs to match your existing tax election with the IRS.

They shouldn't have sent you a 1099-NEC for product purchases. The 1099-NEC is specifically for non-employee compensation (services) - not for buying products or goods from your business.

That's actually a pretty common mistake that businesses make. They issued you a 1099-NEC incorrectly since that form is only for services/non-employee compensation, not product sales. You should still report the income (which you did correctly), but you might want to let them know for their records that product purchases shouldn't generate 1099-NECs. This could save them from making the same error with other vendors. The IRS gets copies of all 1099s, so having incorrect forms floating around isn't ideal for anyone involved.