One thing I'd recommend is asking your client upfront how they plan to handle the expense reimbursements on your 1099-NEC. Some companies are good about keeping consulting fees separate from reimbursed expenses, while others just lump everything together. If you can get this clarified before year-end, it'll save you a lot of headaches during tax season. You might even be able to request that they issue two separate 1099s - one for your consulting income and another for reimbursed expenses (though not all companies will do this). Also, make sure you're keeping a clear paper trail between your expense reports and the reimbursement payments. This will be crucial if you need to prove to the IRS that certain amounts on your 1099-NEC were actually expense reimbursements and not additional income.

It's definitely not too late to ask your client about how they handle expense reimbursements on the 1099-NEC! In fact, asking now shows you're being proactive about tax compliance, which most professional clients will appreciate. You could frame it as "I want to make sure I'm prepared for next year's tax season - can you clarify how expense reimbursements are typically reported on the 1099-NEC?" Regarding documentation, email confirmations of reimbursement payments should be sufficient for most situations. The key is being able to clearly match your expense reports to the reimbursement payments. I'd recommend creating a simple tracking spreadsheet with columns for: date of expense report, amount submitted, date of reimbursement, amount received, and any reference numbers from emails or payment systems. One more tip - if your client does lump everything together on the 1099-NEC, make sure you calculate the exact total of reimbursed expenses for the year so you can deduct that precise amount on Schedule C. Don't estimate or round - the IRS likes to see exact matching numbers if they ever review your return.

This happened to me about 6 weeks ago and I was absolutely terrified when those codes just vanished overnight! I thought for sure the IRS had made some mistake or my return got lost in the system. But everyone here is right - it's actually a really good sign! Mine took about 12 days after the codes disappeared to get my direct deposit. The hardest part is definitely the waiting and not knowing what's happening behind the scenes. Pro tip: try to only check your transcript once a day max (I know it's hard!) because obsessing over it just makes the time crawl by. You're almost there OP! 🎉

Hey OP! This exact same thing happened to me about 3 weeks ago and I was freaking out just like you are now. Had those 810 codes staring at me for what felt like forever, then boom - they just disappeared one morning. I thought something went horribly wrong but it turned out to be the best news ever! Got my refund deposited exactly 11 days after the codes vanished. The disappearing codes basically means the IRS finished whatever review they were doing and your return is now cleared to process normally. I know the waiting is absolutely brutal (I was checking my transcript obsessively too) but this is actually really positive movement. You should see some real progress soon - maybe even a deposit date showing up in the next week or two! Hang in there! 💪

Consider the long-term perspective too! C Corps require a lot more ongoing compliance - board meetings, minutes, separate accounting systems, etc. If you incorporate in Delaware or Nevada to save on state taxes, you'll still need a registered agent in those states ($100-200/yr). Our investment group started as a C Corp in 2019 thinking we'd benefit from the lower tax rate, but we ended up converting to an LLC last year because the administrative burden and costs were eating into our returns. Plus when we did want to take some profits out, the double taxation was painful.

Another important consideration that hasn't been mentioned yet is the state-level implications. Many states don't conform to federal tax rules for business entities. For example, some states impose minimum franchise taxes on C Corps regardless of income, while others have different tax rates for pass-through entities. Also, if you're planning to trade options or futures, there are special rules under Section 1256 contracts that might affect your decision. These are marked-to-market annually and get preferential tax treatment (60% long-term, 40% short-term regardless of holding period) which could change the math significantly. One more thing - if you do go the LLC route and your trading becomes substantial, you might want to consider making an S Corp election for the LLC. This gives you the pass-through taxation benefits while potentially reducing self-employment taxes on any profits you take as distributions rather than salary (though you'd still need to pay yourself reasonable compensation). The key is really modeling out your specific situation with realistic projections rather than making the decision based on tax rates alone.

Important: Make sure the collections payments were specifically for qualified education expenses (tuition, required books, etc). If they included things like room and board, parking fees, or late payment penalties, those portions aren't deductible for education credits. You'll need to separate out the qualified vs non-qualified expenses.

I've been following this thread and wanted to add a few key points that might help clarify things for anyone in a similar situation: First, you absolutely CAN claim education credits for tuition paid to collections, but it must be in the year you actually made the payment, not when you took the classes. So your 2023 payment for 2022 tuition would go on your 2023 tax return. Second, regarding the missing 1098-T - this is super common with collections situations. The IRS doesn't actually require you to have a 1098-T to claim education credits. You just need to maintain good records of your payments and be able to prove they were for qualified education expenses if audited. Keep your payment receipts from the collection agency, any correspondence showing the debt was specifically for tuition, and ideally some documentation from your school showing the original tuition charges. The Lifetime Learning Credit is probably your best bet since you weren't enrolled in 2023 when you made the payment. It's worth up to $2,000 per year and doesn't require current enrollment like the American Opportunity Credit does. One last tip - if this was your first time owing tuition to collections, double-check that the collection agency didn't add any fees or interest. Only the actual tuition portion qualifies for education credits, not collection fees or penalties. Hope this helps! The tax code around education expenses can be really confusing, especially when collections are involved.

Make sure you keep copies of EVERYTHING you submit. The IRS loves to say they never got stuff 🙄

I was in a similar situation a few years back - missed 2 years and was stressed about it. The good news is you can absolutely file your 2024 return first if you need to, but definitely prioritize getting those back years filed ASAP. One thing that helped me was setting up a payment plan with the IRS for any penalties/interest owed on the missed years. They're surprisingly reasonable to work with if you're proactive about it. Don't let the anxiety keep you from taking action - you've got this!