This thread has been incredibly eye-opening! I'm in a very similar situation as a massage therapist at a spa - classified as 1099 but with zero control over my schedule, rates, or how I perform services. Reading through everyone's experiences and advice has made me realize I've been approaching this all wrong by just trying to maximize deductions instead of addressing what's clearly a misclassification issue. The point about California's ABC test really hit home since I'm also in CA. My situation would definitely fail all three prongs just like the original poster's. I work set hours at their location using their equipment and methods - there's nothing "independent" about what I do. I'm particularly grateful for the advice about documenting everything and the reminder about the 3-year statute of limitations for wage claims. I've been there for 18 months working similar hours (45-50 per week) with no overtime pay, so that could be significant money I'm owed. One thing I'm curious about - for those who successfully transitioned from 1099 to W-2 status, did your employers try to reduce your base pay to offset their new payroll tax obligations? I'm worried my boss might cut my rate if I push for proper classification, claiming she needs to account for her half of the Social Security and Medicare taxes. Has anyone dealt with that kind of pushback, and if so, how did you handle it? I want to approach this strategically rather than just walking in and demanding changes without thinking through the potential responses.

As someone who's been through a similar situation as a freelance hairstylist, I want to echo what others have said about worker classification being the real issue here. But I also understand you need practical advice for your current situation while you figure that out. For immediate tax help, I'd strongly recommend keeping a simple expense tracking system. I use a basic app on my phone where I photograph every receipt and categorize it immediately - "Supplies" (nail polish, files, tools you buy), "Education" (any courses or certifications), "Professional" (licenses, insurance), or "Personal" (lunch, commuting). This makes tax time so much easier and helps you see which expenses are actually legitimate business deductions versus personal costs that happen to occur during work. The supplies you purchase yourself are definitely your biggest deduction opportunity. Everything else - meals, transportation to your regular workplace, rent unless you have a true home office - these are much riskier to claim and honestly probably not worth the audit risk. But here's the thing: after tracking my expenses for a year and dealing with quarterly payments and self-employment tax, I realized that being properly classified as an employee would have saved me more money than all my deductions combined. The 15.3% self-employment tax alone is brutal, and your employer should be paying half of that. I'd suggest starting to document your work conditions now (set schedule, their equipment, their rules) while also tracking legitimate business expenses. That way you're covered either way this situation develops. Sometimes the simple solution (proper employee status) is better than trying to navigate complex tax strategies around what sounds like a problematic classification.

This might be a dumb question but does anyone know a good tax software that handles options trading well? I've been using H&R Block but it seems totally confused by my covered calls and cash-secured puts.

I've been dealing with the same TD Ameritrade 1099-B confusion for years! One thing that really helped me was understanding that the "basis reported to IRS" distinction basically tells you how much work you have to do. When TD reports the basis, they're telling the IRS what you paid - so you just need to make sure your tax software captures the right gain/loss. When they don't report basis, you're on the hook to prove what you paid if the IRS ever asks questions. For your $63k trading volume, definitely pay attention to the wash sale adjustments. TD Ameritrade is pretty good about calculating these, but they only track wash sales within their own system. If you have accounts at other brokers or bought the same securities in a retirement account, you'll need to manually track those wash sales yourself. Also, since you mentioned futures trading - those Section 1256 contracts are actually treated more favorably tax-wise because of that 60/40 long-term/short-term split, regardless of holding period. So even if you held a futures contract for just one day, 60% of the gain gets long-term capital gains treatment. Pretty nice tax advantage compared to regular stock trading!

Has anyone dealt with the reporting requirements for the PERSON WHO PAID the settlement? I'm on the other side of this - I had to pay a settlement last year and am confused about how to report the attorney fees portion on the 1099-MISC I'm issuing.

Just want to add some clarity based on my experience as a tax preparer - the key thing everyone's touching on is correct: if your settlement was SOLELY for physical injuries from your workplace accident, it's likely not taxable under IRC Section 104(a)(2). However, be careful about one thing: if any portion of that $42,500 was for lost wages or punitive damages (rather than just compensating for the physical injury and medical expenses), that portion WOULD be taxable. Check your settlement agreement carefully - sometimes these get lumped together. If it's truly all for physical injuries, you don't report it as income, and the 1099-MISC in Box 3 becomes irrelevant for your tax return. But keep all your settlement documentation because the IRS will have a record of that 1099-MISC being issued to you. Also, even if you determine it's non-taxable, some tax software will still prompt you to enter the 1099-MISC and then allow you to mark it as "not taxable due to physical injury settlement" or similar - this creates a paper trail showing you received and considered the form.

Check if your state still allows these deductions! Federal eliminated them but I found out NJ still lets me deduct unreimbursed employee expenses on my state return. Saved me about $420 last year!

This is exactly why I think we need to push back on employers more systematically. Mason, your $3,500 in tools plus uniforms and repairs is a significant business expense that your company is essentially shifting to you. Have you considered documenting all these required expenses and presenting them to your employer as a formal request for either reimbursement or a tool allowance? Some companies have started offering annual tool stipends or reimbursement programs once they realize how much their employees are spending. You might also want to check with your union (if you have one) - some have negotiated tool allowances into their contracts specifically because of these tax law changes. Also worth noting: if you do any side work with those same tools (even occasional weekend jobs), you can deduct the business-use portion on Schedule C. Keep detailed records of what percentage of tool use is for side work versus your main job.

Don't ignore this! My cousin had a similar W2 issue last year and thought "whatever, I'll just file without entering that box" - ended up getting audited because the IRS systems automatically flag mismatches between what employers report and what you file. The employer sends a copy of your W2 to the IRS, so they'll know something's missing.

Just wanted to add another perspective here - I'm a former payroll administrator and this type of Box 12a error is more common than you'd think, especially around year-end when companies are rushing to get W2s out. The missing letter code is almost always a simple oversight in the payroll system setup. When you call HR, don't just ask them to "fix it" - be specific that Box 12a contains a dollar amount but is missing the required letter code. This helps them identify the exact issue in their system. Also ask for a timeline on when you can expect the corrected W-2c form, since you'll need it before the filing deadline. One more tip: keep documentation of your request (email is better than a phone call) so you have proof that you contacted them about the error if any questions come up later. Most employers are very cooperative about fixing these mistakes once they understand what went wrong.