Just wanted to share my experience as someone who went through this exact confusion last year. I'm a rideshare driver and got hit with multiple 1099-Ks that made it look like I earned way more than I actually did. The key thing I learned is that you absolutely need to get the detailed earnings statements from each app - not just the 1099-K. For example, my Uber 1099-K showed $15,000, but my actual driver earnings were only about $9,500 after you subtract the rider payments that just passed through to Uber's booking fees, tolls, etc. I ended up working with a tax professional who specializes in gig workers, and they showed me how to properly report this on Schedule C. You report your actual earnings (not the inflated 1099-K amount), then deduct your business expenses like mileage, phone bills, car washes, etc. The mileage deduction alone saved me hundreds. One tip: if you use multiple apps, make sure you're not double-counting miles driven. I was tracking total miles and trying to claim them for each app, which would have been incorrect. You can only deduct the actual business miles once, even if you had multiple apps running. For cash tips, I keep a simple log in my phone's notes app - just date and rough amount. Most gig workers I know report the majority of their cash tips but not necessarily every single dollar, and that seems to be the practical reality of the situation.

I've been dealing with 1099-K confusion myself as a part-time food delivery driver, and I wanted to share what I learned after doing some research and talking to other gig workers. First, yes, you do need to report the income from your 1099-K, but here's the key - you only report YOUR actual earnings, not the total transaction amount. That $8,700 includes money that went to restaurants, which isn't your income. Most delivery apps provide a detailed annual summary (separate from the 1099-K) that breaks down what portion was actually paid to you vs. what was just passing through to merchants. For the cash tips situation - legally, all tips are supposed to be reported regardless of whether they're tracked. In practice, many service workers don't report 100% of cash tips, and enforcement is limited since the IRS focuses on bigger issues. However, with 1099-K forms now being issued at lower thresholds, there's more paper trail than before. If you decide to report cash tips (which is the safest approach), keep a simple log - even just notes in your phone with dates and approximate amounts. For your delivery work, make sure you're tracking your mileage and other business expenses like phone bills, insulated bags, etc. These deductions on Schedule C can significantly reduce your taxable income. The bottom line: report what's actually YOUR income from the 1099-K (not the inflated total), keep basic records of cash tips and expenses, and don't stress too much - most gig workers figure this out and the IRS understands the complexity of these new reporting requirements.

I've been following this thread and want to add some practical advice from my experience working in tax preparation. The support test calculations can seem overwhelming, but there's a systematic way to approach this. Create a simple monthly budget tracking sheet with two columns: "I pay" and "Parents pay." Include everything - rent, utilities (your estimated share), food, transportation, insurance, medical, education, clothing, entertainment, phone, etc. Multiply by 12 for annual totals. For your situation with cash rent payments, the IRS Publication 17 specifically mentions that you can use "reasonable estimates" when exact records aren't available. Your regular ATM withdrawals that match your rent amount, combined with a simple written statement from your dad acknowledging the arrangement, would be considered reasonable documentation. One often overlooked factor: if you're paying your dad $175/week for rent, that's actually market-rate documentation that you're providing your own housing support. Most parents charging a dependent child would charge much less or nothing at all. Also, don't forget that any financial aid or scholarships you receive don't count as support from your parents - they count as support you provided for yourself. This can significantly tip the scales in your favor. The bottom line: if your calculations show you provide more than 50% of your total support, file your return claiming yourself. The education credits alone could be worth $2,500, which likely exceeds any benefit your parents would get from claiming you.

I'm a CPA and want to emphasize something crucial that might get overlooked in all this discussion about documentation and worksheets: the IRS dependency tests are objective, not subjective. Your parents don't get to "choose" who claims you based on family dynamics or who feels entitled to the deduction. Based on what you've described - paying $9,100/year in rent, covering your own groceries, car insurance, and personal expenses, plus working 30 hours a week - you almost certainly provide more than half your own support. The fact that your mom pays tuition doesn't automatically disqualify you from claiming yourself. Here's what I'd recommend: Complete IRS Worksheet 3-1 in Publication 501 (the official support test worksheet). This will give you the exact calculation the IRS would use if there's ever a dispute. If you provide more than 50% of your total support, you SHOULD claim yourself - it's not optional, it's the correct filing status under tax law. Also, since you mentioned you're 24 and a full-time student, make sure you understand that you can only be claimed as a "qualifying child" if you're under 24 AND a full-time student. If you don't meet the qualifying child test, your parents would have to prove you're a "qualifying relative," which has even stricter support requirements. File your return first and claim yourself if the numbers support it. Let your parents deal with the rejection if they try to claim you incorrectly.

Anyone have a recommendation for good tax software that handles self-employment taxes well? I've been using FreeFileWhatever but it gets confusing with all the schedules.

Just wanted to add something that might help with the quarterly payment calculations - the IRS safe harbor rule can be really useful for self-employed folks. If you pay at least 100% of last year's total tax liability (or 110% if your prior year AGI was over $150,000), you won't face underpayment penalties even if you end up owing more at filing time. This is especially helpful when your self-employment income varies throughout the year. You can use last year's numbers as a baseline for your quarterly payments and then adjust up or down based on how your current year income is tracking. Also, remember that your quarterly payments are due on the 15th of January, April, June, and September (not every three months like you might expect). The IRS has specific due dates that don't follow a regular quarterly calendar. One more tip - if you're just starting with self-employment, consider opening a separate savings account just for taxes. I transfer about 25-30% of each payment I receive into that account to cover both the self-employment tax and federal income tax. Makes it much easier to handle the quarterly payments and avoid scrambling for cash when they're due.

Has anyone looked into earning the Enrolled Agent (EA) certification? I've heard it might help bridge the gap for auditors wanting to transition to tax, but not sure if it's worth the investment of time and money.

I made a similar transition from audit to tax prep about 18 months ago, and I can tell you that your CPA license is already a huge advantage that many career changers don't have. Here's what worked for me: Start networking NOW through your local CPA society chapter. Many chapters have tax committees or special interest groups where you can meet tax professionals and learn about opportunities. I attended a few tax update seminars and made connections that led directly to interviews. Also consider reaching out to your current firm's tax department if they have one - internal transfers are often easier than external job searches, and they already know your work quality. Even if your firm doesn't do tax prep, partners often have connections at other firms. For the experience gap, emphasize transferable skills in your interviews: analytical thinking, client service (if you had any client interaction in audit), attention to detail, and understanding of accounting principles. These matter more than you think, especially to smaller firms that can train the technical tax stuff. One last tip - don't overlook payroll companies or bookkeeping firms that also do tax prep. They're often more flexible about hiring people without direct tax experience and can be a great stepping stone.

For Illinois to Wisconsin situations, you'll want to check both states' tax codes on trust distributions. Illinois generally follows federal treatment for basis calculations, but Wisconsin has some quirks around accumulated trust income. I'd recommend starting with Illinois Department of Revenue Publication 101 (Income Tax) and Wisconsin's Publication 102 for trust and estate taxation. Both states have specific sections on distributions to non-resident beneficiaries. The key thing to watch for is whether either state treats the distribution as carrying out accumulated income differently than the federal rules. Wisconsin in particular sometimes requires beneficiaries to pay state tax on trust distributions even when the trust paid Illinois tax on the same income. Your trustee should be able to help coordinate the state filings, but definitely get clarity on this before making the distributions. State tax surprises on large stock distributions can be really expensive!

One additional consideration I haven't seen mentioned yet is the potential impact of the Net Investment Income Tax (NIIT) on both the trust and beneficiaries. Trusts hit the 3.8% NIIT at much lower income thresholds than individuals - for 2024, trusts pay NIIT on undistributed net investment income over just $15,200. When you distribute appreciated stocks to beneficiaries, you're potentially moving that future capital gains income from the trust's high tax environment to the beneficiaries' potentially lower tax brackets. But remember that when the beneficiaries eventually sell those stocks, they may also be subject to NIIT if their modified adjusted gross income exceeds the thresholds ($200k single, $250k married filing jointly). The timing of when beneficiaries actually sell the distributed stocks could be crucial for overall tax planning. You might want to coordinate with the beneficiaries about their expected income levels in future years to optimize when they realize those gains. Also, make sure the trustee provides detailed records showing not just the original basis, but any capital improvements or adjustments that might affect the cost basis calculation.