Has anyone actually found a tax form where self-employed people can claim sick days? I have TurboTax and don't see anything like this mentioned.

Just to add some clarity here - I went through this exact confusion last year when I started freelancing! The accountant was likely referring to the old FFCRA credits that ended, but there are still some things worth knowing as a self-employed person. While there's no federal "sick day" program currently, don't forget about these legitimate self-employment deductions that can help offset income loss when you're unable to work: - Health insurance premiums (huge deduction if you're not covered elsewhere) - HSA contributions if you have a qualifying high-deductible plan - Home office expenses (a portion of rent, utilities, etc.) - Professional development and training costs - Equipment and software purchases Also, some cities and counties have their own programs - worth checking your local government website. And definitely consider setting up a separate "sick fund" savings account where you put aside 5-10% of each payment for those inevitable down days. It's frustrating that we don't have the same safety net as W-2 employees, but building these habits early in your freelancing career will really pay off!

Just checking - are you SURE you're actually ineligible for HSA contributions? Being on your parents' plan doesn't automatically disqualify you if that plan is an HDHP that meets the requirements for HSA eligibility. The IRS rules state you can contribute to an HSA if: 1. You're covered by an HDHP 2. You have no other health coverage (with some exceptions) 3. You aren't claimed as a dependent on someone else's tax return 4. You aren't enrolled in Medicare If your parents' plan is an HDHP that meets the deductible requirements ($1,400+ for individual coverage in 2022), and you meet the other criteria, you might actually be eligible! Worth checking the details of your parents' plan before going through all this trouble.

Dylan, you're absolutely making the right choice with that plan! I went through almost the exact same situation two years ago and can confirm that the approach you've outlined (excess contribution withdrawals + amended 2022 return + reporting distributions on 2023 return) is definitely the cleanest way to handle this. A few quick tips from my experience: 1. When you contact the HSA administrators, specifically ask them to remove the contributions as "excess contributions due to ineligibility" - this ensures they handle it properly and don't just treat it as a regular distribution. 2. Keep detailed records of all the paperwork and correspondence. The HSA providers should give you confirmation letters showing the excess contribution removal, which you'll want for your tax files. 3. The 6% excise tax for 2022 will be calculated on Form 5329 that you'll file with your amended return, but since you're removing the funds promptly, it should be relatively minimal. The fact that you caught this and are fixing it proactively shows you're being responsible about it. The IRS deals with HSA contribution errors all the time - it's really not as scary as it feels when you're going through it. You'll get through this just fine! Sleep well knowing you have a solid plan. The hardest part (figuring out what to do) is behind you now.

I'd also recommend your cousin start keeping detailed records now if he hasn't already - not just for this year's taxes, but for future audits. The IRS can go back 3-6 years (or longer in cases of suspected fraud), so having organized records of income and expenses is crucial. Since he's essentially running a business, he should consider opening a separate business checking account and getting a business credit card for expenses. This makes tracking so much easier and looks more professional if he ever gets audited. Plus, many business credit cards offer cash back on tools and supplies. One more thing - if he's planning to continue this handyman work, he might want to look into getting proper business insurance. If he gets injured on a job or accidentally damages someone's property, personal insurance might not cover it since it's business activity.

Just to add another perspective - I'm a tax preparer and see this situation constantly. Your cousin definitely needs to report this income, but the good news is that with $35k in handyman income, he'll likely qualify for significant business deductions that can really reduce his tax burden. One thing I always tell clients in similar situations: don't panic about past compliance issues. The IRS has voluntary disclosure programs and payment plans if someone realizes they've underreported income in previous years. It's always better to come forward proactively than to wait and hope they don't notice. Also, since he's essentially running a handyman business, he might want to consider whether forming an LLC makes sense for liability protection and potential tax benefits. At $35k annually, it's definitely worth exploring with a tax professional. The key is getting organized now and establishing good record-keeping habits going forward. This kind of side work can be very tax-efficient if handled properly with all the available deductions for tools, vehicle expenses, and other business costs.

I went through this exact same nightmare last year! My solo 401k hit $265k and suddenly I'm getting letters about Form 5500 requirements. My CPA basically said "figure it out yourself" which was incredibly frustrating given what I pay him. After a lot of research and trial and error, here's what I learned: your CPA isn't necessarily being lazy - Form 5500 filings really are a specialized area that most general tax preparers don't handle. It's like asking your family doctor to perform brain surgery - technically they're both medical professionals, but it's just not their specialty. The good news is that for solo 401k plans, the filing requirements are much simpler than the horror stories make them sound. You're not dealing with discrimination testing, complex participant data, or most of the schedules that make these forms nightmarish for larger plans. I ended up filing mine through the DOL's EFAST2 system after getting my questions answered by an IRS specialist. Total cost was minimal compared to the $1,200+ quotes I was getting from TPAs. The first year is definitely a learning curve, but now I feel confident handling it myself going forward. Don't let the initial overwhelm push you into paying thousands for something you can absolutely handle yourself with the right guidance!

I'm dealing with this exact same situation right now! My individual 401k with Schwab just hit $255k and I had no idea about Form 5500 requirements until I started researching. Like you, my CPA basically said "not my problem" and suggested I find a specialist, which was frustrating since I thought this would be part of normal tax services. Reading through all these responses has been incredibly helpful - especially learning that solo 401k filings are much simpler than the complex multi-participant plans that scare most CPAs away. The combination approach of using Claimyr to get direct IRS guidance first, then filing through the DOL's free EFAST2 system seems like the perfect solution. It's honestly ridiculous that Schwab and other custodians don't provide better guidance on compliance requirements when you hit these thresholds. They're happy to collect fees but leave you hanging when it comes to the paperwork side. At least now I know I'm not alone in dealing with this and that it's absolutely manageable without paying thousands to a TPA! Thanks everyone for sharing your experiences - this thread is going to save me a ton of money and stress.

ngl these verification things are getting out of hand. seems like everyone's getting flagged this year

I went through this exact same verification process last year and it was honestly not as bad as I expected! The key thing is to respond quickly - don't wait around. I called the number on my notice within 2 days and they walked me through everything I needed to bring. For me, they just needed to verify my identity and confirm some income amounts. I brought my driver's license, social security card, and all my tax documents (W-2s, 1099s, etc.). The actual appointment took maybe 20 minutes. The waiting part is the worst - took about 4-5 weeks after my verification appointment for my refund to finally show up. But once they verify everything, it moves pretty smoothly. Just stay on top of checking your transcript every week or so to see when it updates. Don't stress too much - this is way more common than you think and it's usually just them being extra careful about fraud prevention. You'll get through it! 💪