LLC vs S-Corp doesnt matter for medicaid its all about your AGI. Go with LLC since your income isnt high enough for S corp to make sense. S corps are a pain with the extra paperwork and payroll requirements!!! An accountant will charge you like $1200+ just for s-corp tax returns. Make sure your tracking all your business expenses properly to lower your AGI. Home office, internet, phone, mileage, insurance, equipment. Every $1000 in legit deductions could be the difference in qualifying or not.

As someone who went through this exact situation two years ago, I can confirm what others have said - your business structure won't help with Medicaid eligibility at your income level. I was making around $30k with my freelance writing business and spent way too much time researching S-Corps thinking it would somehow help with healthcare costs. The reality is that at $28k annually, you're likely well within the Medicaid income limits for expanded states (usually around 138% of federal poverty level, which is about $20,120 for a single person in 2024). Your Modified Adjusted Gross Income is what matters, and that includes your net self-employment income regardless of business structure. My advice: stick with sole proprietorship or form a simple LLC for liability protection if needed. Focus your energy on properly tracking deductible business expenses - that's what will actually lower your MAGI. Things like your home office percentage, business use of your phone/internet, professional development courses, and business equipment can all reduce your taxable income. I wasted months overthinking the business structure when I should have just applied for Medicaid sooner. The application process was much simpler than I expected, and I qualified easily with similar income to yours.

This whole situation is a perfect example of why I've switched to using open-source tax software whenever possible. Tools like FreeTaxUSA or even the IRS's own Free File Fillable Forms don't lock you into proprietary file formats that become inaccessible later. For your immediate problem, I'd definitely echo what others have said about the IRS transcript route - it's your most reliable option for getting the 2020 data you need. The format takes a little getting used to, but it has all the essential information including itemized deductions. One thing I haven't seen mentioned yet is that some public libraries offer free access to tax preparation software, including TurboTax desktop versions. You might be able to open your TAX2020 file there if you really need to see it in the original format. Call your local library's reference desk to ask if they have tax software available during tax season. Going forward, I'd strongly recommend switching away from TurboTax entirely. Their business model is increasingly focused on creating these kinds of lock-in situations and upselling users. There are plenty of alternatives that won't hold your own tax data hostage!

I went through this exact same frustration last year! TurboTax's proprietary file format is such a pain when you just want to reference your own tax information. Here's what ended up working for me: I called the IRS directly and requested both my tax return transcript AND my wage and income transcript for 2020. The return transcript has all your deduction details, while the wage/income transcript shows your W-2s, 1099s, etc. Together they give you a complete picture of your 2020 filing. You can actually get these online instantly at irs.gov/transcripts if you can verify your identity through their system. If not, you can request them by mail (takes 5-10 business days) or call the transcript line at 1-800-908-9946. The format is different from your original return but honestly it's more comprehensive in some ways - shows every single line item and calculation. I actually prefer it now for year-to-year comparisons because everything is clearly labeled and easy to find. Don't give TurboTax another dime just to see your own data! The IRS transcript route is free and comes straight from the source.

Has anyone used the free IRS File Free option with just a 1098-T? Is it straightforward or should I just pay for TurboTax to make sure I get all the education credits right?

One important thing to keep in mind - even if you decide not to file because you have no income requirement, you should still keep all your education-related receipts and documents! If your parents are claiming you as a dependent, they'll need your 1098-T and any additional qualified education expenses (like required textbooks, lab fees, etc.) to maximize their education credits on their return. The credits can be worth up to $2,500 with the American Opportunity Credit, so make sure someone in your family is claiming them. Also, if you're not sure about your dependency status, have an honest conversation with your parents about it - sometimes students qualify to file independently even when parents assume they can claim them.

Has anyone considered if the sister could be classified as a household employee instead? If so, you'd need to use Schedule H and possibly W-2 forms instead of 1099s. The IRS has this weird distinction where household workers (including some caregivers) are treated as employees rather than independent contractors.

This is a really important distinction that @Ana Rusula and @Fidel Carson brought up about household employee classification. I'd strongly recommend Oliver double-check this before proceeding with the 1099-NEC. The key test is whether you're controlling HOW and WHEN your sister does the caregiving work. If you're setting her schedule, telling her what specific tasks to do, or she's essentially working under your direction in your grandfather's home, the IRS might consider her a household employee rather than an independent contractor. This matters a lot because: - Household employees get W-2s, not 1099s - You'd be responsible for Social Security/Medicare taxes (employer portion) - You'd need to file Schedule H with your tax return - At $1,300/month ($15,600/year), you're well above the $2,600 threshold On the other hand, if your sister has control over how she provides the care and you're just paying for the result (grandfather being cared for), then 1099-NEC would be appropriate. I'd suggest using one of the tax analysis tools mentioned earlier in this thread to help determine which classification applies to your specific situation. Getting this wrong could result in penalties and back taxes.

I've been in a similar situation as an employee before and wanted to share what I learned. When I had a financial emergency, I discovered that there are actually several legitimate ways to get more cash from your paycheck without the risks that come with claiming exempt status. First, your employee could adjust their W-4 to claim additional allowances or use the "extra amount to withhold" line in reverse (putting a negative number to reduce withholding). This isn't the same as going fully exempt and is much safer legally. Second, and this might be the most helpful - many employees don't realize they can request their employer change their pay frequency temporarily. If you normally pay bi-weekly, you could potentially do a one-time weekly payment to get him his money faster without any tax complications. The payroll advance route others mentioned is definitely solid too. Just make sure you document everything properly and check if your business insurance covers employee advances (some policies have specific clauses about this). One last thing - if your employee is in a real financial bind, remind him that he might qualify for an emergency hardship withdrawal from his 401k if he has one, or there might be local emergency assistance programs available. Sometimes there are options beyond just adjusting payroll.

Having dealt with similar situations in my small business, I'd definitely recommend the payroll advance route over the exempt W-4 approach. Here's why it's cleaner: When you process a payroll advance, you're essentially paying wages early but still handling all tax withholdings normally. So if your employee needs an extra $500, you advance that amount, withhold the appropriate taxes (federal, state, FICA), and he gets the net amount. Then on his regular payday, you simply reduce his gross pay by the $500 advance amount and process taxes on whatever remainder is due. The big advantage is that this keeps your tax compliance completely clean - no risk of improper exempt claims, no potential penalties for your employee at tax time, and your year-end reporting stays straightforward. A few practical tips: Document the advance agreement in writing (even just a simple note stating the amount and repayment terms), make sure your cash flow can handle it, and since you're using ADP, give them a heads up about processing the advance - they can walk you through coding it properly in their system. Your employee gets the emergency cash he needs, and you avoid any potential compliance headaches. Win-win situation for a valued employee who's been with you for three years.