Random question but has anyone used TurboTax Self-Employed for calculating the QBI deduction for an engineering LLC? I tried last year and it seemed to automatically disqualify me completely when I selected "engineering services" even though my income was under the threshold. Had to override it manually and now I'm worried about getting audited.

Great question about the QBI deduction! As an engineering consultant myself, I can confirm that you can absolutely qualify for the 20% deduction even though engineering is considered an SSTB. The key is your income level - since you're married filing jointly and under the $340,100 threshold, you should get the full deduction regardless of the SSTB designation. One thing I'd add to the excellent advice already given - when you do convert to S-corp (which sounds like a smart move for your income level), make sure you understand that the QBI deduction applies to the K-1 income from the S-corp, not your W-2 wages. So if you're paying yourself $120k in salary and taking $80k in distributions, only the $80k would be eligible for the QBI deduction. Also, definitely keep detailed records of your business activities. I've found that many engineering consultants actually do work that falls outside the strict SSTB definition - things like project management, training, or business process consulting. These activities might qualify for QBI even above the income thresholds if properly documented.

Just as a practical tip - I always staple the incorrect 1099 behind the corrected one and write "SUPERSEDED" in big letters across the front of the incorrect one. That way if I need to reference my paperwork later, there's no confusion about which form was the final version.

My accountant told me that income isn't technically "received" until you have access to it. Since your check was lost and the money went back into your Zazzle account, you technically haven't received it yet for tax purposes. The corrected 1099 showing $0 is the right approach by the company. You'll report that income in whatever tax year you actually get the money - either by successfully receiving a check or using the funds from your account in some way that constitutes receipt of income.

Hey Cedric! I went through something very similar with my 2019 taxes last year. The good news is that once you receive the partial disallowance letter, the IRS has already made their determination and your adjusted refund should be processed relatively quickly. In my case, I received my $450 adjusted refund about 3 weeks after getting the letter. Since you mentioned it's for a business expense deduction (I saw your comment below), those typically process faster than credit-related adjustments. The IRS usually deposits these payments using the same method you chose on your original return - so if you had direct deposit set up, it should go to the same account. One thing that helped me was checking the letter for any specific processing codes or timelines mentioned in the fine print. Sometimes they include estimated processing dates that aren't obvious at first glance. If it's been more than 4-6 weeks since you got the letter, definitely call the number printed on it - those specialized lines are usually much better than the main IRS number.

I just went through this exact situation a couple months ago with my 2019 return! Got the partial disallowance letter in January and was so confused about what would happen next. In my case, it took exactly 19 days from when I received the letter to when the adjusted refund hit my bank account. Mine was also for a business expense issue - I had claimed some equipment purchases that the IRS couldn't verify with the documentation I provided. The thing that stressed me out was that there's really no way to track the progress once you get that letter. The "Where's My Refund" tool on the IRS website didn't update until the very last day, and even calling didn't give me much additional info beyond "it's processing." Since you mentioned your issue is also with business expenses, you're probably looking at that 2-4 week window everyone's talking about. The silver lining is that once they send you that letter, the hard part (their review and determination) is already done. Now it's just a matter of their payment processing system doing its thing. Hang in there - I know the waiting is nerve-wracking, but your money is definitely coming!

Has anyone here actually gotten audited by the IRS for premium tax credit issues? I'm in a similar situation but honestly thinking about just claiming the credit for all months and seeing what happens. It's only about $340 for that overlap month and seems like a lot of hassle to figure out.

I went through almost exactly this situation last year and can confirm what others have said - you'll need to repay the APTC for that overlap month. The IRS considers you ineligible for the premium tax credit during any month when you were eligible for qualifying employer coverage, regardless of whether you actually used both plans. A few practical tips from my experience: 1. Make sure to check your employer's plan documents for the exact eligibility date - sometimes it's different from when coverage actually starts 2. Keep documentation of when your employer coverage began in case the IRS asks for proof later 3. The repayment caps mentioned earlier can really help limit what you owe if your income qualifies One thing that caught me off guard was that my tax software initially missed the overlap entirely until I manually entered the employer coverage dates. Double-check that your software is accounting for both coverages correctly when calculating your Form 8962. The good news is that even though you have to repay that month's APTC, you can still claim the premium tax credit for the other 6 months where you only had marketplace coverage. It's frustrating but not as bad as having to repay everything!

Has anyone actually gotten FreeTaxUSA to correctly calculate the tax credit for income tax withheld on 1042-S? I tried reporting it as suggested here but my refund calculation seems off.

I went through this exact same situation two years ago! As a tax resident filing jointly, FreeTaxUSA definitely works for 1042-S reporting, but you need to be careful about a few things that haven't been mentioned yet. First, double-check that your 1042-S shows the correct tax treaty benefits applied (if any). Sometimes universities mess this up even for tax residents. If you see treaty benefits applied when you shouldn't have them as a resident, you'll need to contact your university's payroll office to get a corrected 1042-S. Second, when entering the fellowship income as "Other Income" on Schedule 1 Line 8z as Chloe mentioned, make sure to also check if any of it qualifies for the American Opportunity Tax Credit or Lifetime Learning Credit. Fellowship money used for qualified education expenses can sometimes still allow you to claim these credits for other educational expenses you paid out of pocket. Also, since you mentioned HSA contributions - fellowship income actually counts as earned income for HSA contribution purposes, which is great news if you're trying to maximize your HSA contributions for the year. The combination of FreeTaxUSA plus getting official IRS guidance through something like Claimyr (as Sophie mentioned) is honestly your best bet for peace of mind on a complex situation like this.