Don't forget about self-employment tax! On $105k of net income, your SE tax alone will be around $14,800 (15.3% of 92.35% of your net income). That's ON TOP of your income tax. This is the part that shocked me my first year freelancing. I had saved for income tax but completely forgot that I now had to pay both sides of Social Security and Medicare. Make sure you're calculating your quarterly payments including BOTH income tax AND self-employment tax!

Just to add another perspective - I'm a freelance graphic designer and was in a similar situation last year with around $120k in 1099 income. Here's what I learned the hard way: The penalty isn't just about the percentage - it's also about cash flow. Even if you're willing to pay a penalty, having to come up with $25,000-30,000 all at once in April can be brutal. I thought I had enough saved, but then had some unexpected expenses in March and suddenly scrambling to pay my tax bill was incredibly stressful. What worked for me was setting up automatic transfers to a separate "tax account" every time I got paid. I transfer 30% immediately - covers both income tax and self-employment tax with a small buffer. Then I make the quarterly payments from that account. Takes the guesswork and stress out of it. Also, don't forget that if you end up owing more than $1,000 when you file, you might be required to make estimated payments the following year regardless. So you might as well get into the habit now rather than dealing with penalties and scrambling later.

Has anybody here actually gone through the full SS-8 process from filing to determination? Everything I've read online suggests it takes forever to get a ruling. I'm wondering if it's even worth it or if I should just suck it up and pay the self-employment taxes to avoid the hassle?

I'm dealing with a very similar situation right now - got misclassified by an employer who had me working set hours at their location using their equipment, but they issued a 1099 instead of a W-2. The self-employment tax burden is crushing! From what I've researched, you definitely have a strong case for employee classification based on the IRS's common law test. The fact that both employers controlled when, where, and how you worked are major red flags for misclassification. I'd recommend filing the SS-8 and 8919 together rather than waiting. Even though the SS-8 determination takes months, you can use code G on Form 8919 to indicate you're filing it along with an SS-8. This way you only pay the employee portion of Social Security and Medicare taxes (7.65%) instead of the full 15.3% self-employment tax while you wait for the determination. If the IRS rules in your favor on the SS-8 (which sounds likely given your situation), your former employers will be on the hook for their portion of the employment taxes plus penalties. You might even get a refund if you initially paid more than the employee portion. Don't let these employers get away with shifting their tax burden onto you - file those forms and protect yourself!

As someone who's been driving for rideshare for about 8 months now, I can definitely relate to the confusion! Here's what I learned the hard way: Keep EVERYTHING organized from day one. I use a simple spreadsheet to track all my expenses weekly - it takes maybe 10 minutes but saves hours during tax time. For your specific situation with 30 hours/week driving, you're probably looking at around 70-80% business use on your vehicle. Run the numbers on both methods, but with a newer leased vehicle like your Camry, standard mileage often comes out ahead. One thing I wish someone had told me: those car washes are 100% deductible as a business expense if you're doing them specifically for rideshare (which it sounds like you are with 2x weekly). Same with your phone mount, charger cables, and any passenger amenities. Also - and this is crucial - start making quarterly estimated tax payments NOW. I got hit with a penalty my first year because I waited until tax season. The IRS expects you to pay as you go when you're self-employed. Set up a separate savings account and automatically transfer 25-30% of your rideshare earnings there. Trust me on this one - April will come faster than you think!

One thing that might help you decide between standard mileage vs actual expenses - keep detailed records for both methods for the first few months, then compare. Since you're driving 30+ hours weekly in a leased vehicle, the standard mileage rate ($0.67/mile for 2025) might actually work out better, especially if you're putting on a lot of miles. A few additional deductible expenses I didn't see mentioned: - Hand sanitizer and cleaning supplies (became huge during COVID and still relevant) - Parking fees when waiting for rides - Background check fees that Uber/Lyft charge annually - Portion of your auto insurance deductible if you have an accident while driving For record keeping, I'd suggest taking photos of all receipts and storing them in Google Drive or similar. Credit card statements help, but the IRS really wants to see itemized receipts showing what you bought and when. Since you mentioned spending $280-350/week on gas, you're probably driving 1,200+ miles weekly. At the standard rate, that's potentially $800+ in weekly deductions just from mileage. Definitely run those numbers! Also consider getting a business credit card just for rideshare expenses - makes tracking so much easier come tax time.

I went through something very similar last year - had the 420 code appear on my transcript in September but didn't receive the actual audit letter until mid-November. The IRS mail system is incredibly slow right now, especially if there are any address issues. One thing that helped me was pulling my wage and income transcript (not just the account transcript) to see if there were any discrepancies between what I reported and what third parties reported to the IRS. Sometimes audits are triggered by mismatches that aren't immediately obvious. Given that you moved twice in 2022, I'd strongly recommend calling the IRS practitioner priority line (if you have representation) or using one of the callback services mentioned in other comments. The address issue could mean your audit letter is sitting in limbo somewhere, and missing the response deadline could turn a simple correspondence audit into something much more complicated. Also, keep in mind that the NIIT adjustment being in your favor doesn't necessarily mean it was correct - the IRS computers make automatic adjustments all the time that later get reviewed by humans. I'd definitely have your investment income documentation ready along with your home office records.

I've been through a similar situation and can offer some reassurance. The 420 code with an August date means the examination was initiated then, but the IRS correspondence process is extremely backed up right now. You could easily be looking at 60-90 days before receiving the actual letter, especially with your address changes. A few practical suggestions based on my experience: 1. **Address verification is critical** - File Form 8822 immediately if you haven't already. Even if you think your address is current, the IRS often has outdated information that can delay or misdirect correspondence. 2. **The NIIT adjustment is likely the trigger** - In my case, any time the IRS made an adjustment in my favor (even automatically), it got flagged for human review later. The system probably corrected what it thought was an error, but now an examiner wants to verify the calculation was actually correct. 3. **Document everything now** - Gather your 2022 investment statements, Form 8960 worksheets if you filed one, and any supporting documents for the NIIT calculation. Also prepare your home office documentation just in case, but I'd bet money it's the NIIT issue. 4. **Don't panic about timing** - Even if the letter is delayed, the IRS is generally reasonable about response deadlines when there are mail delivery issues, especially if you can document when you actually received it. The waiting is the worst part, but you're being proactive by preparing now. Most correspondence audits are resolved pretty quickly once you provide the requested documentation.

Something important that hasn't been mentioned yet - even if you can't deduct the mortgage interest, make sure you're tracking these payments carefully for potential future tax benefits. If your brother eventually sells the house at a profit, your contributions could affect the calculations. Also, have you considered refinancing so you're added to the deed? That would solve the deduction problem going forward, though it might trigger transfer taxes depending on your state. Another option might be drawing up a formal loan agreement between you and your sibling, which could potentially convert some of your payments into loan interest that might be reportable differently.

One thing I don't see mentioned yet is the potential state tax implications. While federal law is pretty clear about needing both legal liability AND ownership for the mortgage interest deduction, some states have different rules or additional deductions that might apply to your situation. For example, some states allow deductions for property taxes paid on behalf of family members, or have specific provisions for co-signers who make payments due to the primary borrower's financial hardship. Since you mentioned your brother lost his job and had medical issues, this could potentially qualify as hardship in certain states. I'd recommend checking your state's tax code or consulting with a local tax professional who knows your state's specific rules. The federal restrictions don't necessarily mean you're out of options entirely - there might be state-level benefits you can claim even if the federal mortgage interest deduction isn't available. Also, keep detailed records of which payments went to principal vs. interest vs. escrow (taxes/insurance). Even if you can't use the mortgage interest now, this documentation could be valuable for other tax situations down the road.