It depends on how the school district classifies you. Most public school districts treat subs as W-2 employees, but some private schools or tutoring companies might classify you as an independent contractor (1099). The classification isn't just about what they decide to call you - it's based on factors like how much control they have over your work. If they're controlling when, where and how you work, providing training, tools, etc., you SHOULD be classified as an employee regardless of what they call you.

This is really eye-opening! I had no idea about the misclassification issue. Looking back, the learning center did give me specific curricula to follow and set my schedule pretty rigidly. They also required me to attend training sessions. That sounds more like employee treatment than independent contractor, right? How do I know if it's worth pursuing the SS-8 form? Is there a downside to challenging their classification, especially if I might want to work with them again in the future?

Wow, that's a really important point I hadn't even considered. I'm in Texas for my businesses, but I'll definitely look into any state-specific requirements. Did you have to completely pay off your state taxes or were you able to set up a payment plan to allow the new LLC formation?

In California, I had to either pay in full or get on an approved payment plan before they would allow the new registration. I ended up paying in full because it was about $3,200 and I just wanted it done with. But I know other states can be more flexible. Texas is generally more business-friendly than California (who isn't, right?), but definitely check with the Texas Comptroller's office. From what I understand, Texas doesn't have the same strict franchise tax block on new formations that California does, but policies change all the time. Better to know before you spend money on filing fees and get denied.

This is really helpful advice! I'm curious about the timeline - how long did it take you to get your payment plan set up with the IRS? I'm eager to move forward with my new business idea but want to make sure I handle the old debt properly first. Also, did having the payment plan in place help when you applied for business banking with your new LLC?

This is exactly the kind of detailed advice I was hoping for! The line-by-line breakdown approach makes so much sense - I've been thinking about this too generally instead of being specific about each disputed item. Quick question: when you sent your partial payment, did you include it with the same mailing as your response letter, or send the payment separately? I'm worried about them processing the payment but not properly noting my disputes if everything arrives together. Also, do you remember roughly how long it took them to cash your partial payment check? I'm trying to get a sense of their processing timeline since I'm cutting it close to the deadline.

Great question about the payment and letter! I sent everything together in one package - the response letter, supporting documentation, and the check. The key is to reference the check amount and purpose clearly in your letter so they can't process one without the other. In my case, they cashed the partial payment check about 10 days after I sent it (I could track this through my bank), but it took them almost 3 weeks to actually update my account to show they'd received my dispute documentation. That's why certified mail with return receipt is so important - it proves they got everything by your deadline even if their internal processing is slow. One tip: make a copy of the check before you send it, and write "PARTIAL PAYMENT - SEE ATTACHED CORRESPONDENCE" in the memo line. This creates a paper trail linking your payment to your dispute letter. Also include a cover letter that specifically states "This partial payment of $X represents agreement with adjustments A, B, and C only. I dispute adjustments D, E, and F as detailed in the attached response." The IRS systems are designed to handle partial agreements, so don't worry about them getting confused. Just be crystal clear about what the payment covers versus what you're still disputing.

I haven't personally used the IRC 6603 deposit option, but I've seen it work well for others in similar situations. The key language you want to include in your letter is something like: "Enclosed is a deposit of $X,XXX made pursuant to IRC Section 6603. This deposit is being made to stop the accrual of interest and penalties on the disputed assessment while I continue to challenge the remaining adjustments through proper administrative channels." Make sure to also state clearly: "This deposit does not constitute agreement with the IRS's position and I reserve all rights to dispute the underlying assessment." On your check, write "IRC 6603 DEPOSIT" in the memo line. Your combination approach sounds smart - trying for the extension first gives you the best outcome, but having the deposit strategy as a backup protects you if the extension doesn't work out. Just make sure whichever route you take, you send everything certified mail well before your deadline. Good luck!

Thank you, this is actually really helpful! Many of our clients do use DRIPs, and I hadn't considered how that might impact the reporting. I'll check their account settings tomorrow. Do you know if there's any specific section on the 1099-B that would indicate DRIP transactions versus normal sales?

Most 1099-Bs won't specifically label them as DRIP transactions - they'll just appear as regular buys and sells. However, you can usually identify them by looking for very specific patterns: transactions on dividend payment dates, odd/fractional share amounts, and identical trade dates for both purchase and sale. Sometimes there will be a transaction code or a notes field with an indicator like "DRIP" or "DIV REINV" but this varies widely by brokerage. Your best bet is to pull the transaction history report alongside the 1099-B and look for these patterns, especially focusing on dividend payment dates for the securities in question.

This is incredibly helpful, thank you! The mutual fund exchange scenario makes a lot of sense and I bet that's what's happening with at least one of my clients. I love the idea about keeping a tracking spreadsheet - I'm definitely going to start doing that. One question though - when you mention tax-free exchanges between fund families, are those reported as separate buy/sell transactions on the 1099-B, or do they show up as a single exchange transaction? I want to make sure I'm interpreting the documents correctly when I see these patterns. Also, has anyone found that certain brokerages are better than others at providing clear documentation for these types of transactions? Some of our clients' statements are much clearer than others about what actually happened.

@Lucas Bey, this is exactly the kind of professional insight I was hoping to find! So just to confirm - when I eventually sell those replacement shares that have the adjusted cost basis, those previously disallowed losses will finally be recognized and help offset any gains? And regarding the specific identification vs FIFO question that @Carlos Mendoza asked - I m'curious about this too. I do quite a bit of trading and if there s'a way to minimize accidental wash sales through lot selection, that would be incredibly helpful. Could you elaborate on how specific identification works in practice?

@Lucas Bey Absolutely! When you sell those replacement shares, the previously disallowed losses become part of your cost basis, which means they ll'reduce your taxable gain or (increase your deductible loss at) that time. Regarding specific identification vs FIFO - FIFO First (In, First Out automatically) sells your oldest shares first. Specific identification lets you choose exactly which lots/shares to sell. This is huge for tax planning! For example, say you bought ABC stock on Jan 1st at $100/share and again on Feb 1st at $120/share. If ABC is now trading at $110 and you want to sell some shares: - FIFO would sell the Jan 1st shares creating (a $10/share gain -) Specific ID lets you sell the Feb 1st shares creating (a $10/share loss This) control helps you avoid wash sales by ensuring you re'not inadvertently selling at a loss when you have recent purchases of the same security. Most brokerages let you change this setting online or by calling them. @Carlos Mendoza @Anastasia Romanov Hope this helps clarify both concepts!

Thanks for sharing your experience @Luca Bianchi! This whole thread has been incredibly helpful. I was getting really stressed thinking I might owe taxes on both the net gain AND somehow need to account for that $373k wash sale amount separately. Your point about the 30-day window extending into the new year is something I hadn't considered. I do some trading in December/January so I'll definitely need to be more careful about that timing. One quick follow-up question for anyone who might know - if I had wash sales that crossed over from December to January, would those show up on this year's 1099 or next year's? I'm wondering if I need to double-check anything for potential cross-year wash sale issues. But the main takeaway I'm getting is: report the $55,786.95 net gain on Schedule D and I'm done. The wash sale complexity has already been handled by my brokerage. Such a relief!