Um, hate to be that person, but the bigger issue here is that your employer might be violating tax law by incorrectly issuing a 1099-NEC. This could be considered misclassification, which is pretty serious. If they're giving you educational assistance as an employee benefit, they MUST NOT issue a 1099-NEC which is explicitly for non-employee compensation. By doing this, they're essentially telling the IRS that you're an independent contractor for that portion of your compensation. Have you tried explaining this to your HR department rather than just finance? Sometimes HR understands the employment classification issues better than finance does.

This is frustrating but unfortunately common - I see this mistake with employers all the time. The key thing to understand is that your employer has created a documentation mismatch that you need to handle carefully. Here's what I'd recommend: Report the 1099-NEC income on Schedule C as "Other Income" but then take an offsetting business deduction for "Educational assistance incorrectly reported as contractor income." Keep the net effect at zero. The critical part is documentation. Make sure you have: - Your employer's written educational assistance policy - Receipts showing the payments went directly to the school - Any emails/paperwork showing this was processed as employee educational assistance - Screenshots of IRS Publication 970 showing $5,250 educational assistance exclusion If you get an IRS notice (which is likely), respond immediately with a letter explaining the employer's error and include copies of all your documentation. The IRS understands this happens and will usually accept the correction when properly documented. Don't just ignore the 1099-NEC - that will definitely trigger an automated notice. But also don't pay taxes on money that should be tax-free. The offsetting approach keeps you compliant while protecting your tax position.

If you have multiple types of adjustments to make on Form 8949, do you need to create separate line entries for each type of adjustment, even if they're for the same property?

Great thread! I've been dealing with similar Form 8949 issues and this has been really helpful. One thing I'd add is that if you're unsure whether something qualifies as a repair vs. improvement, the IRS uses what they call the "betterment, adaptation, or restoration" test. If your work makes the property substantially better than it was before, adapts it to a new use, or restores it to a serviceable condition after it had deteriorated, it's likely a capital improvement that can be added to basis using Code L. For example, replacing old single-pane windows with energy-efficient double-pane windows would be betterment. Converting a basement into a rental unit would be adaptation. Replacing a roof that was leaking badly would be restoration. All of these would qualify for Code L adjustments. Simple maintenance like fixing a leaky faucet or touching up paint wouldn't meet this test and can't be added to basis - those are just regular repair expenses.

Just wanted to add that I went through something very similar with Form 3520 penalties last year. After 9 months of radio silence, I finally received a letter saying my reasonable cause statement was accepted and no penalties would be assessed. From what I understand, these foreign reporting forms get routed to specialized units that are severely understaffed. No news is often good news in these situations - if they were going to hit you with penalties, they're usually quicker about that! But I know the uncertainty is stressful.

I'm dealing with a similar Form 3520 situation right now - filed late forms for 2021 and 2022 back in March 2023 and still haven't heard anything. The uncertainty is killing me! After reading through all these responses, I think I'm going to try requesting account transcripts first since that seems like the least invasive way to get some information. If that doesn't show anything useful, I might look into one of those services people mentioned to actually get through to the IRS. Isabella, have you made any progress since posting this? I'm curious to know if you've tried any of the suggestions and what worked (or didn't work) for you. The waiting game with these penalties hanging over our heads is brutal - especially when you know they can be so severe.

I've filed taxes for over 15 years now, and I've noticed a pattern - when I file in early February, I usually get my refund within 2 weeks. This year I filed on February 5th and had my refund by the 17th. But my sister filed on April 1st last year and didn't get her refund until mid-May. The earlier in the season you file, the faster the processing seems to be. The IRS gets absolutely slammed as the deadline approaches, so processing times tend to stretch out. If you filed recently, you might be in for a slightly longer wait than those early birds.

Congrats on filing your first return solo! 🎉 From what I've been seeing this season, the IRS is actually doing pretty well with processing times. Most people with straightforward returns (like yours sounds) are getting refunds in 10-14 days if they e-filed with direct deposit. The 21-day timeframe is more of a "worst case" estimate they give to manage expectations. Since you just filed and got accepted, I'd expect to see movement in the "Where's My Refund" tool within the next week or so. Keep checking every few days - once it shows "Refund Sent," you should see the deposit within 1-2 business days. The fact that you e-filed puts you way ahead of anyone still doing paper returns!

Has anyone noticed if the mileage rate changed this year? I'm trying to figure out if I should use standard mileage or actual expenses for my 1099 work.

Just wanted to share another tip for anyone still struggling with this - make sure you're keeping a detailed mileage log throughout the year, not just tracking total miles. The IRS wants to see date, destination, business purpose, and miles for each trip. I learned this the hard way during an audit a few years back. For H&R Block specifically, once you find that Car and Truck Expenses section (which everyone has helpfully pointed out the path to), you'll need to have your total business miles ready. The software will ask for your total miles driven during the year and your business miles - don't accidentally put the same number in both fields like I almost did! Also, if you're doing gig work like rideshare or delivery, those miles from picking up passengers/orders to drop-off definitely count as business miles. A lot of people miss those.