19 The benefits your employer is offering (vacation, sick days, holidays) are actually a red flag for proper 1099 classification. True independent contractors don't typically receive these employee-style benefits because they're supposed to be running their own business and setting their own schedules. Beyond the tax implications others have mentioned, consider this: if the IRS later determines you were misclassified, you could be liable for penalties and interest on unpaid taxes. Your employer would also face significant penalties for avoiding payroll taxes. My advice? Run the numbers both ways, but also document everything about your work arrangement - hours, location, equipment used, who controls your work methods, etc. This will help determine if you're legally supposed to be W-2 or 1099 regardless of what your employer offers. The classification should be based on the actual working relationship, not what sounds financially better.

This is a really complex situation that goes beyond just the tax math. While everyone's focused on the financial calculations, I want to emphasize what others have touched on - the legal classification issue is huge here. The fact that your employer is offering you "benefits" like vacation and sick days while calling you a 1099 contractor is a major red flag. The IRS looks at three main factors: behavioral control (do they control how you do your work?), financial control (do you have opportunity for profit/loss?), and relationship type (permanent vs project-based work, benefits, etc.). If you're doing the same job at the same location with the same schedule, just switching your tax classification doesn't make you a legitimate contractor. This could expose both you and your employer to penalties down the road. Before making any decision, I'd strongly recommend consulting with a tax professional who can review your specific work arrangement. They can help you understand not just the tax implications, but whether this classification change would even be legally defensible if questioned later. The short-term financial benefits might not be worth the long-term compliance risks.

One thing nobody's mentioned yet - you should also check if mpb.com has nexus in your state. If they don't have physical presence or economic nexus in your state, the rules might be different. Also keep in mind that some states have marketplace facilitator laws that might affect how this works. And don't forget that you might still need to FILE sales tax returns even if you don't COLLECT any tax (showing exempt sales).

Don't forget about the use tax side of this too! If you're paying sales tax on the cameras you buy from eBay but those cameras are inventory for resale, you might be eligible to use a resale certificate for THOSE purchases too. In most states, you can provide your resale certificate to avoid paying sales tax on items you're buying specifically for resale. This is possibly costing you money unnecessarily.

Don't forget that if your income was only $5,500 in 2019, you were only eligible to contribute that amount (or your earned income, whichever is less) to your Roth IRA, not the full limit which was $6,000 that year. A lot of people miss this detail - you can only contribute up to 100% of your earned income if it's less than the annual limit.

Just wanted to add a few practical tips for filing your Form 5329s based on my experience with a similar situation: 1. Mail each Form 5329 separately with its own check for the penalty amount. Don't combine years into one envelope - it can cause processing delays. 2. Calculate interest on the penalties using the IRS underpayment rates for each quarter since the original due dates. You can find these rates on the IRS website. Include the interest payment with each form. 3. Keep detailed records of everything - copies of forms, payment receipts, certified mail receipts if you use them. The IRS processing times have been longer lately. 4. Consider getting a transcript of your account after filing to confirm everything was processed correctly. You can request these online through the IRS website. The good news is that by self-correcting, you're avoiding much harsher penalties that could apply if this were discovered during an audit. The 6% excise tax is really quite reasonable compared to other IRS penalties.

Has anyone used FreeTaxUSA for prior year returns? Their software lets you prepare previous year returns for free and tells you exactly what forms to print and mail. That's what I did for my 2022 return with capital losses, and it was pretty straightforward. Just wondering if others had good experiences with it.

Just to add another perspective - I had a similar situation last year where I needed to establish capital loss carryover from 2022. I ended up going to a local VITA (Volunteer Income Tax Assistance) site and they helped me prepare the prior year return for free. The volunteer was really knowledgeable about capital gains/losses and made sure I had everything correct before mailing it in. They also helped me understand exactly how the carryover would work for my current year taxes. If you have a VITA site near you, it might be worth checking out - especially since you mentioned being new to tax stuff. They're specifically trained to help with these kinds of situations and it doesn't cost anything. You can find locations on the IRS website. Just make sure to bring all your documents (1099s, any previous year tax returns you have, etc.).

Just to add another perspective here - I've been dealing with multi-state partnership income for years and found that keeping a detailed spreadsheet is essential. You should track: 1. Each state where income is sourced 2. The type of income in each state (rental, business, etc.) 3. Whether the partnership itself files composite returns in each state 4. Each state's filing thresholds for nonresidents Not all partnerships handle state filings the same way. Some will file composite returns that cover your tax liability in their state, while others will just issue K-1s and expect you to handle the filings yourself. Also, don't forget that even if a state doesn't have income tax (like Nevada and Florida in your case), you might still have filing requirements if your partnership has presence in other states with income tax.

I think everyone is overlooking an important aspect of multi-state partnership reporting - the withholding requirements. Many states require partnerships to withhold taxes for nonresident partners, regardless of whether you ultimately need to file a return there. Check your K-1s carefully - they should indicate if any state taxes were withheld on your behalf. If taxes were withheld, you'll likely need to file a nonresident return in that state, even if you otherwise wouldn't have a filing requirement, just to get a refund of over-withheld amounts. This happened to me with a partnership that withheld Oregon state taxes at their highest marginal rate, but after applying deductions and credits, my actual Oregon liability was much lower. I had to file an Oregon nonresident return to get back about $2,300 in over-withheld taxes.