Bro why do tax preparers give such garbage advice sometimes? This is literally basic tax stuff smh

Your tax preparer definitely gave you bad advice here. The IRS specifically asked for BOTH forms for a reason - the 1095-A shows what you received from the marketplace, but the 8962 is what actually reconciles your premium tax credits on your return. Without the 8962, they can't verify that you claimed the correct amount of credits. I'd recommend getting both forms together and sending them as requested, or you'll likely just get another letter in a few months asking for the missing 8962.

Wait, I thought Schedule C doesn't even have a place for COGS unless you check the inventory box? If you're getting stuff for free, can't you just leave that box unchecked and avoid the whole COGS section entirely?

I've been dealing with a similar situation in my resale business. One thing that helped me was understanding that the IRS Publication 334 (Tax Guide for Small Business) specifically addresses inventory valuation methods, including situations where you acquire goods at little to no cost. The key insight I learned is that even with zero-basis inventory, you still need to maintain proper records showing the flow of goods through your business. This actually protects you more than it hurts you - it demonstrates that you're running a legitimate business operation rather than just having unexplained income. For your $150 in actual purchases, definitely include those in COGS. For the free items, track them with zero cost but document the source (donations, estate sales, etc.). This creates a clear paper trail that supports your business model if you're ever questioned. Your high profit margin becomes explainable rather than suspicious when you have proper documentation showing legitimate acquisition methods.

Just want to add something no one mentioned yet - if you're self-employed, don't forget about the self-employment tax (15.3% for Social Security and Medicare)! Deducting education expenses on Schedule C doesn't just save you income tax, it also reduces your self-employment tax. Sometimes that makes the business deduction more valuable than education credits, depending on your situation.

This is such a helpful thread! As someone who's also navigating the self-employment + student combo, I wanted to add that timing can really matter here. If you're planning to graduate soon and your income is expected to increase significantly after graduation, it might be worth considering whether to take the business deduction this year (which reduces your current SE tax burden) or save some expenses for next year when you might be in a higher tax bracket. Also, keep really detailed records of which specific courses relate to your consulting work. The IRS likes to see a clear connection between the education and your business activities. I keep a simple spreadsheet noting how each class directly applies to the services I provide - makes it much easier come tax time! One last thing - if you're paying for textbooks, software, or other course materials that you also use for your freelance work, those can often be deducted as business expenses too, separate from tuition.

Quick question - does the 1042-S/1040NR filing affect your ability to use tax preparation software? I tried using FreeTaxUSA last year and it couldn't handle my situation at all.

Just to add another perspective - I'm also an international student (from Canada) and went through this same confusion last year. Even though my scholarship was fully exempt under the treaty, I still had to file the 1040NR to officially claim that exemption. One thing that helped me was keeping really good records of which treaty article applied to my situation (Article XX for scholarships in the US-Canada treaty). The IRS wants to see that you're actively claiming the treaty benefit, not just ignoring the 1042-S form. Also, don't stress too much about making small mistakes on the form - the important part is filing it and clearly indicating your treaty position. I made a minor error on Schedule OI last year and the IRS just sent a letter explaining the correction, no penalties or anything scary. The whole process is definitely annoying, but it's worth it to stay compliant and protect your visa status. Good luck with your filing!

Has anybody used Kinder Spankneberg & Co for cost segregation? My CPA recommended them but their quote is about $1,500 higher than recostseg.

Thanks for starting this thread! I'm in a similar situation - just closed on my first duplex last month and my CPA mentioned cost segregation but I wasn't sure where to start. Reading through everyone's experiences has been super helpful. One thing I'm curious about - for those who've done cost segregation studies, did you do them in the first year of ownership or can you go back and do them later? I'm wondering if I should rush to get one done before filing this year's taxes or if I have more flexibility on timing. Also seeing a lot of mixed opinions on company selection. Sounds like the engineering-based approach and audit support are key factors to consider over just price. The potential tax savings everyone is mentioning definitely seem to justify paying for quality work!