Just a tip from someone who's been driving for Uber/Lyft for 3 years - keep track of EVERYTHING. Miles are the big deduction, but don't forget: - Car washes (100% deductible for rideshare) - Phone mounts - Portion of your cell phone bill - Dash cams - Snacks/water for passengers (if you provide them) - Car maintenance I use the standard mileage deduction because it's usually better than actual expenses unless you have a very expensive car with high maintenance costs.

I think everyone already explained the deduction part well, but one IMPORTANT thing: You have to choose between standard mileage rate OR actual expenses in the first year you use the car for business. After that, if you used standard mileage the first year, you can switch between methods each year. But if you use actual expenses the first year, you're STUCK with that method for the life of that vehicle. Just something to keep in mind when making your decision!

Has anybody considered the step-transaction doctrine in this scenario? The IRS might look at the before/after ownership and conclude this was just a scheme to extract cash while avoiding dividend treatment.

One aspect that hasn't been fully explored is the timing of this transaction. If you're planning to do this near year-end or in conjunction with other corporate activities, the IRS will scrutinize the timing for tax avoidance motives. I'd also recommend documenting legitimate operational reasons for the acquisition well in advance. For example, if Corp B provides services or products that Corp A actually uses, or if there are genuine economies of scale from combining operations, make sure this is documented in board resolutions and business plans before executing the transaction. Another consideration: if Corp B has net operating losses or other tax attributes, there are complex rules under Sections 382 and 383 that could limit their use after the acquisition. This might actually reduce the overall tax efficiency of the structure. Have you considered whether a redemption under Section 302 might be a cleaner approach? If structured properly as a "substantially disproportionate" or "complete termination" redemption, you could potentially achieve capital gains treatment without the complexity of maintaining two corporate entities.

I have the code 766 with date 04/15/2023 What does this mean please

Hey Angela! I see you're dealing with the same Form 8812 issues that have been plaguing a lot of folks this tax season. The code 766 with a negative amount on 4/15/2022 is actually showing that the IRS processed an adjustment to your Child Tax Credit - the negative means it's a credit in your favor, not a deduction. Since you mentioned your tax preparer already filed an amended return to fix the Form 8812 error, that $3,000 should eventually be released to you. However, I'd definitely recommend calling the IRS to confirm the timeline, especially since you received that notice in March. The 570/571 codes on your transcript show there was a temporary hold that's been resolved, which is good news. Just be patient with the phone lines - try calling early morning for better luck getting through!

Everyone's overcomplcating this. Just have ur dad transfer the money to you as soon as it hits his paypal, keep records of all the transfers, and file schedule C with your tax return reporting your contractor income. Dad doesn't report it as income. You'll be fine as long as you have documentation. IRS only cares that the income gets reported and taxes get paid by SOMEONE.

Just want to add something important that I learned the hard way - make sure you're setting aside money for quarterly estimated taxes! Since you're an independent contractor earning $4,800, you'll owe both income tax AND self-employment tax (Social Security and Medicare). The self-employment tax alone will be about 15.3% of your net earnings. If you expect to owe $1,000 or more in taxes for the year, you're supposed to make quarterly payments to avoid penalties. You can use Form 1040ES to calculate this. I made the mistake of not doing quarterly payments my first year as a contractor and got hit with an underpayment penalty even though I paid everything when I filed my return. Also, keep track of any business expenses related to your contractor work - home office space, equipment, internet costs, etc. These can be deducted on Schedule C to reduce your taxable income.

One quick tip - you should still double check your state tax return too. Sometimes state tax systems don't sync up with the federal IRS system for corrections like this. I got a nasty surprise from my state tax department even though the IRS had the corrected information.

I went through something very similar a few months ago! The key thing to remember is that since the corrected 1099-NEC shows $0 income, you're not actually underreporting any taxable income to the IRS. The whole point of filing amendments is to correct discrepancies in reported income or deductions. Just make sure you keep both the original incorrect form and the corrected $0 form in your tax records. If the IRS ever sends you a notice asking about unreported income from the original 1099, you'll have the corrected form as proof that no income was actually earned. Also, definitely follow up with the company to confirm they submitted the corrected form to the IRS - not just to you. Some companies forget this step, which could cause headaches down the road when the IRS systems try to match their records with your return.