Guys, I think there's some confusion about the forms. The 1099-MISC doesn't even have Box 7 for nonemployee compensation anymore - that was moved to the 1099-NEC a few years ago. So if you're getting self-employment income, it's probably coming on a 1099-NEC now, not a 1099-MISC. The 1099-MISC Box 3 is usually for things like prizes, awards, or other random payments that aren't for services you provided as part of a business. That's why it's not subject to self-employment tax.

Thanks everyone for all the detailed explanations! This has been super helpful. I was definitely mixing up the self-employment tax with regular income tax, and I had no idea about the form changes either. Just to make sure I understand correctly: my Box 3 income from the 1099-MISC will just be added to my other income and taxed at whatever bracket I end up in based on my total income for the year, right? So if I'm in the 22% bracket, that's what I'll pay on this income too? And @Cameron Black, thanks for mentioning the AGI impact - I hadn't thought about that at all. I should probably look into increasing my IRA contribution this year to help offset some of it. This community is amazing for breaking down confusing tax stuff!

has anyone actually gotten a refund after fixing this error? I made the exact same mistake but Im worried if I call the IRS theyre just going to audit me or something. my additional medicare tax was like $1,300 and thats exactly what my refund was short. so frustrating!!!

I had this EXACT same problem last year! Put my Additional Medicare Tax withholding on line 25c instead of line 26 and the IRS adjusted my refund down by that exact amount. It's such a common mistake because the Form 8959 instructions aren't super clear about where the withholding amount goes on the 1040. The good news is that once you understand what happened, it's usually fixable. Like others mentioned, the withholding from Form 8959 line 24 should go on line 26 with your other federal tax withholding, not on line 25c. The IRS computer system catches this and moves it to the correct line, which is why your refund calculation changed. If you haven't heard back from them yet with a correction notice, you might want to call and explain that you misreported the withholding location. Most agents understand this is a common filing error and can help you get it sorted out. Don't stress too much - you're definitely not the first person to make this mistake!

One thing nobody has mentioned yet - if you're dealing with a TON of transactions (like hundreds or thousands), you might want to consider using specific tax software for investors before importing to any tax software. I'm a day trader with over 1,500 transactions last year and I use special software to consolidate everything first, then just enter the summary in FreeTaxUSA. No mailing required. Also, keep in mind that the IRS already gets copies of your 1099s directly from brokers, which is why most e-filing doesn't require you to mail anything. The only time you typically need to mail supporting docs is if you're claiming something unusual that the IRS wouldn't automatically know about.

I switched from TurboTax to FreeTaxUSA two years ago and haven't looked back! To directly answer your question - yes, FreeTaxUSA handles summary reporting for 1099-B forms without requiring you to mail physical documents to the IRS when e-filing. I had a similar frustration with TurboTax constantly telling me I needed to mail supporting docs. With FreeTaxUSA, I just enter my summary totals from my 1099-B (total proceeds, total cost basis, total gain/loss) and the software handles everything electronically. No trips to the post office required! The interface isn't as flashy as TurboTax, but it's straightforward and way cheaper. Federal is free for most situations, and state filing is only about $15. I've saved hundreds compared to what I was paying TurboTax, especially since they kept pushing expensive "deluxe" versions for investment reporting. One heads up though - the first year switching will require manually entering your basic info and any carryovers from previous returns since they can't import TurboTax files. But after that, it saves everything for next year.

One thing i learned going from sched C to 1120s - PAYROLL IS A MUST!! u have to pay urself a "reasonable salary" which means payroll taxes u didnt have before. my accountant said its a red flag to the irs if u only take distributions and no salary. cost me about $45 per month for payroll service but saves headache with quarterly filings.

Don't forget about state-level requirements too! When I switched from Schedule C to 1120-S, I got hit with unexpected state franchise taxes and annual report fees that I didn't have as a sole prop. Some states also require you to publish a notice in local newspapers when you incorporate, which can cost a few hundred bucks. Also, if you're planning to have employees soon, you'll need an EIN (if you don't already have one) and will need to register for state unemployment insurance and workers' comp. The payroll requirements others mentioned are no joke - I use a service too because trying to handle all the tax deposits and quarterly filings manually was a nightmare. One more thing - make sure you keep really good records of corporate formalities (meeting minutes, resolutions, etc.) even if you're the only shareholder. The IRS can pierce the corporate veil if you don't maintain proper separation between personal and business activities.

This is exactly why I always recommend getting copies of everything before you hand over your documents to any tax preparer. In your situation, I'd suggest taking immediate action on multiple fronts: First, create an online account at IRS.gov to check your account transcript - this will show you exactly what's been filed under your SSN, including whether that extension was actually submitted. You can also see the status of your 2021 refund there. Second, send that certified letter Max mentioned, but also consider showing up at his office in person if it's local. Sometimes the threat of appearing in person gets preparers to respond when calls and emails don't. Third, start gathering recommendations for a new preparer NOW, even if your current one suddenly resurfaces. The October 15th deadline is approaching fast, and you don't want to be scrambling at the last minute. Look for someone who's an EA or CPA and has good reviews. Finally, document everything - dates of calls, texts sent, voicemails left. This paper trail will be crucial if you need to file complaints or pursue getting your $375 back. You shouldn't have to chase down someone you're paying to provide a service.

I went through something very similar two years ago and it was incredibly stressful. My preparer also filed an extension without telling me and then disappeared when I needed answers. Here's what I learned that might help you: The most important thing is to protect yourself from missing the October 15th deadline. Even if your preparer suddenly reappears, I'd strongly recommend getting a second opinion from another tax professional at this point. You can bring whatever documents you have copies of, and they can help determine what's missing and what needs to be done. One thing that helped me was filing a complaint with my state's consumer protection agency in addition to the tax-related complaints others mentioned. Since you paid $375 for services not properly rendered, this falls under consumer fraud. They often have more resources to help recover fees than the IRS complaint process. Also, if your preparer is part of a larger firm or franchise, contact their corporate office. They take these situations seriously because it affects their reputation and licensing. The silver lining is that you found out about this issue with enough time to take action. I know it feels overwhelming right now, but once you get your documents back and work with a reliable preparer, you'll get through this. Just make sure to keep detailed records of everything for potential reimbursement of penalties or additional preparation fees you might incur.