Quick note: You mentioned you're not from this country - depending on your visa status and tax treaty, your eligibility for education credits might be affected. Some international students on certain visas can't claim these credits! Make sure to check your specific situation as an international student before claiming.

As an international student myself, I went through this exact confusion last year! First, you absolutely need to determine your tax residency status using the substantial presence test or if you qualify under a tax treaty. This determines whether you can even claim education credits. If you qualify as a resident alien for tax purposes, then yes - you can claim the Lifetime Learning Credit for your computer purchase since you paid for it yourself and aren't claimed as a dependent. The LLC allows 20% of up to $10,000 in qualified expenses, so your $2,500 computer could get you a $500 credit. However, the computer must be "required" for enrollment or attendance. Save your course syllabi that mention online submissions, emails about digital assignments, or any school documentation showing computer requirements. I had to provide this during my filing. One more thing - even though your parents paid tuition, if they don't claim you as a dependent AND you're eligible for education credits as an international student, you can still claim the LLC for expenses you personally paid. But double-check your visa status first - F-1 students in their first 5 years are typically nonresident aliens and can't claim these credits.

Just wanted to add that the penalties for failing to file quarterly estimated taxes as an independent contractor can be pretty significant too. Did your CPA mention anything about requesting a penalty abatement since you were misclassified and didn't know about the quarterly requirement? The IRS has a First Time Penalty Abatement policy that could potentially waive those failure-to-pay penalties if you have a clean compliance history. Might be worth asking about, especially if you're getting hit with both the misclassification AND penalties for not making quarterly payments.

This is exactly why I always tell people to document EVERYTHING when they suspect they're being misclassified. I went through this same situation two years ago and learned the hard way that the IRS looks for very specific evidence when making their determination. Some key things that helped my case: emails showing my boss setting my daily schedule, proof that I used company equipment exclusively, documentation that I couldn't subcontract my work to others, and evidence that I was required to attend company meetings and training. The more concrete evidence you have showing you were treated like an employee (not an independent business), the stronger your SS-8 and 8919 claims will be. Also, don't let your CPA's initial response discourage you. Worker misclassification cases are actually quite common and the IRS has established procedures for exactly this situation. If your CPA isn't familiar with these forms, consider getting a second opinion from someone who specializes in employment tax issues. A $17,000 tax bill is definitely worth fighting for, especially when you have a good case.

LOL at "I did it myself for the first time" - welcome to the club of "I'll never do that again"! 😂 But seriously, don't panic. I was shocked when I got a $4,200 bill from the IRS two years ago. Turned out I had completely messed up reporting my crypto trades (who knew you had to report EACH transaction?!). The good news is that if you respond to them with a reasonable explanation and are willing to work with them, they're actually not the monsters everyone makes them out to be. They put me on a payment plan with minimal hassle.

Before you do anything else, make sure to carefully read through every page of the notice you received. The IRS notice should include a detailed breakdown showing exactly what they believe you reported incorrectly versus what they have on file. Look for things like: - Unreported W-2 or 1099 income that employers/clients sent to the IRS - Incorrect Social Security numbers or dependent information - Math errors in calculating your tax liability - Incorrectly claimed deductions or credits The notice should also clearly state your response deadline (usually 30 days) and provide instructions for how to respond if you disagree. If you agree with their assessment, you can simply pay the amount owed. If you disagree, you'll need to send a written response with supporting documentation. One thing to keep in mind: if this is legitimate, acting quickly is important. The longer you wait, the more interest and penalties will accumulate. But don't rush into paying without understanding what went wrong - you have rights as a taxpayer to dispute incorrect assessments.

Has anyone used the TXF import file from their broker for this? My broker offers a TXF file that supposedly can be imported directly into TurboTax, but I'm not sure if it properly codes the futures options as Section 1256 contracts.

Thanks for starting this thread - I had the exact same issue last year with my futures options trades! One thing I learned that might help others is to double-check that your broker actually classified these correctly on your 1099-B. Some brokers are inconsistent with how they report futures options vs regular options. Also, if you're using TurboTax Premier or higher, there's a specific interview section for Section 1256 contracts that walks you through it step by step. It's under "Investment Income" then "Less Common Income" - look for "Gains and Losses from Section 1256 Contracts." This section will automatically generate Form 6781 for you. One last tip: keep detailed records of your trades including the contract specifications, because the IRS sometimes asks for additional documentation on these types of transactions during reviews. Better to be over-prepared than scrambling later!

Don't forget that if you have foreign financial accounts with aggregate value over $10,000 at any point during the year, you also need to file an FBAR (FinCEN Form 114). That's separate from the Section 988 currency gain issue but often applies to people in similar situations. The penalties for not filing FBAR are way worse than messing up the currency gain reporting.

Make sure you're keeping good records of the exchange rates on the exact dates of your transactions. The IRS wants to see that you're using either the actual exchange rate from your bank statements or an official government rate source. I learned this the hard way when they questioned my Section 988 calculations during a review.