Have you ever tried asking the payroll service to waive the fees for the months you're not running payroll? I've heard some people have had success with that, especially if you tell them you're considering switching to a pay-as-you-go provider.

I actually did try negotiating with Gusto my first year, but they wouldn't budge on the monthly base fee. They explained that even when I'm not running payroll, their system is still maintaining my account, handling compliance updates, and keeping my data secure. I looked into pay-as-you-go options, but for my situation, the convenience of staying with one system and having all my historical data in one place was worth the extra cost. Plus, Gusto handles all my tax filings automatically, which saves me time with those quarterly Form 941s. I just check the numbers before submission.

Do you have any ballpark on what your CPA charges for this service? I'm trying to compare options and everything seems so expensive for basically running payroll once a year.

I pay about $350 for the annual payroll processing, which includes all the year-end forms, tax filings, and payroll calculations. They also charge about $75 per quarter for filing the zero-wage Form 941s, so all in I'm paying around $575 annually. This was much cheaper than the $468+ I would pay for the annual subscription to even the most basic payroll services ($39/month). Plus, I get the benefit of having professional eyes on my numbers who can advise on optimal salary levels and help document reasonable compensation determinations.

Is there any way to tell if I actually owe money to the state vs federal? I'm paranoid I'm going to mail something to the wrong place and then get in trouble for not paying.

Yes, as a 1099 contractor you can absolutely deduct mileage for driving between job sites (but not commuting from home to your first job site of the day or from your last job site back home). For 2025, you can either take the standard mileage rate or track actual expenses like gas, maintenance, etc. The standard rate is usually easier - just keep a log of business miles driven. Also keep those receipts for tools and work clothes! Those are legitimate business expenses you can deduct on Schedule C.

Make sure your boss is actually classifying you correctly! Some employers try to call people "contractors" to avoid paying employment taxes when legally they should be treating them as employees. If they control WHEN and HOW you do the work (vs just the end result), you might actually be misclassified.

Are you a W-2 employee? If yes, then unfortunately no - those home expenses aren't deductible for regular employees anymore. If you're a 1099 contractor, then yes you could deduct the business portion of those expenses (would need to calculate what % is for work vs personal use).

Would an email work instead of certified mail? I have all their texts demanding payment for the shirts, but I'm not sure I want to spend money on certified mail to these jerks.

Email isn't ideal because it's easier for them to claim they never received it. The certified mail creates an official record that they received your communication, which is important if this escalates further. The $4-5 for certified mail is worth it for the paper trail it creates. That said, if you do use email, make sure to request a read receipt and save all correspondence. The texts demanding payment are good evidence already, so keep those too. The key is documenting everything in case you need to prove harassment later or defend yourself if they try to send this to collections.

That's a good point - OP should look up the IRS Whistleblower Program. If the employer is systematically underreporting wages, the IRS takes that very seriously and you could potentially get a reward if your information leads to the recovery of unpaid taxes. The reward can be 15-30% of what the IRS collects!

Really? That's interesting. My HR department said the 3921 form was all I needed and that I'm responsible for figuring out the taxes. I'll double check with them about the W-2 reporting. If they won't issue a corrected W-2, is there any downside to reporting it as "Other Income" instead?

There's not really a downside to reporting it as "Other Income" - you'll pay the same amount of tax either way. The main difference is that Other Income isn't subject to FICA taxes (Social Security and Medicare), whereas if it were on your W-2, it would be. Many companies don't correctly report ISO disqualifying dispositions on W-2s because their payroll systems aren't set up to track when employees sell shares. That's why they issue the 3921 form but leave the tax reporting to you. Just make sure you have documentation of everything in case you're ever audited. The 3921 plus your brokerage statements showing the sale should be sufficient.

If you haven't exercised yet, you have options to possibly reduce taxes. The key is to try to get a qualifying disposition rather than disqualifying. To do this, you need to: 1) Hold the shares for at least 1 year after exercise AND 2) Hold the shares for at least 2 years after the option grant date If you meet both conditions, only the difference between sale price and strike price is taxed, and it's taxed as long-term capital gains (usually lower rates) rather than ordinary income.