What happens if you didn't have any health insurance for part of the year? My 1095-C shows I was offered insurance but I declined it and had a gap of a few months before getting coverage at my new job.

The federal individual mandate penalty was effectively eliminated starting in 2019, so there's no federal penalty for having gaps in coverage. However, some states like California, Massachusetts, New Jersey, Rhode Island, and DC have their own individual mandates with potential penalties. If you live in one of those states, you might face a state tax penalty for the months you were uninsured. The 1095-C would help show that you were offered coverage but declined it, which might be relevant depending on your state's specific rules. I'd recommend checking your state's tax department website or consulting with a tax professional familiar with your state's requirements.

That actually makes sense now. Thanks for explaining this! Does my employer need to correct anything on the form, or is it actually filled out correctly showing what was offered rather than what I elected?

Oh crap, I didn't even think about that. So basically I need to estimate what I'll owe and make payments throughout the year? How do you figure out how much to pay each quarter?

Exactly - you need to estimate your annual tax liability and make quarterly payments. For most people, if you pay 100% of last year's tax liability (or 110% if your income is over $150,000), you'll be safe from penalties even if you end up owing more. You can calculate it more precisely using the worksheet in Form 1040-ES. Basically, estimate your annual income, calculate the tax on it, subtract any withholding from your W-2 job, and divide by 4. Your tax software should help with this too. Just remember that you need to include both income tax and self-employment tax (the 15.3% that covers Social Security and Medicare).

Does this work for things I already owned before starting the side gig? I've been using my personal laptop for my freelance work.

Thank you for this detailed breakdown! I wasn't aware of the Section 179 option at all. The insurance payment is a flat rate per visit with no specific travel component mentioned in the contract. Just to clarify - with the actual expenses method, can I deduct the percentage of the purchase price over time as depreciation? And do you recommend any specific apps for tracking mileage?

Yes, with the actual expenses method, you can deduct the business-use percentage of your purchase price through depreciation (typically over 5 years for passenger vehicles). There are annual limits on depreciation deductions for passenger vehicles, but vehicles over 6,000 lbs have more favorable treatment. For mileage tracking, my clients have good experiences with MileIQ, Everlance, and TripLog. Most have free versions to start with. The key features you want are automatic trip detection, easy business/personal categorization, and good reporting. Whatever app you choose, make sure you also document the purpose of business trips and keep supporting records of your appointments or on-call schedule to substantiate the business necessity.

I'm confused about the 6000 lbs rule - does that mean if I buy a big SUV or truck I get better tax treatment than a smaller 4x4?

Exactly! Vehicles over 6,000 lbs gross vehicle weight rating (GVWR) are classified differently by the IRS and aren't subject to the same depreciation limits as "passenger automobiles." This is sometimes called the "SUV tax loophole" and it can provide significant tax advantages. For example, in recent tax years, a vehicle over 6,000 lbs used primarily for business could qualify for much higher first-year depreciation than lighter vehicles. This is why you'll sometimes see tax advisors suggesting heavier vehicles to business owners. You can find the GVWR on the sticker inside the driver's door of most vehicles. Just remember, you still need to document the business use percentage accurately regardless of vehicle weight.

Do you know if Chase business cards offer something similar? I already have a Chase personal card and was thinking of sticking with them for my S Corp.

Chase does offer categorization and reporting for their business cards, though in my experience it's not quite as detailed as Amex. Chase's Ink cards give you quarterly reports and a year-end summary that breaks down expenses by category. The Chase mobile app also lets you tag transactions and add notes, which is helpful for remembering the business purpose. If you already have a relationship with Chase, it's definitely convenient to stick with them - just make sure you're supplementing their reports with your own record-keeping system.

This works until you get audited. My S Corp got audited last year and the IRS wanted documentation for every single expense over $75, including the business purpose. Just having separate cards wasn't enough.

That's really good advice - I wish I had done that! Do you think it's too late to try to get confirmation? I just sent it regular first class mail and have no proof of when I mailed it.

Unfortunately, without certified mail or some other tracking, it's difficult to prove when you sent it after the fact. For your current amendment, your best options now are checking the "Where's My Amended Return" tool periodically or contacting the IRS directly to confirm receipt. For future reference, always use certified mail with return receipt for any tax documents. The small cost (usually around $5-7) is absolutely worth the peace of mind. Keep the receipt permanently with your tax records. If the IRS ever questions when you submitted something, that green card receipt is golden proof that they can't dispute.

This is great advice! I tried this with my amendment last year and the transcript showed a "pending additional action" code about 2 weeks before anything showed up on the amendment tracker. Saved me a lot of anxiety wondering if my paperwork was lost in the void.