Thanks for pointing that out! I didn't know they were different forms now. Is there a penalty if you use the wrong form? Also, do you know if there's a minimum payment threshold before I need to file the 1099-NEC?

Yes, using the wrong form can cause issues and potentially delay your contractors from filing their taxes correctly. The IRS might flag the inconsistency which could trigger correspondence or even an audit in some cases. The threshold for filing a 1099-NEC is $600 in payments to a US contractor during the tax year. If you paid someone less than that, you don't need to file a 1099 for them, though you can still deduct the expense on your Schedule C.

Is this true for every state? I'm in Texas and I've never had to file 1099s with the state.

Thanks for this info! So for my situation, if I didn't file anything for 2024 (which would have been due April 2025), I still have time to do that? Do I need special forms or can I just use the regular tax filing websites?

Yes, you absolutely still have time! For your 2024 taxes (due April 2025), you have until April 2028 to file and claim your refund. You'll need to use 2024 tax forms specifically - most tax filing websites keep previous year forms available, but they might charge for filing previous years. You can also download the 2024 forms directly from the IRS website for free and mail them in. Just make sure you're using the forms for the correct tax year!

This is super important! If your parents claim you as a dependent (which they probably do if you're underage and they provide more than half your support), you still file your own return, but you have to check the box that says someone else can claim you as a dependent. It doesn't change the fact that you can get your withholding back though.

I didn't even think about that! I'll definitely check with my parents. They do pay for most of my stuff (housing, food, etc.) so I'm guessing they probably claim me. Does that mean I'll get less money back or something?

Thanks for this suggestion! I checked my W-2 and there's no code J in Box 12, which does suggest they're not accounting for my after-tax contributions. The Taxpayer Advocate Service sounds like a good next step. Did you need to provide specific documentation when you worked with them? And roughly how long did the process take to resolve?

I needed to provide whatever proof I had of my premium payments - in my case I had some old paystubs showing the deductions were taken after taxes. I also had an old benefits enrollment form showing I elected the coverage and was paying 100% of the premium. The process took about 3 months from my first contact with them until resolution. They assigned me a specific advocate who handled everything, including contacting the insurance company directly. The big advantage was having someone who knew exactly what documentation was required and what tax laws applied. Much easier than trying to navigate it myself.

Is there a way to tell from the w2 itself? My insurance company says they just report what the employer told them and can't change it without employer verification, but my employer is also out of business.

I'm using the 65.5 cents per mile rate for 2023, which I think is current. As for the standard vs. actual expenses, I was under the impression that for the first year I use the vehicle for business, I can choose either method, and then in subsequent years I'm locked in if I chose actual expenses first. Is that right?

You've got the current rate correct at 65.5 cents for 2023. And yes, you've got the rule right too - you can choose either method the first year you use the vehicle for business. If you choose standard mileage that first year, you can switch back and forth in future years. But if you choose actual expenses the first year, you're locked into that method for the life of that vehicle in your business. For a new business with lower income but high mileage, the standard mileage rate is often the better choice. It's also much simpler for record-keeping. Just make sure your mileage log is detailed and consistent!

This is great advice. I work in landscaping and we use zone pricing - we charge more for areas farther from our base. We also give "neighbor discounts" if we can service multiple properties in one area. It's been super effective at both bringing in more clients and reducing drive time.

7 What's the best way to track mileage? Is there an app you recommend or is the old-fashioned paper log still better?

13 I recommend a digital solution over paper logs. Apps like MileIQ, Everlance, or TripLog automatically track your trips using GPS and let you classify them as business or personal with a simple swipe. The most important thing is consistency. The IRS wants to see regular tracking, not estimates or reconstructed logs created after the fact. Even with an app, take a moment each day or week to classify your trips while they're fresh in your mind. Also document the business purpose for trips - just having the mileage isn't enough if you get audited.

15 Leasing can be simpler for taxes since you generally deduct the actual lease payments as a business expense based on your business use percentage. No Section 179 or depreciation calculations to worry about. But leasing usually costs more over time than buying. If you buy using Section 179, you get a bigger deduction upfront, which sounds like what you're looking for to reduce this year's tax bill. The trade-off is smaller deductions in future years.