Don't you still have to report and reconcile the Advance Premium Tax Credit though? I don't think skipping it is even an option if you received APTC during the year, is it?

You're absolutely right. If you received advance payments of the premium tax credit (APTC) during the year, you must file Form 8962 to reconcile those payments regardless of which approach you take. What I meant was calculating your taxes both ways - taking the full PTC you're entitled to and deducting only premiums not covered by the PTC, versus repaying the APTC you received and deducting your full premiums as self-employed health insurance. But reconciling the APTC is mandatory either way.

I used TaxSlayer last year with a similar situation. You need to first complete the entire ACA/1095-A section with all your information from the Marketplace. Then when you get to the self-employed health insurance section, only enter the amount you actually paid out-of-pocket ($3,240 in your case). TaxSlayer isn't super clear about this but it does work correctly if you enter it that way.

Did you have any issues with state filing? I heard they don't support all states.

I didn't have any issues with my state filing, but I'm in California which is well-supported. Cash App Taxes supports most states, but they don't support multiple state filing, which is a big limitation if you lived or worked in more than one state during the tax year. They also don't support filing in Montana, Nevada, Wyoming, and a few others. There's a full list in their FAQ section if you want to check your specific state before starting.

I used Cash App Taxes with both a Roth and Traditional IRA last year. It handles basic retirement contributions well. There's a specific section for retirement accounts where you enter your contributions, and it calculates the deductions correctly. For SEP IRA it has the forms, but the guidance is pretty minimal compared to paid services.

Thanks for mentioning this! I hadn't even thought about the privacy aspect. Do you know if a PO box costs a lot? And would that cause any issues with the IRS since it's not a physical residence?

A PO box typically costs between $60-180 per year depending on size and location. The smallest box is usually sufficient just for receiving mail. The IRS has no problem with you using a PO box - they just want to be able to contact you reliably. One important detail though: some government forms and business registrations will ask for both a physical address AND a mailing address. In those cases, you'd put your cousin's address as your physical location and the PO box as your mailing address. This gives you the best of both worlds - official compliance plus privacy for your day-to-day business correspondence.

Great question! Prior to 2020, non-employee compensation was reported on 1099-MISC. Now it's reported on 1099-NEC (Non-Employee Compensation). As a freelance graphic designer, you'll receive 1099-NECs from clients who paid you $600+ in a tax year. The 1099-MISC is still used, but now it's for things like rent payments, prizes, awards, and other miscellaneous income that isn't for services performed as a non-employee. So for your graphic design work, clients should be issuing you a 1099-NEC, not a 1099-MISC.

Thanks for clearing that up! So I should be looking for 1099-NECs from my clients in January/February. One last question - do I need to give my clients a W-9 form first, or do they just send the 1099-NEC automatically?

What should I do if I already spent the money and didn't keep any of the paperwork? The check came like 6 months ago but I'm just now thinking about tax implications.

You should contact the settlement administrator immediately and request a copy of the settlement documents. Most administrators keep records for several years and can provide duplicates of the information that was sent with your check. If you can't get the documentation, you should report the full amount as "other income" on your tax return to be safe. It's better to potentially overpay taxes than to underreport income. Alternatively, you could consult with a tax professional who might be able to help you make a reasonable determination about what portion might be non-taxable based on the details of the class action settlement.

This happened to me! I got a 1099 for the full amount but had documentation showing part was for repairs. Should I just report what's on the 1099 or can I adjust it somehow?

19 I second this. I found a great tax attorney through my accountant. One thing I'd add is to make sure they have experience specifically with the type of issue you're dealing with. My first attorney was good with business tax but not so much with innocent spouse relief, which is what I needed.

3 Absolutely true. Tax attorneys often develop niche specialties within tax law. Some focus primarily on offshore reporting issues, others on employment tax, and some specifically on innocent spouse relief or offer in compromise cases. When interviewing potential attorneys, ask them what percentage of their practice involves innocent spouse cases specifically. If it's less than 15-20%, keep looking. Also, ask if they've handled cases with the specific IRS service center that will be processing your case, as procedures can vary slightly between locations.

4 Most of those national tax resolution firms that advertise heavily make unrealistic promises. The "pennies on the dollar" settlements (called Offers in Compromise) are quite rare and have very specific qualifying criteria - most people don't qualify. These companies often charge large upfront fees ($5,000+) and then do very little actual work. Many employ salespeople rather than tax professionals for initial consultations, and they're incentivized to tell you what you want to hear. I've had many clients come to me after wasting thousands with these services.