The form you need is Form 4797 Part III for this situation. You'll report the business percentage of the car, the sale price, and your adjusted basis. The key is calculating that adjusted basis correctly by subtracting all the depreciation you took (or were deemed to have taken with standard mileage). The IRS Publication 463 has charts showing the depreciation portion of the standard mileage rate for each year. For example, it was 26 cents per mile in 2022, 25 cents in 2021, etc. Multiply your business miles each year by that year's rate to get your total depreciation.

This is a perfect example of why keeping detailed records is so important for rideshare drivers! What you're experiencing is completely normal but definitely confusing the first time you encounter it. The key insight that others have mentioned is that the standard mileage rate isn't just covering gas and maintenance - it includes depreciation too. So every year you claimed those business miles, the IRS was essentially saying "okay, we'll let you deduct this amount, but we're also going to reduce what you 'own' in this car by the depreciation portion." One tip for the future: if you do rideshare driving again, consider keeping a simple spreadsheet tracking your total business miles each year and the depreciation rates. That way when you eventually sell your next vehicle, you won't be surprised by the tax implications. You can find the historical depreciation rates in IRS Publication 463. Also, remember this "gain" will likely be taxed as ordinary income (depreciation recapture) rather than capital gains, so factor that into your tax planning!

One thing nobody's mentioned - be careful about how this affects your estimated tax payments! If you were paying quarterly estimated taxes as a sole prop and then switched to S-Corp mid-year, the calculation gets tricky. When I converted, I underpaid my estimated taxes and got hit with a penalty. Make sure your accountant helps you figure out the right amounts for each business structure during the respective periods.

You're absolutely right to be concerned about that second accountant's advice. Filing S-Corp returns for periods when you weren't actually operating as an S-Corp is risky and could cause serious issues down the road. The incorporation date error needs to be corrected properly. Here's what I'd recommend: 1. File Form 8822-B to correct the business information with the IRS. Include a detailed letter explaining the error and attach documentation showing your actual incorporation date. 2. For 2024 taxes, file as a sole proprietor (Schedule C) for January through June, then file a short-year S-Corp return (Form 1120-S) for July through December when you were actually operating as an S-Corp. 3. Don't worry about "drawing attention" to yourself - correcting errors is normal and expected. The IRS processes these corrections regularly. The key issue is that S-Corp status comes with specific requirements like taking reasonable salary, maintaining separate accounts, and following corporate formalities. If you claim S-Corp status retroactively for periods when you weren't meeting these requirements, you could lose your liability protection and face problems in an audit. Better to take a few extra steps now to fix this properly than to deal with much bigger headaches later. Find a new accountant who understands the importance of getting this right!

One important thing to consider that I haven't seen mentioned - as a W-2 employee, you get certain legal protections that 1099 contractors don't have. This includes workers' compensation if you're injured on the job, unemployment benefits if they let you go, and protection under labor laws. As a 1099, you're essentially running your own business, which means you need to handle your own liability insurance and you won't qualify for unemployment if the relationship ends. This is a big consideration beyond just the tax implications.

Great question! I went through this exact decision last year when I started doing real estate work. Here's what I learned: The math really depends on your total business expenses. As a 1099, yes you'll pay the full 15.3% self-employment tax, but you can deduct SO much more - mileage (huge for real estate!), home office, phone, internet, marketing materials, continuing education, even meals with clients. One thing that helped me decide: I calculated my expected annual income and business expenses, then ran the numbers both ways. For me, the deductions saved more than the extra 7.65% in self-employment tax cost me. But also consider the non-tax factors - as others mentioned, you lose unemployment protection and workers comp as a 1099. However, you gain flexibility in how you work and when you work, which is valuable in real estate where you might need to show properties at odd hours. My advice: start tracking ALL your potential business expenses now (even before you decide) for a month or two. That will give you real numbers to work with instead of guessing. If your monthly business expenses are significant, 1099 is probably better. If they're minimal, W-2 might be the safer choice. Either way, definitely consult with a tax professional who understands real estate before making the switch!

Just to add my 2 cents - I think the Treasury EIN is actually 72-0000000 for interest payments, not 94-1111111. I had this same issue last year and that's what I used for the payer ID.

I went through this exact same situation two years ago and can confirm the information Lucas provided is correct. For IRS refund interest 1099-INT forms, you should use: - Payer: United States Treasury - EIN: 94-1111111 - Address: You can use either the Ogden, UT or Kansas City, MO service center address I actually called the IRS when I lost mine and after waiting on hold for 2+ hours, the agent confirmed these are the standard payer details they use. She also mentioned that as long as you report the correct interest amount and use the proper Treasury EIN, your return will process normally since they have the matching records on their end. One tip - make sure to keep a digital copy or photo of important tax docs like this in the future! I now scan everything to cloud storage right when it arrives. Good luck with your filing!

I had my verification appointment on February 12, 2024, and my refund was deposited on March 8, 2024 - exactly 25 days later. My transcript updated on March 1 showing the release of the verification hold. I brought my driver's license, passport, social security card, W-2, last year's tax return, and a utility bill. The agent said I was overprepared but that it made the process smoother. Check your transcript on April 15 and April 22 - those should be key update dates based on your Monday appointment timing.

The timeline really varies, but here's what I've learned from going through this process twice. After my verification appointment, it took about 3 weeks for my transcript to update with code 971/571 showing the identity hold was released. Then another 2 weeks for the actual refund to hit my account - so 5 weeks total. Key things that helped speed mine up: - Brought original documents (not copies) - Had my AGI from last year memorized - Asked the agent to notate my file that verification was successful The 9-week timeframe is their maximum, but most people I know got theirs between 3-6 weeks. Keep checking your transcript on Wednesdays - that's when most updates happen. And don't stress if WMR still shows "processing" - it's notoriously slow to update after verification appointments. Good luck with your appointment Monday! The plumbing gods will hopefully smile upon your refund timing 🔧