Thanks for mentioning Form 4852 - I hadn't heard of that one! Do you know if I need to wait for the company to refuse to give me a W2 first, or can I just file the 4852 right away? I doubt they're going to be cooperative since they're already ignoring my messages after I told them about the SS8 determination.

You don't necessarily need to wait for them to refuse. If they're already ignoring your communications, that's basically a de facto refusal. You can proceed with Form 4852 right away. On the form, you'll need to explain how you determined the wage amount - just reference your 1099 forms, payment records, and the SS8 determination. The key is documenting that you made a reasonable effort to get the correct W-2 from them. Even a quick email requesting it (with no response) is enough to show you tried.

This is really important! My old company did this - they withheld some taxes but still gave me a 1099. When I got my SS8 determination, I discovered they had withheld taxes but never submitted them to the IRS! It created a huge mess.

Thanks for bringing this up! To clarify, I do have paying gigs throughout the year in the same line of work. This festival opportunity is unusual in that it's "payment in kind" rather than cash, but it's definitely part of my overall business strategy to build contacts and get higher-paying work. I've been profitable overall for the past year, just not with this specific job.

That's good news! The fact that you have other paying gigs in the same line of work and are profitable overall will really help your case if you're ever questioned. Just keep good records showing how this unpaid gig connects to your overall business plan. Maybe even document any contacts you make or future opportunities that come from this festival work to show the business purpose. The IRS is most concerned with people trying to write off hobby expenses or vacations as "business" - since you have a legitimate business that makes money at other times, you should be on solid ground.

The IRS mileage rate for 2023 is actually 67.5 cents per mile for the second half of the year (July 1-Dec 31). It was 65.5 cents for the first half. Just wanted to clarify so OP doesn't miss out on deductions!

How do you figure out how much to pay each quarter? Is there a calculator or something?

You can use the worksheet in Form 1040-ES to estimate your payments. Basically, you'll need to estimate your total tax liability for the year and divide by 4. If your income is fairly consistent each quarter, equal payments work fine. If it varies a lot, you can use the "annualized income" method (Form 2210) to vary your payments.

Exactly! The LLC question is completely separate from tax deductions. An LLC can elect different tax treatments, but having/not having one doesn't affect your ability to deduct business expenses.

I hadn't even thought about state tax implications! I'm in Michigan - do you know if there are specific homeowner benefits here? Also, does using the standard deduction on federal mean I have to do the same on state?

Michigan has a Homestead Property Tax Credit that's separate from your federal return. You may qualify for this even if you take the standard deduction on your federal return. It's based on your property taxes in relation to your household income, and can provide significant savings. No, you don't have to use the same deduction method for state as federal. You can itemize on one and take the standard deduction on the other - choose whatever gives you the best outcome for each return separately. The Michigan form MI-1040CR is what you'll need for the homestead credit.

Also check if you paid points to get your mortgage! Those are usually deductible in the year you pay them. They should be on your closing documents.

I've thought about going to a professional, but I was hoping to avoid the expense since my return is otherwise pretty straightforward. Do you think the cost is justified just for handling the large number of forms? How did you find a CPA that specializes in high-volume trading?

In my experience, it's absolutely worth it when you have hundreds of transactions. Besides handling the volume, a good CPA can often find deductions or strategies you might miss. I found mine by asking in a traders' forum for recommendations in my area. The real value comes when you have an unusual situation like this. Consumer software is designed for typical tax situations, not edge cases like hundreds of transactions. Most CPAs charge based on complexity, so while the trading forms increase the cost, the rest of your straightforward return helps keep it reasonable.

I did this with H&R Block Premium last year. You need to format your spreadsheet exactly to their template, but once that's done, it imports everything cleanly. I had around 175 transactions and it worked without crashing. Way better than manual entry.