Thanks for suggesting that! I hadn't thought to look at the Census Bureau site. Did you end up using the same code on your Schedule C as the NAICS code you found? Did you have any issues with matching it to the IRS list?

Yes, I used the same code I found through the NAICS search for my Schedule C. The IRS business codes are actually based on the NAICS system, though sometimes they're slightly condensed. I did have to cross-reference what I found with the IRS list in the Schedule C instructions, but it was pretty straightforward. For my conservation work, I found code 711510 (Independent artists, writers & performers) through NAICS, and it matched perfectly with the Schedule C list. Just make sure you're looking at the most current list since they update them periodically.

But I thought 712110 was only if you're operating a museum? Can you use that if you're just working for one as a contractor? I've been using 541900 (Other professional services) for my museum consulting work and now I'm worried I've been doing it wrong.

Did you file electronically or paper forms for the corrections? I'm wondering which method is better for ensuring they connect the corrected forms to the originals.

I filed the corrections electronically through the same service I used for the originals (in my case, Tax1099). Electronic filing is generally better because it processes faster and has fewer chances for manual errors. The system is designed to connect the corrected 1099-MISC forms to the originals automatically through the TIN (tax ID) matching and the "corrected" checkbox. For the new 1099-NEC forms, make sure you're using the same payer and recipient information exactly as it appeared on your incorrect 1099-MISC forms to help their systems match everything up correctly. Consistency in how names and TINs are formatted between all forms is crucial.

Yes! I received a penalty notice for a similar situation and successfully got it waived. Write a penalty abatement letter citing "reasonable cause" and explaining the confusion with the new form requirements. Include timeline details showing you acted in good faith and corrected promptly once you discovered the error. Reference IRS's First Time Abatement policy if this is your first penalty. In my case, they waived 100% of the penalties after review. Don't pay until you've gone through the abatement process - it works more often than people realize, especially for this specific 1099-NEC transition issue.

Thanks for breaking this down! So how do I figure out exactly how much of my scholarships went to qualified expenses vs. living expenses? My 1098-T shows I received $18,500 in scholarships/grants, but tuition and fees were only $12,700. Does that mean I should have reported $5,800 as income?

Yes, based on those numbers, you should have reported $5,800 as taxable income. The calculation is pretty straightforward: total scholarships/grants ($18,500) minus qualified educational expenses ($12,700) equals taxable portion ($5,800). If you also purchased required books and supplies for your courses, keep those receipts as they can reduce your taxable amount. But things like laptop purchases, general school supplies, and dorm furnishings don't count as qualified expenses unless specifically required for a course.

The 1098-T can actually be misleading too! Box 1 only shows tuition and fees paid, not books and required supplies, which are also qualified expenses. So keep those receipts!

That's an excellent point! The 1098-T doesn't tell the whole story, and you're absolutely right that required books and supplies count as qualified expenses even though they don't show up in Box 1. This is why it's so important for students to keep detailed records of all their education-related expenses. Even things like lab fees or art supplies that are required for specific courses can count as qualified expenses that reduce the taxable portion of scholarships.

That's actually super helpful to know! I definitely had taxes taken out of each check. Do you know if I need to file state taxes too? I'm in Illinois if that matters.

Yes, you should file state taxes for Illinois as well. Illinois has a flat income tax rate (currently 4.95%), and similar to federal taxes, if you had state taxes withheld from your paychecks, you'll likely get that money back if your income was only $3,200 for the year. The good news is that most tax software will let you file both federal and state returns, and will walk you through the process for both. Many of them offer free filing for simple tax situations like yours.

This is actually not correct information. The wage and income transcript for 2024 is generally available by May-June of 2025. So it would be available before the October extension deadline if the OP needs to file an extension.

Did you have to pay for the therapist letter? I'm in a similar situation but can't afford therapy right now.

I didn't have to pay specifically for the letter. My therapist wrote it as part of my ongoing treatment. If you can't afford therapy, see if your school has counseling services - they're usually free or very low cost for students. School counselors can often provide similar documentation. Many schools also have legal aid services for students that can help you draft affidavits or formal statements about your situation. Church leaders, high school teachers who know your situation, or even employers who are familiar with your family circumstances can sometimes provide supporting letters too.

I tried that route last year. You can submit the FAFSA that way, but you'll only be eligible for unsubsidized loans unless you get the dependency override approved. Your school's financial aid office will require additional documentation to consider you for grants or subsidized loans.