


Ask the community...
Something that hasn't been mentioned yet - if you're self-employed or a business owner, these rules apply differently than if you're an employee trying to deduct unreimbursed expenses. For self-employed people, these business travel deductions go on your Schedule C. If you're an employee, the Tax Cuts and Jobs Act eliminated miscellaneous itemized deductions for unreimbursed employee expenses for tax years 2018-2025, so you might not be able to deduct these expenses at all on your federal return (though some states still allow them). Are you self-employed or an employee? That makes a huge difference here.
I'm self-employed, running my own consulting business. The conference is directly related to my field and I'm presenting at one of the sessions. Does that strengthen my case for the airfare deduction even with the extended vacation time?
That definitely strengthens your case! The fact that you're presenting at the conference creates an even clearer business purpose for the trip. The IRS would have a hard time arguing that your primary purpose wasn't business when you're actually a presenter. Since you're self-employed, you'll report these deductions on your Schedule C, which is much more straightforward than the old unreimbursed employee expense deductions. Just make sure to maintain documentation of your presentation, the conference agenda showing your name, and all receipts for the business portion. The extended vacation doesn't affect your airfare deduction as long as the primary purpose was clearly business, which in your case is very well established by being a presenter.
Don't forget about the 50% limitation on meals during the business portion of your trip! Even during the conference days, your meals are only 50% deductible (unless it's 2021/2022 when temporary 100% deductibility for business meals was allowed). Also, if you're taking this trip internationally, there are some additional special rules that might apply depending on the country. Generally the same primary purpose test applies, but there can be allocation requirements for certain countries.
I thought the rules were different for meals included as part of a conference registration fee? Aren't those fully deductible rather than subject to the 50% limit?
Have you considered checking if Fidelity offers their own tax help? I've used Vanguard in the past, and they had dedicated support for helping clients understand their tax forms. Might be worth calling Fidelity directly before paying someone else.
That's a great idea I hadn't thought of! Have you actually gotten detailed help from them before on how to report specific transactions? I'll definitely give them a call tomorrow if that's the case.
I've gotten basic guidance from them before, but it can be hit or miss depending on who you talk to. Their customer service can usually help clarify what specific codes or entries on your form mean. What they typically won't do is give specific tax advice about how to report things on your return - they'll explain their form but stop short of telling you exactly what to enter on your tax forms. Still worth calling though, as they can often clear up confusion about what certain transactions or adjustments on their statements represent.
Has anyone tried just asking on Reddit? r/tax has some really knowledgeable people who answer questions for free. I've gotten good advice there for some complicated tax situations.
The IRS almost certainly has a copy of your 1099-NEC since the employer would have submitted it. In most cases with small amounts like this, they might just send you a letter with the adjusted amount you owe plus interest. I had this happen with a forgotten $1200 1099-NEC from 2019. They just sent me a notice, I paid the extra tax (was like $150 plus some interest), and that was it. No audit, no major penalties.
Thanks for sharing your experience! That makes me feel better about the situation. Do you remember how long it took for them to send you the letter after you filed your original return?
I think it took about 14 months after I filed my original return. The IRS has been super backlogged the last few years, so it takes them longer to match up 1099s with tax returns. If you're worried, filing an amended return is definitely the safest option. But in my case, the adjustment they made was accurate and the process was pretty painless overall.
The real question is if the place that paid you $800 actually filed a 1099-NEC with the IRS. If they didn't, the IRS won't know about it. Some smaller places aren't great about their paperwork obligations.
10 Don't forget about quarterly estimated tax payments if you go the sole proprietorship route! I made that mistake my first year as a 1099 contractor and got hit with nasty underpayment penalties. You'll need to make payments on April 15, June 15, September 15, and January 15 (for the previous year).
15 How do you calculate how much to pay for estimated taxes? Is there some formula or percentage I should be setting aside from each payment I receive?
10 The safe harbor method is to pay either 90% of your current year's tax liability or 100% of last year's tax liability (110% if your income is above $150,000), whichever is lower. For a quick practical approach, I set aside about 30% of all my 1099 income - roughly 15% for self-employment tax and 15% for income tax. This has worked well for me, but your tax bracket might differ. The IRS has Form 1040-ES with a worksheet to calculate more precisely, or you can use tax software that offers quarterly tax calculators.
17 Just a heads up about Washington state - while we don't have state income tax (yay!), if your business grosses over $12,000 annually, you'll need to register with the Department of Revenue and pay Business & Occupation (B&O) tax. The rate is pretty low for service businesses though - around 1.5% of gross revenue.
4 Does that apply even if you're just a freelancer/contractor working for one company? I thought B&O tax was just for actual businesses with multiple clients.
Natasha Volkova
Speaking from personal experience, file ASAP and make sure to include a brief explanation letter. I forgot to file my 2019 taxes (just completely spaced it during pandemic) and when I finally realized, I filed immediately with a short letter explaining the oversight. I did owe some penalties but not as much as I feared. The key is to file before they send you a notice, which looks like you haven't reached that point yet.
0 coins
Zainab Ismail
โขThank you so much for sharing your experience. Do I need to do anything special with the letter? Like attach it in a certain way or reference anything specific? I've never had to write to the IRS before and I want to make sure I do it right.
0 coins
Natasha Volkova
โขJust write a simple one-page letter titled "Statement of Reasonable Cause" explaining that you inadvertently missed filing the return due to life circumstances (be specific but brief about the job change and move). Include your names, Social Security numbers, tax year, and sign it. Attach it to the front of your return if filing by mail. If filing electronically, mail the letter separately to the same IRS processing center where you would have mailed your return, and reference your names, SSNs, and tax year 2022 in the letter.
0 coins
Javier Torres
What tax software are u using? I forgot to file 2020 taxes and TurboTax charged me extra for "prior year returns" which was annoying af. Ended up switching to FreeTaxUSA for my late filing which was way cheaper for past years.
0 coins
Emma Davis
โขI second FreeTaxUSA for prior year returns. TurboTax wanted $140 for my 2021 return when I filed it late, but FreeTaxUSA was like $15. Same forms, way less money.
0 coins