This is solid advice! My employer uses UltiPro and I was able to log in and download my W2 even though I left the company in November. Totally forgot I had that access.

That's great to hear it worked for you! Many people don't realize these payroll portals often maintain your access for a period of time after employment ends, specifically for tax document purposes. If anyone else is trying this method, also check your email for any invitations to these portals when you were hired. Sometimes the login credentials or reset instructions are still valid. Even if your account appears inactive, customer service for these payroll providers can sometimes help former employees access just their tax documents.

Won't an extension delay my refund though? I'm counting on that money for some bills coming up in March.

That's a great point I hadn't thought about. So should I be submitting some kind of expense report to my own S-corp for reimbursement? Or is it enough to just document everything in my company records?

You should definitely be submitting formal expense reports to your S-corp for reimbursement. This creates the proper documentation that shows you're following an "accountable plan" which is critical for this arrangement to work properly with the IRS. The expense report should include the business purpose, dates of travel, locations, and calculation of the per diem amounts based on the State Department rates. Your S-corp should then reimburse you directly for these expenses. In your company records, these would be logged as business travel expenses, and on your personal taxes, the reimbursements wouldn't be considered income since they're under an accountable plan.

I tried using TurboTax for this last year and it was a nightmare. The software doesn't have clear guidance on foreign per diems. I ended up manually calculating everything and entering it as "other business expenses" with detailed notes. Not ideal but it worked.

Thanks for mentioning this! I had no idea about the self-employment tax being that high. Do I get any credit for the social security/medicare taxes I'm already paying through my W2 job? And for the mileage deduction, does driving to client meetings count?

There's a cap on Social Security tax (not Medicare) - if your W2 job already withholds the max Social Security tax ($9,932 for 2023, which happens at $160,200 of income), then you won't owe additional Social Security tax on your freelance income, just the Medicare portion. Driving to client meetings absolutely counts as deductible business mileage! Keep a log with dates, starting/ending mileage, and purpose of each trip. Commuting to a regular workplace isn't deductible, but since your freelance clients aren't a regular workplace, those trips qualify. You can also deduct trips to buy business supplies, attend work-related conferences, etc.

This is the best advice! I started doing this last year and it's been amazing for keeping things organized. I also set up a separate checking account for all my freelance income. My accountant was super impressed with how clean my books were.

Wait, I thought scholarships used for room and board counted as earned income, not unearned? This is why tax stuff makes my head explode. Can anyone clarify this? I might have filed wrong last year.

That's a common confusion. For general tax purposes, taxable scholarships (amounts used for room, board, etc.) are considered earned income. However, specifically for the Form 8615 "kiddie tax" rules, these same taxable scholarships are counted as unearned income when determining if the child meets the $2,600 threshold. It's frustrating that the same money is classified differently depending on which tax rule you're looking at. For filing requirement purposes, taxable scholarships are earned income, but for kiddie tax purposes, they're unearned income. This dual classification is exactly why so many people get confused about Form 8615.

I used TurboTax for my son's return with almost the exact same situation. The software asked if he was required to file (not if he wanted to file, but if he was required). I answered no, and it correctly didn't include Form 8615. Just make sure you answer the "required to file" question accurately based on the thresholds, not based on whether you're actually filing. TurboTax also correctly included the taxable scholarship as income but didn't trigger the kiddie tax form since he wasn't required to file.

Good point! But how would you document that for the IRS? My brother bought a car in Oregon (no sales tax) but had to pay use tax when he registered it in California.

The receipt or documentation from your state's DMV or revenue department when you paid the use tax serves as your documentation. Usually when you register an out-of-state vehicle, they give you a receipt showing the use tax paid - that's what you'd keep for your records. In your brother's California case, the CA DMV would have provided documentation when he registered the vehicle and paid the use tax. That's what he'd need to keep to substantiate the deduction if he itemizes.

That's not right. The full sales tax is deductible in the year of purchase even if you financed the car. The dealer paid the full tax to the state at the time of purchase, so you get the full deduction.