Thanks everyone for clarifying this! I had no idea about the special attorney reporting rules. I'm definitely going to need to issue that 1099-NEC for my $500 payment then. Quick follow-up question - since I didn't get a W-9 from the attorney upfront (rookie mistake), should I reach out to them now to request it? Or is there a specific deadline I need to meet for getting their tax ID info? I want to make sure I handle this properly and don't miss any important filing deadlines. Also, does anyone know if law firms vs. individual attorneys have different reporting requirements, or is it the same rule regardless?

This thread has been incredibly helpful! I'm a small business owner and had been completely unaware of the special reporting rules for attorney payments. I paid my business lawyer $475 last year for contract review and was planning to skip the 1099-NEC since it was under $600. I'm glad I stumbled across this discussion before filing season gets into full swing. It's frustrating that the rules are different for attorneys compared to other service providers - seems like something that should be more widely known or clearly communicated by the IRS. Does anyone know if there are other professions that have similar special reporting rules with no minimum threshold? I want to make sure I'm not missing any other payments that need 1099s regardless of amount.

For finding a CPA who specializes in trading-related tax issues, I'd recommend looking for someone who specifically mentions investment taxation or securities trading on their website or LinkedIn profile. The AICPA (American Institute of CPAs) has a directory where you can search by specialty. You can also ask potential CPAs directly about their experience with amended returns for unreported trading activity - any good tax professional should be comfortable discussing their experience with this type of situation since it's become quite common. Another option is to check with local investment clubs or trading groups in your area - they often have recommendations for tax professionals who understand the nuances of active trading. Some CPAs even specialize specifically in day traders and active investors. When you do meet with someone, bring all your Robinhood statements and be upfront about the situation. A good CPA will walk you through the process, explain your options for penalty abatement, and help you set up better record-keeping systems for the future. The peace of mind is definitely worth the cost, especially when you're dealing with multiple years of amendments.

One more thing to consider - make sure you understand the difference between wash sale rules and regular trading losses before you file those amended returns. If you sold a stock at a loss and then bought the same stock (or a substantially identical security) within 30 days before or after the sale, the IRS considers it a wash sale and you can't deduct the loss immediately. This is especially important for active traders who might buy and sell the same stocks multiple times. Robinhood's 1099 should identify wash sales, but it's worth understanding the rules so you don't make the same mistakes going forward. The wash sale rule is designed to prevent people from artificially creating tax losses while maintaining their investment position. Any disallowed losses get added to the cost basis of the replacement shares, so you don't lose the tax benefit permanently - it just gets deferred until you actually exit the position. Since you mentioned you've been actively trading the same types of stocks over multiple years, this could definitely impact your amended returns. Just another reason why working with a tax professional who understands these rules might be worth the investment.

Has anyone here used a CPA for their first year filing jointly? Worth the money or overkill? My wife and I are debating whether to DIY or hire someone for our 2024 taxes.

Welcome to married filing! As someone who went through this transition a few years ago, I can add a couple practical tips to the great advice already shared: Since you got married in December, make sure you update your emergency contact and beneficiary information at work too - not just your W-4s. Also, consider opening a joint savings account specifically for tax purposes if you don't have one already. We found it helpful to have both our tax refunds/payments go to the same account so we could track our joint tax situation more easily. One thing about the mortgage interest deduction - don't forget you can also deduct property taxes paid in 2024, even if they were escrowed. Since you bought in August, you probably have 4-5 months worth. Combined with your mortgage interest, you might be closer to making itemizing worthwhile than you think. The IRS also has a really helpful online tool called the "Interactive Tax Assistant" that can walk you through scenarios specific to newly married couples. It's free and gives you personalized guidance based on your exact situation.

This thread has been incredibly educational! I'm new to self-employment and was completely lost on SEP IRA calculations. What really helped me understand was seeing the consistent message across all the different approaches people tried - whether through tax software, calling the IRS, or using specialized tools, everyone confirmed the same basic formula. For anyone else just starting out like me, here's what I took away: Start with your Schedule C net profit, subtract half of your self-employment tax (the "employer portion"), then calculate approximately 20% of that adjusted amount. That's your maximum SEP IRA contribution limit. The explanation about why we subtract half the SE tax (to make us equivalent to W-2 employees) was the lightbulb moment for me. It's not just an arbitrary rule - there's actual logic behind it. I feel much more confident about handling my retirement contributions now, and I know exactly where to look for help if I get stuck again. Thanks everyone for sharing your real experiences and walking through the calculations with actual numbers!

As someone who just went through this exact same confusion last month, I can confirm what everyone here is saying is correct! I was getting completely different numbers depending on which online calculator I used, and it was driving me crazy. What finally helped me was finding the actual IRS Publication 560 that someone mentioned earlier. There's a worksheet on page 18 that walks through the calculation step by step. It's basically: Schedule C net profit → subtract half of SE tax → multiply by roughly 20% (or more precisely, divide by 1.25 then multiply by 0.25). For my $75,000 Schedule C profit, I subtracted about $5,300 (half SE tax) to get $69,700, then calculated 20% of that for a max contribution of about $13,940. The key insight for me was realizing this isn't just some random tax rule - it's designed to put us self-employed folks on equal footing with employees who have employer 401k contributions. Once I understood the reasoning, the calculation made so much more sense. Thanks to everyone who shared their real numbers and experiences - it really helps to see concrete examples rather than just theoretical explanations!

This has been such an educational thread! I'm new to collecting but have been building a vintage watch collection over the past few years. Reading through all these responses has really opened my eyes to the tax implications I hadn't fully considered. One question that comes to mind - for those of us who are active collectors (buying and selling regularly rather than just holding long-term), is there a point where the IRS might consider this a business activity rather than investment/hobby activity? I've been flipping some watches to fund purchases of higher-end pieces, and I'm wondering if that changes the tax treatment from the collectibles capital gains rules we've been discussing to regular business income. Also, @Emily Parker mentioned that short-term capital gains (less than a year) don't get the 28% cap protection - they're taxed as ordinary income at your full marginal rate. For someone in a higher tax bracket, that could mean paying 32% or even 37% on short-term collectible gains, which is significantly higher than the 28% cap on long-term gains. That's a really important distinction for timing sales! Thanks to everyone who mentioned the various tools and resources - I'm definitely going to look into some of the tax calculation tools and record-keeping strategies mentioned here before I make any major sales decisions.

As someone who's been collecting vintage guitars for over a decade, I wanted to add a perspective on the record-keeping challenges that several people have mentioned. The documentation issue becomes even more complex when you factor in restoration and maintenance costs over many years of ownership. For instruments (and I imagine this applies to other collectibles too), you can potentially add certain improvement costs to your basis - things like professional restoration, new cases, humidity control systems, or even storage facility costs. But you need to distinguish between "improvements" that add value versus regular "maintenance" that just preserves existing value. I learned this the hard way when I sold a 1965 Fender Stratocaster. I had receipts for about $3,000 in professional restoration work over 8 years of ownership, but my accountant told me that some of those costs (like basic setup and cleaning) were maintenance, while others (like refinishing and electronics upgrades) could be added to basis. The distinction saved me several hundred dollars in taxes. Also want to echo what others have said about the business vs. hobby determination - it's really important to be mindful of this if you're actively trading. I deliberately limit myself to selling no more than 2-3 guitars per year to stay clearly in "investment" territory rather than risk being classified as a dealer. The 28% cap has definitely influenced my selling strategy. I try to time major sales for years when my regular income puts me in lower brackets, since every dollar of regular income affects how much of the collectible gain gets taxed at the full 28%.