Did you have to get any special form from your doctors or hospitals for the expenses, or just your regular receipts? My hospital bills don't specifically say "qualified medical expense" on them.

Do all employers separate these out clearly on the W-2? Mine just has a total number in Box 1 but doesn't break down what's non-taxable anywhere I can see.

Not all employers itemize the non-taxable benefits on the W-2 itself. Many just show the final taxable amount in Box 1 without the detailed breakdown. If your W-2 doesn't show the itemized non-taxable items, you can usually find this information on your final paystub of the year or in your benefits portal. Some employers also provide a separate benefits statement that shows the total value of your compensation package including both taxable and non-taxable components. If you can't find this information, your HR or payroll department should be able to provide a breakdown of what's included in your total compensation versus what appears in Box 1 of your W-2.

That could be pre-tax deductions that aren't itemized separately. Things like FSA contributions, certain work expenses, or union dues sometimes cause small discrepancies. I had a similar issue and found out it was my parking pass being deducted pre-tax but not listed separately.

Thanks for the explanation! That makes sense - I do have a dependent care FSA that's probably causing the difference. Completely forgot about that deduction since it comes out automatically. At least I know nothing's wrong with my W-2 now.

That's an interesting suggestion! Would forming an LLC change anything about how I file taxes or would I still use Schedule C? And would there be any benefits for someone making such a small amount ($3k-ish per year) from this work?

You would still use Schedule C with a single-member LLC unless you elect to be taxed as an S-Corporation or C-Corporation. The LLC doesn't change your tax filing method by default - it's considered a "disregarded entity" for tax purposes when it has just one member. For someone making only around $3,000 annually from this work, an LLC probably isn't worth the administrative costs and annual fees unless you have significant liability concerns. The main benefit of an LLC is limiting your personal liability, but for patient advocacy work with minimal income, the protection may not justify the expenses. Some states have annual LLC fees of $800+ (California), while others are much cheaper ($50-100).

I use TurboTax Self-Employed and it works great for this. It asks if you have self-employment income and then automatically puts you on Schedule C. It doesn't really distinguish between "independent contractor" and "sole proprietor" either - it just asks about your business income and expenses. The software walks you through all the deductions you might qualify for too.

But don't you have to pay quarterly estimated taxes if you're anticipating a tax bill? So you couldn't really wait a full year to make that payment, right?

You're right that you might need to make quarterly estimated payments - it depends on your total expected tax liability and other withholdings. If you have sufficient withholding from other sources (W-2 job, etc.), you might not need to make estimated payments. Even with quarterly payments though, you still have the benefit of having the money available to you for some period of time versus having it immediately applied to next year's taxes. You could potentially use it for higher priority needs before making those estimated payments when they're actually due.

I don't think most states pay interest unless they're really late with the refund processing though. Did you have to wait an unusually long time?

Yes! Create an account on irs.gov and access your "Tax Records". There's a section called "Wage & Income Transcript" that shows all income reported to the IRS under your SSN including W-2s, 1099s, etc. If your unemployment 1099-G is showing up there, then yes, the IRS knows about it. That's also why they'll eventually catch the discrepancy - they have the info but will take time to match it against what you reported. Way better to fix it yourself before they send a notice.

Thanks for this info! I just checked my transcript and yep, there it is - my 1099-G from unemployment is definitely showing up. Guess I better get that amendment filed asap before they come after me.

Yeah but waiting for them to catch it means you'll definitely pay interest on what you owe. The interest starts accruing from the original due date. If you amend now you still pay interest but for a shorter time period = less money.