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Something else to consider - since you had a net capital loss, amending your return will likely result in a LARGER refund (or less tax owed). The IRS allows you to deduct up to $3,000 of capital losses against your regular income. You might actually come out ahead after filing the amendment! Just make sure you use Schedule D along with your 1040-X to report the capital transactions.
Can you still claim the capital loss deduction if it was from wash sales though? I thought those were disallowed?
Good question about wash sales. The wash sale rule disallows the loss specifically on transactions where you buy back the same or substantially identical security within 30 days before or after selling at a loss. However, that disallowed loss gets added to the cost basis of your replacement shares. Looking at the original post, they still had a net capital loss of $870 AFTER accounting for wash sales. The wash sale amount ($27,125) was already factored into their calculations. So they can still claim that $870 loss against their income. If they hadn't repurchased those shares, their loss would have been much larger!
Has anyone actually gotten a CP2000 notice from the IRS for not reporting a 1099-B that showed a loss? I'm wondering how urgent this amendment really is.
Yes! I ignored a 1099-B with losses last year thinking "why bother if I'm not owing more?" Got a CP2000 about 4 months later. The IRS computer only sees "unreported income" from the proceeds, not the net result. Had to respond with a complete Schedule D showing the loss calculation. Major headache that could have been avoided by just amending right away.
I've been playing the "perfect return" game for years! My best year was getting to $3 refund. For accelerated depreciation, make sure you're keeping good records. I got audited two years ago and they specifically looked at my bonus depreciation claims. Had all my documentation and passed with no changes, but it was stressful!
You're playing on expert mode lol! I'm happy if I can just avoid owing a penalty. Quick tip though - I learned that if you owe less than $1,000 at tax time, there's no underpayment penalty. So aiming for a small amount due (like $500) is actually optimal from a cash flow perspective. You get use of your money all year AND avoid penalties.
Don't forget there's a special rule for "self-rentals" too! If you own a business AND rent property to that same business, different rules apply for QBI purposes. That rental income typically qualifies for QBI regardless of whether it meets the trade/business standard, as long as there's common ownership. Also, if your income is under the threshold ($170,050 for singles or $340,100 for married filing jointly for 2025), you don't have to worry about whether your rental is a specified service business or not.
Ooh, that's interesting about self-rentals. What about if I own a single-member LLC that owns both my business and a building, and the business operates in that building? Would that qualify as self-rental for QBI purposes?
For self-rentals and QBI, the key is having common ownership between the rental activity and the operating business, not necessarily the exact same entity. If your single-member LLC owns both the business operations and the building, it's actually simpler - it's all within one entity so there's no "rental" happening for tax purposes. The self-rental rule typically applies when you have separate entities or activities - like if you personally owned the building and rented it to your LLC business. In that case, the rental income would generally qualify for QBI regardless of whether the rental itself meets the trade or business standard.
Question for anyone who knows - does a triple net lease (NNN) where the tenant pays all expenses and I basically just collect a check each month automatically disqualify me from QBI? I have two commercial properties with NNN leases and trying to figure out if I should even bother trying to claim QBI on them.
Triple net leases are specifically mentioned in IRS guidance as potentially problematic for QBI. In Rev. Proc. 2019-38, they explicitly excluded triple net leases from the safe harbor. But that doesn't automatically disqualify you from claiming QBI - it just means you can't use the safe harbor provision.
Thanks for clarifying that! So I'd need to prove my triple net lease activities constitute a trade/business outside of the safe harbor? Sounds like an uphill battle given how passive those arrangements are by design. I might need to talk to my accountant about this one.
just wondering if anyone knows if we non-residents with SSNs have different filing deadlines? or is it still april 15 like everyone else?
One important thing to remember is that as a non-resident with 1099-NEC income, you might be subject to different self-employment tax rules depending on whether your country has a totalization agreement with the US. This can significantly impact how much you owe, so make sure whatever software you use addresses this!
I had no idea about totalization agreements! I'm from Brazil - do you know if that would apply to me?
Brazil currently doesn't have a totalization agreement with the US, so you would generally be subject to US self-employment taxes (Social Security and Medicare) on your 1099-NEC income. This is in addition to income tax. This is actually one of the trickier parts of filing as a non-resident with self-employment income, and why using specialized software can be worth the cost. The self-employment tax is roughly 15.3% on top of regular income tax, so it's a significant amount! Make sure whatever filing method you choose correctly calculates this for your 1099-NEC income.
Dyllan Nantx
7 Quick tip from someone who's been filing with 1099 income for years: track EVERYTHING. Mileage to meet clients, internet bills, office supplies, software subscriptions, professional development courses, etc. I use a separate credit card for all business expenses to make it easier at tax time. And don't forget about quarterly estimated tax payments! The IRS expects you to pay taxes throughout the year when you're self-employed, not just at filing time. I learned this the hard way my first year and got hit with penalties.
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Dyllan Nantx
ā¢16 Do you have a recommendation for tracking mileage? I sometimes drive to client sites and I'm terrible at remembering to log it.
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Dyllan Nantx
ā¢7 I use MileIQ for tracking mileage - it runs in the background on your phone and automatically detects drives. You just swipe left for personal trips and right for business trips. Super easy and creates IRS-compliant records. For quarterly taxes, I set aside 30% of every payment I receive into a separate savings account. That usually covers both federal and state taxes, plus the self-employment tax. Then I make payments online through the IRS Direct Pay system every quarter.
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Dyllan Nantx
2 One important thing nobody's mentioned yet - if you're making decent money on your 1099 work, consider setting up a Solo 401(k) or SEP IRA. You can contribute WAY more than regular employees can to a standard 401(k), which can significantly reduce your taxable income. I put about 20% of my 1099 income into my Solo 401(k) last year and it saved me thousands in taxes while building my retirement. You can open one at most major brokerages like Fidelity or Vanguard pretty easily.
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Dyllan Nantx
ā¢11 This is great advice! Does the Solo 401k have the same contribution limits as a regular 401k? And can I still contribute to my Roth IRA too?
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