Do you know if there's any way to "reset" this if you've been doing it wrong? I realized I've been missing my carryover basis for like 3 years now. Can I file amended returns or is it too late?

You can absolutely file amended returns to correct your basis tracking. For IRAs, you generally have 3 years from the original filing deadline to amend returns. So if you just realized this now, you can likely still fix the past 2-3 years. I'd strongly recommend filing Form 8606 amendments for each affected year, starting with the earliest one first, then working forward. Each amended return will affect the next year's starting basis. It's a bit of a pain, but way better than permanently losing your basis and potentially paying taxes twice on the same money down the road.

YES! Do the 8606 manually! I found that most tax software completely messes this up. I use tax software for everything else but fill out the 8606 by hand and then override the software's calculations. It's the only way to make sure your basis is tracked correctly year to year.

Thanks for the advice! That's what I was suspecting. I'll do the 8606 manually this year and make sure I'm tracking my carryover basis correctly. Seems like even the "premium" tax software packages don't handle this situation well. Appreciate the confirmation!

Is that always true though? I thought there were exceptions based on how many days you rent it and personal use days? The whole 14-day rule and all that?

That approach could potentially create even bigger problems. The IRS looks at the substance of transactions, not just the form. If they determine the arrangement is actually a disguised below-market rental, they could disallow your rental expense deductions AND potentially treat the "gifts" as taxable rental income that you failed to report. Additionally, regular monthly gifts that coincide exactly with rent payments would look suspiciously like a tax avoidance scheme. It would be hard to argue these are genuine gifts rather than just a way to circumvent the Fair Market Rent rules. I'd strongly advise against this approach.

Ah, I see. I didn't realize the IRS would look at the whole picture like that. Makes sense though - it would be pretty obvious what was happening if the gifts lined up exactly with rent payments. Thanks for explaining!

What percentage of my phone bill can I reasonably deduct? I use it for personal stuff too obviously.

For your phone bill, you need to determine what percentage is used for business purposes. If you use your phone for DoorDash about 30% of the time, you can deduct 30% of your bill. Be honest but don't shortchange yourself. Some dashers keep track for a typical week to establish a pattern, then apply that percentage to the whole year. The same concept applies to other mixed-use items. Just make sure you can explain how you arrived at your percentage if asked. And always keep your monthly phone bills as documentation - digital copies are fine.

In my experience as a full-time dasher for 3 years, standard mileage is almost always better for delivery drivers. The rate for 2024 is 67 cents per mile which really adds up when you're putting 20k+ miles a year for deliveries. Plus it's way simpler than tracking all your actual expenses and calculating depreciation.

Thanks for mentioning this! I'm in New York - do you know if I need to file anything special with the state here? I definitely have plenty of evidence (emails, company handbook they gave me, etc). Should I be reaching out to the company about this or just handle it on my tax forms?

New York has pretty strong worker protection laws. You'll want to look into filing the IT-2104 form which is NY's equivalent of the W-4 for your state taxes. Also consider filing a report with the NY Department of Labor about the misclassification - they take these cases seriously and can help recover the employer portion of taxes you shouldn't have to pay. Regarding contacting the company, it depends on your relationship with them. Some people have success simply explaining the situation to their former employer and requesting they issue a corrected W-2. Others find this creates conflict. If you need them as a reference, consider how approaching them might affect that relationship. Either way, you can still file correctly on your end using Form 8919 even if they refuse to correct their mistake.

Yes! I got a favorable determination but it took forever (9 months). The key was documenting everything thoroughly in the initial filing. I included copies of emails showing they controlled my schedule, photos of the company equipment I was required to use, their employee handbook they made me follow, etc. The more evidence you provide upfront, the faster and more likely you'll get a favorable ruling.

This! I had Robinhood show completely wrong basis amounts for some options I exercised last year. How do you correct this on your tax forms if the 1099 is wrong?

You need to file Form 8949 and check box C for short-term transactions with incorrect basis. Then you'll list the transaction as reported on your 1099-B, but you'll make an adjustment in column g to correct the basis amount. In the code column, you'll enter "B" which means that the basis was reported incorrectly by the broker. Keep detailed records of your actual trade confirmations showing the correct basis in case you're ever audited. It's definitely more work, but it ensures you're not overpaying taxes because of broker reporting errors. Most tax software has a way to enter these adjustments, though it's not always obvious where to find that section.

Robinhood's tax docs are still a mess. I switched to TDA and it's night and day difference. Their reporting actually makes sense and properly tracks wash sales.