Would this be the same for a situation where the insurance company sent a check for property damage rather than lost rent? I received a check for roof damage but it was made out to both me and my mortgage company.

No, that's actually quite different. Insurance payments for property damage (like your roof) are generally not taxable income - they're considered reimbursement for capital expenses. However, if the insurance payment exceeds your basis in the damaged property component, you might have to recognize gain. The situation gets more complex when the check includes your mortgage company. Typically, mortgage companies are included on insurance checks for significant property damage to ensure the repairs are actually completed. This doesn't change the tax treatment - it's still not income - but you'll need to work with your mortgage company to get the funds released for the actual repairs.

Wait so if the 1099-NEC is for lost rental income is it considered passive income? I thought anything on a 1099-NEC is automatically considered self-employment income subject to SE tax?

That's a really common misconception! The 1099-NEC form itself doesn't determine whether income is subject to self-employment tax - the nature of the income does. In this case, despite being on a 1099-NEC, the payment is essentially replacement rental income, which is generally considered passive income reported on Schedule E and not subject to self-employment tax. The insurance company probably issued a 1099-NEC because they didn't have a more appropriate form for this type of payment, but that doesn't change its fundamental nature as replacement for rental income. When you report it on Schedule E along with your other rental activities, you're correctly characterizing it based on what it actually represents rather than just the form it came on.

Did you ever report them to anyone? I had issues with Fidelity last year where they sent corrected 1099s THREE times, each after I had already filed. Super frustrating and caused me to have to amend my return multiple times.

I didn't formally report them, but I did speak with a manager and documented everything. The conversation got escalated pretty quickly when I mentioned FINRA regulations and compliance requirements. For corrected 1099s, that's unfortunately common with any brokerage firm. They often issue corrections when they receive updated information from underlying investments, especially with complex mutual funds. It's annoying but not necessarily negligent like completely missing forms.

Thanks for the advice! I didn't know about requesting a "tax document summary" - is that something all financial institutions provide? And yes, I'm definitely going to file a complaint with FINRA. I'm worried about other people who might not realize they're missing documents and end up with IRS problems later.

Thanks for bringing this up! I actually wasn't sure about Form 8833. Does everyone claiming treaty benefits need to file this form? The treaty amount isn't huge (around $6,500 total income with $1,950 withheld), so I wasn't sure if there's some minimum threshold.

Technically, not everyone needs to file Form 8833. There are exceptions based on the type of income and amount. Generally, if your treaty-based position is already disclosed on a W-8BEN form you submitted to the payer (which would normally be the case for standard treaty reductions on things like royalties, dividends, etc.), you might be exempt from filing Form 8833. However, there are specific situations that always require Form 8833 regardless of amount, such as certain business profits claims or if you're taking a position that's contrary to a U.S. regulation. In your case with $6,500 income and standard treaty withholding reduction, you might be exempt, but most tax professionals recommend filing it anyway to be safe. The penalties for not filing when required can be quite steep ($1,000 per position), so the safe approach is to include it.

This is actually incorrect information. The June 15th deadline is for US citizens and resident aliens living abroad, not for nonresident aliens. The 1040-NR is generally due on April 15th for most filers (or the next business day if it falls on a weekend or holiday).

You're right, I mixed up the rules. Thanks for the correction! Nonresident aliens filing Form 1040-NR generally need to file by April 15th (or the next business day if it falls on a weekend or holiday) for the previous tax year. The June 15th deadline applies to U.S. citizens and resident aliens who live and work outside the U.S. and Puerto Rico. The important point still stands though - even if you missed the deadline, you can still file and claim a refund for up to 3 years from the original due date of the return.

Curious - how much more does a CPA typically charge compared to H&R Block?

It varies a lot based on complexity. When I just had W-2 income, my CPA charged about $350 compared to roughly $200 at H&R Block. Now with rental property and some business income, I pay about $750. The difference has been worth it though - my CPA found nearly $3,000 in deductions H&R Block missed the year before I switched. CPAs generally have more education and expertise, especially with complex situations. If your taxes are super simple, the price difference might not be justified, but with any complexity, a good CPA usually pays for themselves.

Thanks for sharing! How did you find your CPA? I'm nervous about just picking someone random.

Wait so if I'm only doing local deliveries (never more than 30 miles from home), does that mean my lunch is never deductible? That doesn't seem right since I'm still working as an IC during that time.

You can still potentially deduct meals for local deliveries, but they fall under the regular business meal rules rather than the "away from home" travel meal rules. The key for local meal deductions is establishing that the meal had a business purpose beyond just eating because you were hungry. For example, if you're grabbing a quick meal between deliveries to maintain your delivery schedule, that could qualify as a necessary business expense. But if you're just taking a normal lunch break like any employee would, the IRS might consider that a personal expense. Document the business purpose for each meal and keep good records of your delivery schedule to show the connection.

Yep, I use TurboTax Self-Employed. When you get to the business expenses section, there's a specific category for "Meals" where you can enter the total amount. It automatically applies the 50% limitation. Make sure you're filing Schedule C (Profit or Loss from Business) as part of your return.