Thanks for pointing this out. I actually used 3 different platforms throughout the year. Do they all automatically send tax forms or do I need to request the statements?

Most platforms don't automatically send you win/loss statements - you need to request them specifically. They'll only automatically send W-2G forms for individual wins over $1,200. Each gambling site usually has a section in your account settings or help center that explains how to request your annual win/loss statement. Some platforms make these readily available to download from your account, while others require you to contact customer support. I recommend requesting these statements as soon as possible since it can sometimes take them a while to generate the documents, especially during tax season when everyone is asking for them.

This is a really good point. I made this mistake one year and actually ended up paying more in taxes by itemizing than I would have with the standard deduction.

She signed last week, unfortunately. The settlement does break down some amounts but it's pretty general - just "compensation for vehicle" and "additional damages." I'll let her know to get it reviewed by a tax pro before filing next year. Thanks for this info!

I haven't personally, but a client of mine did. The IRS was primarily concerned with verification of the original purchase price (cost basis) that was deducted from the settlement. Make sure you have documentation showing what was paid for the vehicle originally - purchase agreement, financing documents, etc. They also looked at how attorney fees were handled. If you received a 1099 for the full settlement amount (including what went to your attorney), make sure you properly deducted those fees. Most IRS review letters are just verification requests rather than full audits. Provide the documentation they're asking for, and you should be fine assuming you reported everything correctly.

Hmm, that's a really good point. I never even thought to check that. How would I verify if they're withholding the correct state amount? Just compare my pay stub percentages to my state's tax rates?

The easiest way is to look at your last pay stub from the year and check the state withholding total. Then use your state's tax calculator (most state tax department websites have one) and enter your total income. Compare what you should owe versus what was withheld. Another approach is to check if the state code on your W-2 is correct - there should be a state code in Box 15. Make sure it matches your actual resident state. I've seen employers accidentally use the wrong state code, especially for remote workers.

This really depends on your income level though. $25 extra per check might work great for you guys but would be way too little for higher incomes and too much for lower incomes. It's not a one-size-fits-all solution.

Thanks for the heads up on payroll providers! Any specific ones you'd recommend for someone in my situation? Also, did you set up a separate retirement plan when you made the switch?

I've heard good things about Gusto and OnPay from other single-member S-Corps. They're more modern and user-friendly than what I ended up with. A local bookkeeper who specializes in small businesses could also be a good option - sometimes they offer payroll services bundled with bookkeeping. For retirement plans, that's actually one of the big advantages of an S-Corp. I set up a Solo 401(k) which lets me contribute both as the employer and employee. You can potentially put away much more than you could with just an IRA or SEP. With your income level, you should definitely look into this as it can significantly reduce your tax bill beyond just the SE tax savings.

This is so confusing. My tax person told me to just pay health insurance personally and take the deduction. Is that wrong?

Thanks for mentioning that! I've only claimed the American Opportunity Credit for 3 years so far, so I should be eligible for one more year. And yes, I have my enrollment verification and payment receipts saved. I paid online through my student portal in December 2022, and I have the confirmation email and bank statement showing the payment date. Would those be sufficient documentation?

Those records should be perfect! Keep the enrollment verification showing you were a student during Spring 2023, along with your payment confirmation and bank statement showing the December 2022 payment date. That's exactly the documentation you'd need if there were ever questions about your eligibility. Since you've only claimed the American Opportunity Credit for 3 years, you should be eligible for one more year, which is great since it's generally more beneficial than the Lifetime Learning Credit for most undergraduates.

Did you need to send any documentation with your amended return or did you just keep it for your records? I'm in a similar situation where I need to amend my 2022 return to claim education expenses I paid in 2022 for Spring 2023 classes.