Former university bursar office employee here! This happens ALL THE TIME. Schools are required to report payments in the calendar year they're received, not the academic year they apply to. Most likely explanation: you either made a payment in January 2021 for your final semester, or there was some kind of adjustment to your account in 2021 (refund, late scholarship, etc). Box 1 showing $875 means money changed hands somehow. Call the bursar's office (not financial aid) and ask for a detailed explanation of what triggered the 1098-T. They can pull up your account history and tell you exactly what happened. If it truly was issued in error, they can issue a corrected form. But honestly, it's probably accurate according to IRS reporting rules, just confusing from your perspective.

Quick question - what tax software are people using to handle these kinds of education credit issues? I've got a similar situation with a 1098-T from a school I transferred from, and TurboTax is giving me confusing results.

If you want to avoid calling altogether, you can also check your tax account online at IRS.gov. Create an account (if you don't already have one) and look at your account balance. It will show the actual amount you owe. If it only shows one penalty amount of $217.35, then that confirms you only need to pay once. The online account is pretty accurate and updates within a few days of notices being sent out. Might save you the hassle of calling.

Just want to add - make sure to keep BOTH notices! Even if you only pay once, keep both in your records. The IRS sometimes has one department that doesn't know what the other is doing, and you might need to prove later that you received duplicate notices if they try to say you didn't pay one of them. Also check the payment vouchers carefully - sometimes they have different payment processing codes even if they're for the same penalty. In that case, use the voucher from the notice with the Caller ID.

Another perspective: I have three dry cleaning locations and used a tax preparer for years. Switched to a CPA two years ago and my tax bill dropped by nearly $7500 the first year. The difference? My CPA understood how to properly categorize equipment depreciation across multiple locations, helped restructure my business entity, and identified legitimate meal and vehicle deductions I was missing. For food businesses, there are TONS of industry-specific deductions a specialist might know. One tip: don't just get any CPA. Find one with restaurant/food service experience. They know the specific deductions and challenges in your industry.

One thing nobody has mentioned - ask your current tax preparer if they're an Enrolled Agent (EA). Some tax preparers have this credential, which means they're federally licensed and can represent you before the IRS just like a CPA. If your current preparer is an EA with small business experience, they might be perfectly qualified and cheaper than a CPA.

In addition to the tools others mentioned, don't forget you'll need to handle your state unemployment taxes and reporting for your S-Corp employees (including yourself if you take a salary). Each state has different systems, but most have online portals now. For 1099s, remember the deadline is January 31st, so that should be your first priority after getting payroll wrapped up. QuickBooks can generate these, but you need to make sure your vendor records include tax ID numbers. If you're really in a time crunch, consider hiring a bookkeeper just to help with year-end instead of a full CPA. They're usually more available and less expensive, and can handle the compliance pieces while you focus on tax planning.

Just a quick heads up on the 1099 forms - they've changed significantly in recent years. What used to be reported on 1099-MISC for contractor payments now goes on 1099-NEC (Non-Employee Compensation). 1099-MISC is still used but for different types of payments. Also if you're doing this yourself, don't buy the forms from office supply stores. You can e-file directly through the IRS FIRE system if you have less than 250 forms, or use a service like Tax1099.com which is what I use for my small business. Costs about $3.50 per form but saves tons of time.

Pro tip: If you're waiting for the 2025 forms to appear on payusatax.com, you can also use EFTPS.gov (Electronic Federal Tax Payment System). It's free and run directly by the Treasury. The downside is you have to enroll ahead of time and they mail you a PIN, which takes about a week. But they usually update for the new tax year by January 2nd, sometimes even before New Year's. I switched from payusatax to EFTPS three years ago and never looked back. No more fees!

Has anyone had issues with payusatax.com payments not being properly credited to their account? Last year I made my payment on January 12th and the IRS didn't show it as received until February 3rd. Caused me a bunch of headaches.