Did you have to pay self-employment taxes on the 1099 income? I'm in a similar situation and wondering if that approach would cost more than just reporting it as regular income.

Yes, I did have to pay self-employment taxes, which was about 15% on top of regular income tax. That was definitely the downside of the 1099 approach. But what helped offset some of that was being able to deduct legitimate business expenses that I wouldn't have been able to deduct otherwise. I was able to write off a portion of my phone bill (since I was on call), work boots, tools I purchased, and even mileage when I had to drive to purchase supplies. My tax guy helped me identify all the eligible deductions, which reduced the taxable income substantially.

This is actually a really good point. I think OP needs to clarify whether they were hired with the requirement to live there, or if they were a tenant first and the work arrangement came later. That seems to be the crucial factor.

Did you have to do anything special when submitting the amended returns? Like explain why you were changing things or attach any documents? I'm worried I'll mess up the amendment process somehow.

We included a detailed statement explaining exactly what happened - that we discovered our previous preparer had included false deductions without our knowledge, and we were voluntarily correcting the error as soon as we discovered it. Our CPA advised us to be completely transparent about the situation. We attached documentation showing the correct information for each modified item. The most important part was being clear and thorough about what was being changed and why. Our CPA said this approach often helps avoid deeper scrutiny since it shows good faith. Just make sure your EA documents everything properly and includes a clear explanation of the circumstances.

I filed an amended return in January and it took almost 5 months to get processed. The IRS website says 16 weeks but that seems optimistic based on what I've seen in tax forums. You can check the status with the "Where's My Amended Return" tool on the IRS website.

At what income level does S-Corp election make sense? I've heard different opinions about whether it's worth it when your business makes less than $100k annually. Is there a general rule of thumb?

The general rule of thumb is that S-Corp election starts making financial sense when your net business profit reaches approximately $40,000-$50,000 annually. Below that, the additional costs of running an S-Corp (payroll processing, more complex tax filing, etc.) often outweigh the self-employment tax savings. For ACA subsidy purposes specifically, S-Corp can be beneficial at even lower income levels sometimes, because properly structured salary vs. distributions can optimize your MAGI. But this requires careful planning and consistent profitability, which might be challenging with the variable income described in the original post. Always best to model different scenarios with actual numbers before making this decision.

I thought QSEHRA was only for businesses with employees? Can you really set one up if you're a single-member LLC with no employees besides yourself?

Does this apply to utilities too? I kept utilities on in my name for about 2 months after moving out while finding a tenant. Can I deduct those as rental expenses or does the "available for rent" rule mean I'm out of luck?

For utilities specifically, you can deduct them as rental expenses once the property is "available for rent" - meaning it's being marketed as a rental, even if you don't have a tenant yet. The key is having documentation that shows you were actively trying to rent it out (listing photos, advertisements, etc.). If you kept utilities on simply while deciding what to do with the property or while making repairs before putting it on the market, those expenses aren't deductible yet. It's all about when you officially changed the property's purpose to "income-producing.

I used TurboTax for a similar situation last year. In my experience, it does a slightly better job with rental property partial year usage. There's a specific screen that asks about dates of conversion and it has separate entries for expenses during the rental period vs. the whole year.

Thanks for all the responses everyone! I finally heard back from my company's HR person. Turns out the "\" was indeed a software glitch in their payroll system. They're sending corrected W2s, but she confirmed it doesn't affect any of the tax calculations since there wasn't an amount associated with it. I feel much better now knowing it won't delay my refund. Appreciate all the help!

Is there a deadline for requesting a W-2c? I think I might have an error on mine from last year but never followed up on it.