Thanks for mentioning the specific tax code sections! That's super helpful. Do you think I should also include a brief letter explaining the situation in more detail, or is the Form 8275 enough on its own?

The Form 8275 should be sufficient on its own if completed properly. There's a section for "Detailed Explanation" where you can provide a concise summary of the situation. Keep it factual and reference those tax code sections. If you want to provide additional context, you can include a brief statement in the "Explanation" section of Schedule 1 where you offset the 1099-MISC income. Something like "See Form 8275 - Reimbursed employee business expenses incorrectly reported as income on 1099-MISC." But don't attach a separate letter - that's not standard procedure and might actually complicate processing.

I went through this last year with a former client who incorrectly sent me a 1099 for reimbursed expenses. I filed Form 8275 with my return in February 2024, and didn't hear anything until June when I got a letter asking for documentation. I sent in all my receipts and expense reports, and by August they sent a determination letter saying they agreed with my position. So about 6 months total from filing to resolution.

This is a really good point! The post office sometimes does "address corrections" based on carrier knowledge which can mask the real problem. Would talking to the postmaster help or is there a specific form for this too?

Talking to your regular mail carrier first is usually helpful, but if that doesn't work, yes - speaking with the postmaster at your local post office is the next step. There's actually a form called PS Form 3575Z "Employee-Generated Change of Address" that they can use to stop automatic "corrections" to specific addresses. The key is making sure they understand that redirecting the mail is masking a problem rather than solving it. Once my postal carrier understood the situation, they started marking the mail as "addressee unknown" and returning it, which eventually forced the IRS to fix their records.

I do this all the time and it works! Just make sure the message is super clear and covers any barcodes on the envelope. I've heard that sometimes the automated sorting machines just read the barcodes and ignore what's written on the envelope.

Thanks for mentioning that! I've been tracking mileage but wasn't sure if I could claim it all since some of it is just going to initial consultations that don't always turn into jobs. Can I deduct those trips too?

Absolutely you can deduct mileage for consultations! Any driving you do for business purposes - including potential clients who don't end up hiring you - is deductible. Those are legitimate business development activities. Just make sure you keep a good mileage log with dates, destinations, and purpose of trips. I use an app that automatically tracks my drives and lets me categorize them as business or personal. Makes it super easy come tax time and gives me something solid if I ever get audited.

The "audit flag" thing is mostly a myth these days. Millions of people take the home office deduction now, especially since covid. Just do it right and don't worry.

Wait, so if I'm trading in my Roth IRA I don't need to worry about this at all? That's a huge relief for part of my portfolio! What about trading between a regular brokerage account and an IRA? Could that trigger wash sales?

You're completely safe trading within your Roth IRA - no wash sale concerns there! Trading between accounts is where you need to be careful. The IRS considers trades across different accounts you own when applying the wash sale rule. So if you sell something at a loss in your brokerage account and then buy it within 30 days in your IRA, you could trigger a wash sale. What makes this particularly bad is that the disallowed loss gets added to the cost basis in your IRA, where it essentially disappears forever since IRAs don't benefit from cost basis adjustments.

TurboTax Premier has been decent for me with handling wash sales, but only if your brokerage provides a correct 1099-B with wash sales already calculated. If you're using a broker that doesn't adjust for wash sales on their forms, you're basically on your own with any software. I've heard H&R Block's premium version is also good for investors, but haven't tried it myself.

15 This is really helpful! So what form should my theater company have used when they gave me a $2,000 "educational stipend" to attend workshops while I was also working as their part-time marketing coordinator? They lumped it all together on one 1099-NEC.

3 It depends on whether the stipend was contingent on your employment. If you had to work as their marketing coordinator to receive the educational stipend, then it's more likely considered compensation and the 1099-NEC might be appropriate. However, if the stipend was truly separate and would have been provided regardless of your marketing work, then it should have been reported differently - potentially on a 1099-MISC Box 3 as "Other Income" which isn't subject to self-employment tax. Your theater company should have documentation about the purpose and conditions of the stipend that would help clarify this distinction.

5 I work in university administration (not accounting) and unfortunately this happens a lot. Your best bet is to escalate to the department chair or dean who approved your stipend, not just talk to accounting. Have them clarify in writing that it was an educational stipend not contingent on services, then take that to accounting. If they still won't budge, you can file your taxes correctly with Form 8275 explaining the discrepancy, but it might trigger a review. Another option is to contact the Taxpayer Advocate Service - they can sometimes intervene when organizations report incorrectly.