Happy to help clarify this! You're definitely not alone in being confused about TINs - it's one of those things that sounds way more complicated than it actually is. For most people in your situation, your TIN is simply your Social Security Number (SSN). The IRS uses "TIN" as an umbrella term for all taxpayer identification numbers, but for U.S. citizens and permanent residents, that's just your 9-digit SSN in the XXX-XX-XXXX format. You can find your SSN on your Social Security card, any previous tax returns you've filed, W-2 forms from employers, or even bank statements (though some banks only show the last 4 digits for security). If you've ever filled out tax forms before, you've already been using your SSN as your TIN - you just might not have realized that's what it was called! The only time you'd need a different type of TIN is if you were running a business (which would require an EIN) or if you weren't eligible for an SSN but needed to file U.S. taxes (which would require an ITIN). Since you mentioned this is for financial paperwork and you seem to be a regular individual taxpayer, your SSN is definitely what you need. So no need to apply for anything new - you already have your TIN! Just use your SSN wherever the form asks for your taxpayer identification number.

I totally understand the confusion! I went through the exact same thing when I first started dealing with tax paperwork. The good news is that for most people like yourself, your TIN (Taxpayer Identification Number) is simply your Social Security Number (SSN) - they're the same thing! You can find your SSN on: - Your Social Security card (if you still have it) - Any previous tax returns you've filed - W-2 forms from current or past employers - Bank statements or financial documents (though some only show partial numbers for security) The reason this is confusing is that "TIN" is just the IRS's umbrella term for different types of tax identification numbers. For regular U.S. citizens and permanent residents filing individual taxes, that's your 9-digit SSN. You only need different types like an EIN (for businesses) or ITIN (for non-residents) in special circumstances. So for your financial paperwork, just enter your SSN wherever it asks for your TIN. You don't need to apply for anything new - you already have what you need! Don't feel bad about asking - this trips up a lot of people because the government loves using different terminology for the same thing.

Remember that different PARTS of your settlement might be taxed differently. This is something my accountant explained that I hadn't considered: 1. Compensation for physical injuries/sickness: NOT taxable 2. Emotional distress stemming from physical injuries: NOT taxable 3. Emotional distress without physical injury: TAXABLE 4. Punitive damages: Always TAXABLE 5. Lost wages/back pay: TAXABLE 6. Interest on any of the above: Always TAXABLE The paperwork should break this down. If it doesn't clearly state how much falls into each category, you should absolutely ask for clarification from whoever is administering the settlement.

One thing that hasn't been mentioned yet is the timing of when you receive your settlement versus when it's taxable. I learned this the hard way with my own harassment settlement - even if you receive the money in December, you might be able to defer some of the tax impact depending on how the settlement is structured. Some settlements are paid out over multiple years, which can help with the tax bracket issue that Yuki mentioned. Others allow you to choose between a lump sum or structured payments. If you have that option, it's worth running the numbers both ways since spreading the income over several years could significantly reduce your overall tax burden. Also, don't forget about state taxes! Some states don't tax settlement income the same way the federal government does. I was so focused on federal taxes that I completely forgot to research my state's rules until tax time. The key is getting all this figured out BEFORE you receive the money so you can plan accordingly. Once that check is deposited, your options become much more limited.

I went through this exact situation with my dissolved LLC in 2021. The key thing to understand is that the IRS requires a final return even with zero activity - it's how they officially close your business account in their system. Here's what you need to do: 1. File Form 1065 for 2020 with all zeros but check the "Final Return" box at the top 2. Include Schedule K-1s for both members marked as final returns 3. Attach a statement explaining the business was dissolved in 2020 with the dissolution date For penalties, you definitely have grounds for reasonable cause abatement since you genuinely misunderstood the filing requirements. When you file, include a detailed letter explaining that you read the instructions and believed no filing was required due to zero activity. Reference IRC Section 6651(a)(1) and cite "reasonable cause and not due to willful neglect." The IRS agent's suggestion about amending 2019 doesn't make sense - you need the final return for the actual year of dissolution. I successfully got my penalties waived using this approach, so don't panic about the late filing fees.

I had a very similar situation with my dissolved partnership and want to share what worked for me. Like you, I thought no filing was needed for a year with zero activity, but learned the hard way that the IRS still requires that final return. Here's the exact process I followed that got my penalties fully waived: 1. Filed Form 1065 for the dissolution year with all financial lines showing zeros 2. Checked the "Final Return" box prominently at the top of Form 1065 3. Prepared Schedule K-1s for each partner marked as "Final K-1" 4. Included a separate statement with the business name, EIN, and exact dissolution date For the penalty abatement, I wrote a detailed reasonable cause letter explaining that I had carefully read the Form 1065 instructions and genuinely believed no return was required when there was no income, expenses, or business activity. I emphasized that this was an honest misunderstanding of the tax code, not willful neglect. The IRS accepted my explanation and waived all penalties (which would have been over $2,000). The key is being thorough in your documentation and showing you made a good faith effort to comply based on your understanding of the rules. Don't let that IRS rep confuse you about amending 2019 - you definitely need to file the 2020 return as your final return since that's when you actually dissolved. Good luck!

Has anyone used TurboTax to handle this kind of situation? Do they have a good section for sorting out 1099 deductions vs employee expenses? Trying to figure out if I need to pay for a CPA this year.

I'm dealing with a very similar situation and wanted to share what I learned from my research. The key issue here isn't just the mileage deduction - it's the misclassification problem that several others have mentioned. For the mileage question specifically: No, you cannot deduct your daily commute to the carpentry shop, even as a 1099 contractor. The IRS considers travel from your home to your regular place of business as personal commuting expenses, regardless of your tax classification. However, here's what you CAN potentially deduct as a legitimate contractor: - Travel between different job sites (not from home to the first site) - Tools and equipment you purchase yourself - Work-related supplies - Portion of vehicle expenses for business use (not commuting) - Professional development/training costs But here's the bigger concern - based on your description, you're likely misclassified. If your boss controls your schedule, provides tools, and treats you like an employee, you should probably be getting a W-2. This misclassification is costing you money in additional self-employment taxes. I'd recommend tracking your actual work arrangement details (who provides tools, who sets your schedule, do you work for other companies, etc.) and consider getting professional guidance on whether to challenge your classification with the IRS.

I hate how the IRS treats small S-Corps with these insane penalties! My brother-in-law has a 1-person S-Corp, filed 4 months late (busy with actual real work lol) and got hit with $840 in penalties even though he owed ZERO tax. It's absolutely ridiculous.

I completely understand your frustration! As someone who's dealt with S-Corp filings for several years, I can confirm that yes, the penalties apply even when there's no tax liability. The $210 per shareholder per month penalty is automatic under IRC Section 6699. A few key points for your situation: - The penalty starts accruing from the day after the original due date (March 15th for calendar year S-Corps) - It applies for up to 12 months maximum - Drake should calculate this penalty, but definitely verify it manually One thing that might help your client: if they have a clean filing history for the past 3 years, they may qualify for first-time penalty abatement. Also, if there were legitimate circumstances that prevented timely filing (like their previous accountant's issues), they could potentially argue "reasonable cause" for penalty relief. My advice: file the current year return ASAP, and consider submitting a penalty abatement request with a detailed explanation of the circumstances. Even if partially successful, it could save your client hundreds or thousands in penalties.