Did you end up having to file an amended return or did the IRS just adjust it for you? Also, how much was the penalty? Just curious because I might be in a similar boat.

The IRS adjusted it for me - I didn't have to file an amended return. They sent a notice explaining the changes and giving me 30 days to either pay or dispute their calculation. The penalty wasn't huge - about $25 plus interest. But the annoying part was having to pay the self-employment tax I was trying to avoid in the first place, plus dealing with the stress of getting an IRS letter. So I definitely learned my lesson about trying to classify 1099-NEC income as anything other than self-employment income on Schedule C!

I used FreeTaxUSA last year for my taxes including a Schedule C for freelance work. It was pretty straightforward and completely free for federal filing (state was $15). They walked me through all the Schedule C stuff with simple questions. Way cheaper than TurboTax and handled everything I needed.

What's the deadline for filing the W8BEN? I have a similar situation but my broker keeps saying they need extra documentation beyond just the W8BEN form and I'm getting worried about timing.

Technically the W8BEN should be on file before any payments are made to you, but you can submit it anytime. It's valid for three years from the date signed unless your circumstances change. Some brokers do require supporting documentation like a certificate of residence from your home country's tax authority or copies of your passport/visa. This varies by institution and sometimes depends on the amount of money involved. If they're asking for extra documentation, it's best to provide it quickly rather than argue, as they can withhold at the full 30% rate without proper documentation.

Yes, you absolutely need to report it even if you didn't receive a form! Banks only send 1099-INTs when the interest is $10 or more, but ALL interest income is taxable and must be reported on your return. And yes, the bank almost certainly reported it to the IRS under your SSN even if they didn't send you a form. If you don't report it, you might get a letter from the IRS later asking about the discrepancy. It's not worth the hassle over a small amount - just include it on your Schedule B.

Thanks for bringing this up! The camera accessories I bought were actually under $1,000 total, so I'm assuming I can deduct them fully this year? They're things like extra batteries, a stabilizer, and some lighting equipment that I'll definitely use for more than a year.

You're welcome! Yes, if the accessories are under $1,000 total, you can typically deduct them fully this year. The IRS's de minimis safe harbor election allows businesses to deduct small equipment purchases under $2,500 per item immediately rather than depreciating them. Just make sure to have a written accounting policy in place that states you're electing to use the de minimis safe harbor for items under $2,500. You don't need to file this policy with the IRS, but you should keep it with your tax records. Items like batteries, stabilizers, and lighting equipment definitely qualify as ordinary and necessary business expenses for a videographer.

This is such good advice. I got audited last year for my small business and they wanted to see EVERYTHING, even promotional stuff. Better safe than sorry!

Does this work for small companies too? I work for a business with only 8 employees and we don't have much in the way of benefits. Would it be complicated for them to set this up?

It actually can work for companies of any size! There are third-party benefits administrators that specialize in helping small businesses set these up with minimal administrative burden. The company benefits too because they pay less in payroll taxes on the money you set aside. For a company with 8 employees, it would be pretty simple to implement. There are even some payroll providers that include this feature as part of their standard service. The tax code (Section 132) doesn't have minimum company size requirements for offering qualified transportation benefits.

Have you tried any of the tax software options to figure this out? I've been using TurboTax but it's not super clear on these parking deductions.

I've tried both TurboTax and H&R Block software. Neither one handles this particularly well in my opinion. They'll tell you work parking isn't deductible if you're an employee, but they don't proactively suggest the pre-tax transportation benefit as an alternative. The best tax software for this specific situation was actually FreeTaxUSA - they have a surprisingly good knowledge base that explains transportation benefits and even provides language you can use when talking to your employer about setting it up. They also have better self-employment expense categories if you're doing gig work and can deduct some parking that way.

That's a fair point I hadn't considered. They mentioned they'd "already issued too many W-9s" this year, but I'm not sure what that really means from a tax perspective. Is there some limit to how many W-9s someone can issue in a year? Or are they trying to keep their reported income under some threshold?

There's no limit to how many W-9s someone can issue - that excuse doesn't make any sense. A W-9 is just a form that collects your tax ID information so someone can properly report payments made to you. What they might be concerned about is total reported income. If they're receiving certain benefits (healthcare subsidies, income-based loan repayments, etc.) or if they're close to a higher tax bracket, they might be trying to keep additional income off their returns. Another possibility is they're collecting unemployment or other benefits that would be reduced if they report more income.

But how would that work if they're being paid by a single client? Would the client have to cut separate checks to each partner? My band runs into this issue with gigs sometimes.