Great thread! I'm dealing with a similar situation and wanted to add that I found it helpful to keep detailed records of all college-related expenses, even the ones that don't qualify for 529 withdrawals. For anyone navigating this, I'd recommend creating a spreadsheet to track: - Application fees (not qualified, but tax-deductible as miscellaneous expenses in some cases) - Enrollment/deposit fees after acceptance (qualified) - Orientation fees (qualified if mandatory) - Required textbooks and supplies (qualified) - Room and board (qualified up to school's published amounts) The documentation really helped when I had questions later. Also, if you're unsure about a specific expense, err on the side of caution and pay out of pocket rather than risk the 10% penalty on non-qualified withdrawals. You can always reimburse yourself later if you confirm it was actually qualified. One more tip: some schools bundle fees together on their bills, so don't be afraid to call the bursar's office and ask for an itemized breakdown if you need clarity on what each charge covers.

This is such a helpful discussion! I'm new to the 529 world and had no idea about the distinction between application fees and enrollment fees. My daughter is a junior in high school, so we're just starting to think about college expenses. One question I have after reading through all these comments - what about college visit expenses? We're planning to visit several schools this spring and summer, and I'm wondering if things like campus tour fees or overnight stay programs count as qualified expenses? Some schools charge $25-50 for official visit programs that include tours, information sessions, and sometimes meals. Also, does anyone know if SAT/ACT prep courses or test fees themselves qualify? My daughter needs to retake the SAT and we're considering a prep course that costs $800. I'm assuming test prep doesn't qualify since it's pre-admission, but the actual test fees might be different? Thanks for all the great advice about documentation - I'm definitely going to start that spreadsheet now rather than trying to piece everything together later!

Does anyone know if this $3,000 limit is per person? Like if my spouse and I file jointly, can we each deduct $3,000 for a total of $6,000?

I went through this exact same situation last year! Lost about $3,500 in the stock market and was kicking myself until I realized it could actually help with my taxes. Here's what I learned: Yes, you can definitely use up to $3,000 of your stock losses to reduce your ordinary income from your job. Since you lost $4,000, you can deduct $3,000 this year and carry forward the remaining $1,000 to next year's taxes. The key thing is to make sure you have proper documentation - keep all your brokerage statements showing the purchase dates, sale dates, and amounts. You'll report these on Schedule D and it flows through to your main 1040 form. One thing that caught me off guard was wash sales - if you bought back the same stock within 30 days of selling it at a loss, the IRS disallows the loss deduction. So make sure you didn't accidentally trigger any wash sale rules with your transactions. At least we can get some tax relief from our investing mistakes, right? Silver lining to a rough year in the markets!

Don't forget about inventory management implications! If you're currently recording these as sales and then writing them off, your sales forecasting data is probably all messed up. We had this exact problem - our demand planning system was counting samples as legitimate customer demand, which was throwing off our forecasting algorithms. Once we reclassified samples as marketing expense (promotional units), our forecasting accuracy improved by almost 20%. Also, check if you need to adjust your sales team's commission structure. If they're getting commission on these "sample sales" that then get written off, you're probably overpaying commissions.

Great question about the multi-state sales tax treatment! I work for a mid-sized distributor and we went through this exact same issue last year. First, definitely agree with the earlier comments that your current accounting method isn't correct - these should be recorded as marketing expenses, not sales. We were doing something similar and had to restate several months of financials once we realized the error. For the sales tax piece, it really does vary significantly by state. We operate in 12 states and found that about half treat promotional samples as exempt from sales tax (but subject to use tax on our cost), while others have specific "free sample" exemptions with documentation requirements. A few states like California have pretty strict rules about what qualifies as a legitimate promotional sample versus a disguised sale. One thing that helped us was creating a formal sample policy that clearly defines the business purpose, limits on sample quantities per customer, and required documentation. This made it much easier to defend our tax position during our recent audit in Ohio. I'd also recommend reaching out to your CPA firm - most have multi-state tax specialists who can help you navigate the specific requirements for the states where you're distributing samples. The compliance requirements can get pretty complex when you're dealing with multiple jurisdictions.

Am I the only one who thinks the 1099-K threshold being lowered is the absolute worst? Now I have to deal with all these discrepancies when before I just reported my income and paid my taxes without all this confusion. I have 3 different payment processors and each one seems to calculate the 1099-K differently. One includes refunds, one doesn't. One includes the fees, one doesn't. It's a nightmare to reconcile!

I completely understand your frustration with the 1099-K discrepancies - this is unfortunately very common with digital businesses using multiple payment processors. Here's what you need to know: You should report your GROSS sales revenue on Schedule C, not the 1099-K amount or the net amount. So in your case, that would be the $59,106.25 from your Square revenue report. Then deduct the $2,127.93 in processing fees as a business expense under "Commissions and fees" on Schedule C. The discrepancy between your gross revenue ($59,106.25) and the 1099-K amount ($58,215.75) could be due to several factors: timing differences (transactions processed in different calendar periods), refunds that were included differently, or chargebacks. I'd recommend calling Square directly to get clarification on this specific difference. For Teachable reporting net amounts - this varies by platform. Some report gross payment amounts, others report what they actually paid out to you. The key is consistency in how YOU report it: always use gross sales as income, then deduct all fees and platform costs as business expenses. Keep detailed records showing your calculation methodology. If there's ever a question from the IRS, you'll be able to demonstrate exactly how you arrived at your reported income figures and why they might differ slightly from your 1099-K amounts.

You're in a really tough spot, but you're absolutely right to report this. I've seen this exact scenario play out with small restaurants - they think because they're "family businesses" they can bend the rules, but the IRS doesn't care about size when it comes to tax compliance. The fact that they haven't even collected your SSN yet is actually a red flag that supports your case - legitimate contractors typically need to provide tax information upfront so the business can issue 1099s at year-end. A few practical tips while you're still there: - Keep a daily log of your hours and duties - Note who gives you instructions and how detailed they are - Document if you're required to be there at specific times vs. having flexibility - Take note of other workers' situations (are they all treated the same way?) The "daily rate" to avoid breaks is particularly problematic because it suggests they're trying to circumvent labor laws, not just tax obligations. This makes it more likely that both the IRS and state labor department will take action. File the Form 3949-A, but also consider calling your state's wage and hour division. Sometimes having multiple agencies aware of the same business can expedite action. Your anonymity is legally protected with both agencies. Don't let the family atmosphere make you feel guilty - they're stealing from you and the government, not the other way around.

The anonymity aspect is crucial here, and you're smart to prioritize that. Form 3949-A is definitely your best bet for anonymous reporting to the IRS. You can submit it online or mail it in without providing your contact information. Beyond the IRS, don't overlook your state's anonymous tip lines. Most states have dedicated hotlines for reporting wage theft and worker misclassification. In many cases, state investigations move faster than federal ones because they have more resources dedicated to local enforcement. Document what you can without being obvious about it - work schedules, how tasks are assigned, whether you use their equipment, and especially any evidence that they treat you like employees while calling you contractors. The "daily rate to avoid breaks" comment would be gold if you could get that in a text message somehow. One thing to consider: if they haven't collected your SSN or had you fill out any tax forms after 3 weeks, that's actually suspicious behavior that supports your case. Legitimate businesses need that information upfront for proper contractor relationships. You're doing the right thing. These schemes hurt honest businesses that follow the law and pay proper taxes. Your report could help protect future workers from the same exploitation.