Just to add some clarity for anyone else reading this thread - Paolo, since your 1099-R shows $2,320 in Box 2a and the "Taxable amount not determined" box in 2b is NOT checked, you're correct that the entire amount is taxable. This will be reported on Line 4a of your Form 1040. One thing I haven't seen mentioned yet is that you should also check if your state has any special rules for retirement distributions. Some states don't tax retirement income at all, while others have partial exemptions. Also, depending on your total income for the year, this additional $2,320 could potentially push you into a higher tax bracket for the portion that exceeds the bracket threshold. Since this is your first retirement distribution, you might want to consider whether you need to make estimated tax payments if you're planning any future distributions this year. The IRS generally expects you to pay taxes as you earn income throughout the year, not just when you file your return.

As a tax professional, I want to emphasize that you're absolutely right to be asking these questions! The 1099-R can be confusing for first-time retirement distributors. Since Box 2b "Taxable amount not determined" is NOT checked on your form, the $2,320 in Box 2a is indeed the taxable amount you'll report on your return. However, I'd recommend keeping all your retirement account statements and contribution records just in case. While the plan administrator's calculation is usually correct, there are rare instances where they might not have complete information about your contribution history (especially if you changed jobs or rolled funds between accounts over the years). Also, don't forget to check Box 7 for your distribution code - this will tell you if you owe any early withdrawal penalties on top of the regular income tax. And as others mentioned, any federal taxes withheld in Box 4 will be credited toward your tax bill, just like withholding from a regular paycheck. Since this is new territory for you, you might want to consider having a tax professional review your return this year, especially if you're planning additional distributions. Better to get it right the first time than deal with IRS correspondence later!

@Sophia Long - As someone who went through this exact decision process with my Gulf Coast property two years ago, I can tell you the rental property classification will almost certainly be your best option given your numbers. With $65K expected rental income and only 28 personal use days, you're well-positioned to meet the requirements. The key is getting to 280+ rental days, which is very achievable in Naples' market. I actually ended up with 315 rental days my first year by mixing seasonal long-term rentals (December-March snowbirds) with shorter Airbnb stays during peak tourist periods. Here's what really sealed the deal for me financially: Beyond the obvious deductions everyone's mentioned (that $10,200 HOA fee, management costs, maintenance), don't overlook some of the smaller deductible expenses that add up. Things like rental platform fees, professional photography for listings, supplies for turnovers, even mileage for property visits. These easily added another $3-4K in deductions for me. One practical tip that saved me headaches: Set up a separate checking account exclusively for the rental property from day one. All rental income goes in, all property expenses come out. This makes tracking so much cleaner for tax purposes and provides a clear paper trail if you ever face an audit. The depreciation benefit alone makes this worthwhile. On your $435K purchase, you'll likely be depreciating around $360K over 27.5 years (roughly $13K annually), which creates significant tax savings even if you have positive cash flow. Just make sure to document everything meticulously - the IRS definitely scrutinizes properties that have personal use mixed in. But with proper records and your favorable usage ratio, you should be golden for rental property treatment.

One aspect that hasn't been fully explored yet is the impact of Naples' specific rental market dynamics on your day count calculations. Having managed several properties in the area, I can tell you that Naples actually has a unique advantage for hitting those 280+ rental day requirements due to its dual-season appeal. You've got the obvious winter snowbird season (December-April), but what many people don't realize is that Naples also sees strong summer demand from families looking to escape the heat up north. This creates almost year-round rental potential, unlike some seasonal markets. For your 28 personal use days, I'd strongly recommend clustering them during the shoulder periods (late April/May and September/October) when rental demand naturally dips. This strategy maximizes your peak season rental income while still giving you quality personal time. A few Naples-specific considerations for your rental property classification: - Many HOA communities require 7+ day minimum stays, which actually works in your favor for day counting (fewer turnovers, easier to track) - The city requires a business tax receipt for short-term rentals ($35/year) - factor this into your deductible expenses - Consider flood insurance if you're near the coast - it's deductible under rental treatment Given your $435K purchase price and expected $65K rental income, the numbers strongly favor rental property classification. The depreciation alone (roughly $13-15K annually) combined with your substantial operating expenses should create significant tax benefits even with positive cash flow. Have you considered what your target occupancy rate needs to be to consistently hit 280+ rental days? In Naples, 85-90% occupancy is very achievable with proper pricing strategy.

I work in HR and see this confusion a lot. The 2B code in December could also happen if you had a status change that would start in January. We sometimes update December coding to reflect upcoming changes. For example, if you switched from full-time to part-time effective January, the system might show 2B in December as it's preparing for the transition. Also, holiday shutdowns sometimes affect hour calculations for December. Worth asking your HR, but probably not a major issue!

This is a great discussion! I had a similar situation with my 1095-C last year where I had different codes in December. After reading through all these responses, I'm realizing that the December code changes are actually pretty common due to how employers calculate hours during the holiday season. One thing I learned from my own experience is that even if you were technically employed full-time all year, the way your employer measures "full-time status" for ACA purposes might be different than your regular employment status. They have to use specific hour thresholds (usually 30+ hours per week or 130+ hours per month) to determine coverage eligibility. @Axel Bourke - based on what everyone's saying here, it sounds like your situation is probably normal and won't affect your tax filing as long as you had health coverage. But definitely worth a quick call to HR just to understand what happened in December. Sometimes it's as simple as holiday time off or reduced hours that month affecting the calculation. Thanks to everyone who shared their experiences and the helpful resources!

Pro tip: Use tax software to run the numbers both ways - with and without claiming certain credits/deductions. That way you can see what gives you the biggest refund. Most of the major tax software options let you try different scenarios before filing. Look into the Saver's Credit too if you did make retirement contributions. It's designed for lower-income folks and can give you a credit of up to 50% of your retirement contributions up to a certain amount.

This is exactly the kind of situation where you can definitely get money back even without paying federal income taxes! I went through something similar when I was working part-time in college. A few key points for your specific situation: **EITC Income Limit**: You mentioned making $18,000, which might put you just over the EITC threshold for single filers with no kids (around $17,640 for 2024). But don't give up yet! Your actual taxable income could be lower after the standard deduction. **Education Credits Are Your Friend**: With $2,200 in qualified education expenses, you're looking at potentially getting the American Opportunity Credit, which can give you up to $1,000 back as a refund even if you owe zero taxes. This alone could make filing worth it. **Strategic IRA Contribution**: If you want to get under that EITC threshold, you could contribute to a traditional IRA before the tax deadline. Even contributing $500 would bring your AGI down to $17,500 and potentially qualify you for both the EITC and education credits. **Don't Forget State Taxes**: Depending on your state, you might also be eligible for state-level refundable credits. Definitely file your taxes - worst case scenario you break even, but you'll likely get something back between education credits and potentially the EITC if you can get your income down slightly. The "free money" people talk about is real for situations like yours!

Quick question about this whole 1099-NEC situation - does it make more sense to use TurboTax or H&R Block when you have one of these forms? I'm in the same boat but haven't started my taxes yet.

Hey! I went through this exact situation with my education internship last year. The fact that you received a 1099-NEC means you're considered an independent contractor for tax purposes, even though it was an internship for college credit. This is actually pretty common with paid educational placements. A few key things to know: - Yes, you'll need to file Schedule C and pay self-employment tax (about 15.3% on your net earnings) - BUT you can deduct legitimate business expenses like mileage to/from the school, any supplies you bought for the classroom, etc. - Keep good records of any expenses related to this work For the financial aid question - this income will count toward your AGI, which could potentially affect your FAFSA calculations for next year, but $2,800 likely won't have a huge impact. Since you're already using FreeTaxUSA, they have good guidance for Schedule C. Just make sure to answer "yes" when they ask if you're self-employed (even though it feels weird!) and enter your teaching assistant work as your "business." The good news is this is totally manageable, and lots of students deal with this same situation. You've got this!