I was wondering this exact thing last year and called my accountant in a panic thinking I'd missed filing these 941 forms! She laughed and told me not to worry - sole props without employees just need Schedule C, Schedule SE for self-employment tax, and possibly estimated quarterly payments (Form 1040-ES) if you expect to owe more than $1000 in taxes. She said a super common mistake is confusing independent contractors (1099 workers) with employees (W-2 workers). With contractors, you don't withhold taxes or pay employment taxes, so no 941 needed!

Great question! As everyone has mentioned, you definitely don't need Form 941 as a sole proprietor with no employees. I went through the same confusion when I started my marketing consultancy. One thing I'd add that hasn't been mentioned yet - make sure you're keeping good records of those 1099s you're issuing to contractors. You'll need to file Form 1096 (Annual Summary and Transmittal) along with all your 1099-NEC forms by January 31st each year if you paid any contractor $600 or more. Also, since you mentioned being worried about missing important forms, consider getting familiar with Publication 334 (Tax Guide for Small Business). It's a comprehensive guide from the IRS that covers all the tax obligations for different business structures. Really helped me understand what applies to my situation vs. what doesn't. You're doing everything right with Schedule C and issuing 1099s to contractors. The IRS actually has a pretty clear distinction between employer obligations (Form 941, W-2s, payroll taxes) and business owner obligations (Schedule C, 1099s, self-employment tax). You're firmly in the latter category!

I'm so sorry for your loss, Amina. Dealing with inherited financial accounts while grieving is incredibly challenging, and you're doing the right thing by trying to understand the tax implications. Everyone here has given you excellent advice about the tax treatment - you're correct that the entire HSA amount will be taxable income, but the good news is you won't face the 20% penalty since this was an inheritance distribution. One thing I'd add is to be very careful about the timing when you report this. Since your father passed in September 2021, the critical question is when you actually received and deposited that check. If it was in late 2021, you may need to file an amended 2021 return. If it was in 2022, then you'd report it on your current return. When you're in FreeTaxUSA, look for the section where you enter your 1099-SA. There should be a specific option for inherited HSA distributions or death distributions. Make absolutely sure you select this option so the software doesn't mistakenly apply the 20% penalty. If you're feeling overwhelmed by all this (which would be completely understandable), don't hesitate to consult with a tax professional who has experience with inherited accounts. Sometimes having expert guidance during such a difficult time is worth the investment. Take care of yourself through this process. You're handling a complex situation with thoughtfulness and responsibility.

I'm so sorry for the loss of your father, Amina. Navigating tax issues while grieving is incredibly difficult, and you're showing real strength by trying to handle this properly. The community has given you excellent advice about the tax treatment of your inherited HSA. Just to summarize the key points: you'll owe regular income tax on the full amount, but you won't face the 20% penalty that normally applies to HSA withdrawals since this was a death distribution to a beneficiary. One crucial detail that will determine your next steps is exactly when you received and deposited that check from the bank. If you received it in 2021, you'll need to report it on your 2021 tax return (which may require filing an amended return if you've already filed). If you received it in 2022, then you'd report it on your current 2022 return. When you use FreeTaxUSA to enter your 1099-SA, make sure to look for the specific option that indicates this was an inherited HSA or death distribution. This is important because it prevents the software from incorrectly applying the 20% penalty. If all of this feels overwhelming - and it absolutely would be understandable if it does - please consider reaching out to a tax professional who has experience with inherited accounts. Sometimes having expert guidance during such a personal and difficult time is worth the investment for your peace of mind. You're handling this situation with such care and responsibility. Take it one step at a time, and don't hesitate to ask for help when you need it.

Just be careful with using assessed values! I'm in California and our assessed values are based on Prop 13 which limits increases to 2% per year regardless of actual market appreciation. My client tried using the assessed value for inherited property and it was WAY below market value at the time of death. Would have resulted in a huge overtaxation when they sold!

Great question! I've dealt with this exact scenario multiple times. The key is establishing a "reasonable" basis using whatever documentation you can gather. Here are the methods I've successfully used: 1. **County assessment records** - While not perfect, they're acceptable when properly adjusted. Look at the assessment-to-sale price ratios in that area during the inheritance year. 2. **Zillow/online estimates** - Print out historical estimates from the inheritance date. While not ideal, I've seen these accepted when combined with other evidence. 3. **Real estate agent CMAs** - Many agents can pull historical comparable sales data going back 10+ years. This creates a solid foundation for your basis calculation. 4. **Estate tax returns** - Check if the estate filed Form 706. Even if not required, sometimes executors file anyway and include property valuations. The IRS understands that perfect documentation isn't always available for inherited property. Document your methodology clearly, show good faith effort to determine fair market value, and keep detailed records of your approach. I've never had an issue when the method was reasonable and well-documented. Time-wise, you might consider filing an extension if you need more time to gather supporting documentation properly.

Another avenue worth exploring is checking with local title insurance companies in the area where the properties are located. Even if you don't know which specific company handled your father's transactions, many title companies maintain searchable databases of past transactions and can look up properties by address or owner name going back decades. I also want to mention that if you're completely unable to establish the original purchase price through any of these methods, the IRS does allow you to use "reconstructed records" as long as you can demonstrate that you made a good faith effort to locate the actual records. This might involve getting appraisals that estimate what the property would have been worth at the time of purchase, using historical market data and comparable sales. Keep detailed documentation of every attempt you make to find the original records - phone calls, letters, visits to offices, etc. This paper trail will be crucial if the IRS ever questions your cost basis determination. The fact that your father's stroke affected his memory and that he kept poor records creates a legitimate hardship situation that the IRS typically accommodates when reasonable efforts have been made to reconstruct the information.

I went through this exact situation with my father-in-law's properties after he developed dementia. One resource that hasn't been mentioned yet is checking with the local building department or planning office. If your father made any significant improvements to these rental properties over the years (additions, major renovations, etc.), there should be building permits on file that show the dates and estimated costs of the work. These improvements would increase your cost basis, and building departments typically keep permit records indefinitely. Even if you can't find the original purchase price, having documentation of substantial improvements can significantly reduce your capital gains tax liability. Also, if your father was meticulous about anything, check for old homeowner's or rental property insurance policies in his files. Insurance companies require periodic updates of coverage amounts, so even old policy renewal notices might give you clues about property values at different points in time. Sometimes people keep these documents in safety deposit boxes or with important papers even when they don't keep other financial records. Don't give up - I know it feels overwhelming, but between all these suggestions, you'll likely find enough information to establish a reasonable basis that will satisfy the IRS requirements.

Just wondering if anyone knows if the threshold for receiving a W-2G form for sports betting? I won a $2,100 parlay but never got any tax form from the betting site.

This is such a timely question! I went through the exact same confusion last year as a new bettor. The gross vs net reporting requirement is definitely counterintuitive, but unfortunately that's how the IRS treats gambling income. One thing that really helped me was setting up a simple tracking system from day one this year. I created a basic spreadsheet where I log each bet - date, platform, amount wagered, outcome, and running totals of wins/losses. It takes maybe 30 seconds per bet but saves hours during tax season. Also worth noting - if you're betting regularly, you might want to consider whether itemizing deductions makes sense for you next year. Even if the standard deduction is higher this year, your situation might change. I ended up itemizing for the first time because between my gambling losses, charitable donations, and some medical expenses, it actually saved me money. The key is just staying organized and keeping good records. The platforms are getting better at providing tax documents, but having your own backup records gives you peace of mind. Good luck with your taxes!