Don't feel bad, I've been through this every year for 5 years now and still get anxious! Quick tip - set a calendar reminder for early January next year to request tax info from the daycare. Most are prepared for this question in Jan/Feb but get annoyed by April when they've answered it 100 times already. Also, if you're using TurboTax, it actually has a feature where you can look up provider EINs if you used the same daycare last year. Saved me when one of our providers changed ownership and I needed the new EIN.

Great question! I went through this exact same stress last year with my twin boys at two different daycares. Here's what worked for me: Most daycares are totally used to this request, especially during tax season. Just call and say "Hi, I'm preparing my taxes and need your EIN and the total amount I paid for childcare in 2024 for tax reporting purposes." That's it! A few things that helped me: - Call during business hours but not pickup/dropoff times when they're swamped - Have your child's name and your account info ready - Ask if they have a standard form they provide to parents for tax purposes If you paid by credit card or check, your bank statements can help verify the amounts. I actually created a simple spreadsheet tracking all payments which made everything so much easier. Don't overthink it - you're just asking for basic business information that every legitimate childcare provider should readily provide. You've got this!

Another approach - have you tried explaining to your contractor that they REALLY need to give you their info? If they're a legitimate business, they should understand this is required. I've had success with telling contractors that I'm legally required to report payments over $600, and without their SSN/EIN, they might face issues with the IRS themselves. Sometimes they just don't understand the importance. You might also want to have them complete a W-9 form which officially requests their tax ID information. Send it with a gentle but firm explanation that you cannot make future payments without this completed form.

Great question! I went through this exact situation last year with a freelance graphic designer. You absolutely can e-file your personal return through TurboTax and mail the 1099-NEC/1096 forms separately - they're completely independent processes. For your personal return, just claim the $1,800 deduction on your Schedule C (or Schedule C-EZ) as usual. The IRS doesn't require you to have the contractor's TIN to claim legitimate business expenses. For the 1099-NEC, fill it out with "Applied For" in the TIN field and mail it with Form 1096 to your state's designated IRS processing center (you can find the address in the 1099 instructions). Make sure to keep copies of all your attempts to get their SSN/EIN - emails, texts, certified mail receipts, etc. One tip: Send the contractor a formal W-9 request via certified mail with return receipt. This creates an official paper trail and sometimes the formality finally gets them to respond. You can download the W-9 from IRS.gov. Don't let this contractor's lack of cooperation delay your filing or cost you a legitimate deduction!

Another option worth considering is filing Form 8832 first to elect to be taxed as a C Corporation, then immediately filing Form 2553 for S Corp status. Sometimes this two-step approach can work outside the normal S Corp election deadline. Talk to your accountant about this strategy - it's worked for some clients at our firm.

Don't forget that even if you successfully convert to an S Corp, you need to run payroll and pay yourself a "reasonable salary" before taking any distributions. Many people miss this and end up with IRS problems. My brother tried taking mostly distributions with a tiny salary and got hit with penalties for avoiding payroll taxes.

I'm still confused about this. Can I claim exempt just for December when I'm working all that overtime, then switch it back in January? Or is exempt an all-year thing?

I see a lot of confusion here about withholding vs. exemptions. Let me try to clear this up from a practical standpoint. The "exempt" checkbox on your W-4 is NOT a tool for managing cash flow during busy seasons. It's a very specific declaration that you expect ZERO federal tax liability for the entire year. This typically only applies to people earning very little (below the standard deduction threshold). If you're working overtime during the holidays and expect to owe taxes for the year, here are your legitimate options: 1. Adjust your withholding allowances on your W-4 to have less tax taken out (but still some) 2. Use the IRS withholding calculator or tools like those mentioned above to find the right balance 3. Accept that you'll get a larger refund when you file, but have less take-home pay now The key is being honest about your expected annual income. If you'll owe taxes for the year, claiming exempt is tax fraud, even if it's just for December. The IRS doesn't care that you need more cash for the holidays - they care about accurate withholding based on your actual tax situation. Better to adjust your withholding legally than risk penalties and a massive tax bill later.

One thing to consider is that the situation might get more complicated if your royalty income continues to grow. Once you start getting into larger amounts ($10k+), some US companies get more strict about tax compliance. I'm a composer in Brazil and my initial small royalty payments were handled exactly like yours - no withholding, no forms. But when I had a track used in a popular show and my payments jumped to $12k, suddenly the distribution company got very concerned about proper documentation! They retroactively requested W8-BENs and threatened to withhold 30% from future payments until I complied.

This is actually a really important point about being proactive before your income grows. I'm a songwriter in the UK dealing with something similar - started small with streaming royalties but now getting sync placements that are pushing my US income much higher. What I learned is that even though the treaty protects you from owing tax, you still want to establish proper documentation early. I sent W8-BEN forms to all my US distributors even when they hadn't asked, and kept certified mail receipts as proof. When my income jumped last year and they suddenly got worried about compliance, I already had everything in place. The key is not waiting for them to figure out their obligations - take control of your own documentation. It's much easier to send the forms now when the amounts are smaller and there's no pressure, rather than scrambling when they panic over larger payments and threaten to start withholding at 30%.