Another thing to consider - make sure you understand the difference between a "qualifying child" and "qualifying relative" for tax purposes. Since your daughter is 6 and lived with you both all year, she'd likely be considered a qualifying child if your boyfriend provided more than half her support. But as others mentioned, you as the biological parent have the first right to claim her. The Form 8332 is definitely the way to go if you want to release that claim. Also worth noting that whoever claims her can potentially get the Child Tax Credit too, which could be significant depending on income levels.

I'd also recommend checking if your boyfriend qualifies for Head of Household filing status if he claims your daughter. Since he's been supporting both of you and your daughter lived there all year, he might be eligible which could lower his tax rate significantly. Just make sure he understands that claiming a dependent is a serious responsibility - the IRS can audit and request proof of support, so keep all those receipts for rent, food, medical expenses, etc. Also worth mentioning that if you're receiving any government benefits based on being a single parent, releasing your claim to him could potentially affect those benefits, so double check that too.

I see a lot of people mentioning the tax deduction benefits, but there's another huge advantage to having your home office qualify as your primary place of business - it affects how you calculate your business mileage! If your home is your principal place of business, then every trip to a client site becomes a deductible business trip. If your home isn't your principal place of business, then driving from home to your first client would be considered non-deductible commuting. This distinction literally doubled my mileage deduction last year. Make sure you understand the difference!

Great point about the mileage implications! I'm actually dealing with this exact scenario and want to make sure I understand correctly. If my home office qualifies as my principal place of business, can I deduct mileage for trips like: 1) Home → Client A → Client B → Home (multiple clients in one day) 2) Home → Office supply store → Client → Home 3) Client A → Client B (driving between clients without going home first) I'm tracking everything in a mileage app but want to make sure I'm not missing any deductible trips or accidentally claiming something I shouldn't. The difference between "commuting" and "business travel" seems to hinge entirely on whether my home office truly qualifies as my principal place of business. Also, does anyone know if there are specific IRS guidelines on how to document this properly? I want to make sure my records would hold up if questioned.

Ok just a heads up - I was in this exact situation last year and you should know there are different requirements for the EMPLOYER copy vs the EMPLOYEE copies! The Copy A (red form) that you submit to SSA has strict requirements. But the copies you give employees (Copies B, C, etc.) CAN be printed on plain white paper. Just make sure they contain all the required information in the right format.

Just wanted to chime in as someone who's dealt with this nightmare before! A few additional tips that might help: 1) If you do go the office supply store route, call ahead first - many stores run out of W-2 forms this close to the deadline. I learned this the hard way after driving to 3 different locations. 2) For the Copy A that goes to SSA, you can actually file electronically if you have 250+ forms OR you can request a waiver to file electronically with fewer forms. Might be worth looking into given your time crunch. 3) Don't forget about the state copies! Each state has different requirements, so make sure whatever solution you choose handles your state's specific W-2 format. The good news is your employees will be fine with substitute forms printed on regular paper - I've done this multiple times and never had anyone have issues filing their taxes. Just make sure all the boxes are clearly labeled and the amounts are accurate. You've got this!

One thing that might help you budget better is understanding exactly what gets taken out of your paycheck. You mentioned they "take out taxes" but there are actually several different things being withheld: 1. Federal income tax (this is what you'll get back since you're under the standard deduction) 2. FICA taxes - Social Security (6.2%) and Medicare (1.45%) - these you won't get back 3. Possibly state income tax depending on your state 4. Maybe state disability insurance in some states So when you look at your paystub, make sure you're only counting the "Federal Income Tax" or "Fed Tax" line when calculating what you might get back. The FICA stuff (sometimes shown as "OASDI" and "Medicare") totals about 7.65% of your gross pay and that's gone forever, even for low-income earners. This way you can set realistic expectations for your refund and budget accordingly for next year's tuition and books!

Great question! I was in a similar situation when I was in college. You should definitely get back most or all of your federal income tax withholding since your income is well below the standard deduction threshold. One thing I'd recommend is keeping really good records of all your education expenses throughout the year - tuition payments, required textbooks, lab fees, etc. These can qualify you for education credits that could actually get you more money back than what was withheld from your paychecks. Also, since you mentioned your parents aren't claiming you as a dependent this year, make sure you file your own return! Don't assume they're handling it. You'll need to file to get any refund, and filing as an independent gives you access to the full standard deduction. The timing matters too - file as soon as you get your W-2 in January so you can get your refund money in time to help with spring semester expenses. Every dollar counts when you're paying for school!

I'm a tax attorney who's handled numerous S-Corp audits, and I want to reinforce what others have said here - your accountant's suggestion is a red flag that could lead to serious consequences. The IRS has become increasingly aggressive about S-Corp shareholder compensation issues, particularly after the Tax Cuts and Jobs Act. They've developed sophisticated data analytics to identify S-Corps with unusual 1099 patterns, and shareholder-employees receiving 1099s from their own corporations is one of their primary targets. Here's what many people don't realize: when the IRS reclassifies 1099 income as wages (which they will in your situation), you're not just paying the additional payroll taxes. You're also facing accuracy-related penalties of 20% of the additional tax owed, plus interest compounded daily. I've seen cases where the total cost was 40-50% more than if they had just structured it properly as W-2 compensation from the beginning. The "outside normal duties" argument your accountant mentioned has been consistently rejected by tax courts. In Watson v. Commissioner and several other cases, courts have held that shareholder-employees are performing services in their capacity as employees regardless of how those services are characterized. My strong recommendation: restructure this as performance-based W-2 compensation immediately. Document the business rationale thoroughly, process everything through payroll with proper withholdings, and ensure your total compensation (including these bonuses) meets reasonable compensation standards for your industry and role. The extra payroll taxes are a small price to pay for compliance and peace of mind.

As someone who's been through a similar situation with my own S-Corp, I want to add one more important consideration that hasn't been fully addressed - the potential impact on your business relationships and reputation. Beyond all the tax compliance issues everyone has correctly identified, consider what happens if the IRS does audit you and reclassifies these payments. You'll likely need to file amended returns, and depending on your business structure, this could affect other shareholders, create complications with business loans or credit facilities, and potentially require disclosure to clients or partners. I learned this the hard way when we had to unwind a similar arrangement after getting professional advice that contradicted our original accountant. The administrative burden of correcting everything - amended payroll reports, revised K-1s, notifications to our bank about changes in our financial statements - was substantial and created unnecessary complications with stakeholders who had relied on our original filings. The peace of mind of doing things right from the start really can't be overstated. Structure your performance incentives through proper W-2 compensation, document everything thoroughly, and work with a CPA who specializes in S-Corp compliance rather than someone who suggests arrangements that clearly contradict established IRS positions. Your future self will thank you for taking the conservative, compliant approach rather than trying to save a few dollars on payroll taxes only to face much larger costs and headaches later.