I feel your pain about wanting to avoid amendments! 😫 Just to add some clarity - if you're doing consulting work, you'll want to keep track of ALL your related expenses too. Home office (if you qualify), supplies, software subscriptions, professional development, mileage for business travel, etc. These can offset that self-employment income and reduce both your income tax and self-employment tax. Don't worry about a specific "maximum" - just make sure you're putting everything in the right category and documenting your deductions well.

Based on what everyone's sharing here, it sounds like you're dealing with consulting income, which is definitely self-employment income that goes on Schedule C. I went through something similar last year with freelance work - tried to report it as miscellaneous income to avoid the SE tax headache, but the IRS caught it and sent me a correction notice. The frustrating part is there's really no ambiguity here: if you're providing services as a consultant, it's self-employment income regardless of the amount. The good news is that you can deduct business expenses against it, which can help reduce the overall tax burden. Have you been tracking any business expenses related to your consulting work throughout the year?

Don't forget that if your ISO exercise triggers AMT, you'll be paying tax now on shares you haven't sold yet, which means you need actual cash to pay the tax bill. This caught me off guard last year. If your exercise was substantial, you might want to consider selling just enough shares to cover any potential AMT liability. Yes, those specific shares would be a disqualifying disposition and subject to ordinary income tax, but it might be better than scrambling for cash when your tax bill comes due.

Great thread everyone! I'm dealing with a similar ISO situation and this has been incredibly helpful. One thing I wanted to add based on my experience - if you're using tax software like TurboTax or H&R Block, make sure you're using the deluxe or premium version. The basic versions often don't include Form 6251 for AMT calculations, which is absolutely critical for ISO reporting. I made the mistake of using the basic version initially and it completely missed my ISO exercise reporting requirements. Had to upgrade mid-way through and start over. The premium versions usually have specific sections for stock compensation that walk you through the ISO exercise reporting step by step. Also, if your company uses Carta, Schwab, or E*TRADE for equity management, they often provide tax guidance documents that explain exactly how to report your specific transactions. These are usually much clearer than generic tax software help articles.

Has anyone dealt with the opposite problem? My LLC got a 1099-NEC but the work was actually done by me personally before I formed the LLC. Payment processor refuses to change it saying "we paid the entity listed on your invoice." Now I'm stuck figuring out how to report it.

I deal with business entity transitions all the time in my tax practice, and you're absolutely right to be concerned about this. The payment processor needs to void that S corp 1099-NEC immediately. Here's what's happening: The IRS computer systems will match 1099s against tax returns filed. Since your S corp is dissolved and won't be filing a return, that 1099-NEC will show as "unmatched income" in their system. This can trigger automated notices demanding a tax return for the dissolved entity, even years later. When you contact them again, be very direct: "You have issued a 1099-NEC reporting $X income to [S Corp Name], TIN [number]. This entity was dissolved in 2019 and performed no work in 2024. This form must be voided/corrected to show $0 income, not just transferred to my personal information." If they still won't cooperate, document everything and consider having a tax professional send a letter on letterhead - sometimes that gets better results than individual requests. You might also need to attach an explanation to your personal tax return documenting the error and your attempts to correct it. Don't let this slide - I've seen clients get IRS notices for dissolved entities years after the fact due to uncorrected 1099 issues.

Remember when we all worried about PATH delays? I was stressing just like you last year! My transcript showed PATH status on February 5th, and I got my refund direct deposited on February 22nd without any additional reviews. Isn't it interesting how the IRS created this whole system just to prevent fraud? For me, PATH status did indeed mean approval - just with a mandatory waiting period. Hope yours follows the same smooth path!

I went through this exact situation last year and can share my experience. PATH status means your return has cleared initial automated checks, but it's definitely not a guarantee of approval. During my PATH hold period, the IRS was still verifying my W-2 information against what my employer reported. I actually received a CP2000 notice about 6 weeks after my PATH status began because of a discrepancy they found during this verification process. The key thing to watch for is whether you see a 570 code appear on your transcript - that would indicate additional review is needed. PATH is really just the IRS saying "we can't release EITC/ACTC refunds before mid-February regardless of status" rather than "your return is approved." Keep monitoring those transcript codes closely!

I went through something very similar two years ago with a former client who issued a fraudulent 1099-NEC after we had a contract dispute. Here's what worked for me: 1. File Form 4852 as others suggested, but make sure to attach a detailed written statement explaining the situation. Include dates, communications with your attorney, and any evidence that you performed no work for them during the tax year. 2. Consider filing Form SS-8 if there's any question about whether you were actually an employee vs. contractor - this can help establish that no legitimate working relationship existed during the tax period. 3. Keep copies of everything and send your return via certified mail. The IRS processed mine without issue, but it did take about 6-8 weeks longer than usual. 4. Document everything with timestamps - when you received the 1099, when your attorney contacted them, their lack of response, etc. This creates a clear timeline showing you acted in good faith to resolve the issue. The key is being proactive and thorough with your documentation. The IRS deals with fraudulent information returns more often than you'd think, so they have processes in place to handle legitimate disputes like yours.

I'm dealing with a very similar situation right now - received a 1099-MISC for $15,200 from a company where I did absolutely zero work last year. Like you, it's clearly retaliation related to an ongoing legal matter. One thing I learned from my tax attorney is that you should also consider filing a complaint with your state's Department of Labor or equivalent agency if the fraudulent 1099 is related to employment disputes. They sometimes have faster resolution processes than waiting for the IRS to investigate. Also, make sure to keep detailed records of any financial accounts that show NO payments from this company during the tax year. Bank statements, PayPal records, etc. This creates a clear paper trail proving you never received the reported income. I've been screenshots every relevant account statement just to be thorough. The whole situation is incredibly stressful, but from what I've researched, the IRS does take fraudulent information returns seriously, especially when there's clear evidence of retaliation. Hang in there - you're doing the right things by working with your attorney and being proactive about the filing.