This thread has been absolutely invaluable! I'm in the exact same situation - mixed W-2 and 1099 income with the same box 2(c) mistake on my W-4. After reading everyone's experiences, I feel much more confident about how to handle this properly. The consensus here is really clear: uncheck box 2(c) since it's only for multiple W-2 jobs, then use additional withholding on line 4(c) to cover the 1099 taxes. The 25-30% rule for setting aside 1099 income makes perfect sense when you break down the 15.3% self-employment tax plus regular income tax. What really stands out to me is how much more practical this advice is compared to generic tax websites. Things like setting up a separate business checking account, taking photos of receipts immediately, and the tip about reassessing withholding quarterly - these are the real-world details that make all the difference. I'm planning to be conservative with my additional withholding for the first year since I'd rather get a small refund than owe money and face penalties. Once I have a better handle on my actual 1099 income patterns and deductible expenses, I can fine-tune the amounts. Thanks to everyone for sharing such detailed, practical guidance - this kind of community knowledge-sharing is exactly what people need when navigating complex tax situations!

This thread has been incredibly helpful for someone like me who's just starting to navigate mixed W-2/1099 income! I'm actually in a slightly different situation - I have my main W-2 job and just picked up some freelance writing work that will be 1099. Based on all the excellent advice here, I'm planning to update my W-4 to remove any incorrect selections and add additional withholding. One thing I'm curious about that I haven't seen discussed much - for those doing creative/professional services work as 1099 contractors, what kinds of business expenses have you found to be most valuable for deductions? I'm thinking things like professional development courses, industry publications, software subscriptions, etc. I want to make sure I'm tracking everything properly from the start. Also, the advice about setting aside 25-30% immediately when payments come in really resonates. I'm planning to set up that separate "tax savings" account this week. For anyone else just getting started, this thread is truly a masterclass in practical tax planning for mixed income situations. Thanks to everyone for sharing such detailed, real-world guidance!

Great discussion here! I'd like to add one more perspective that's been really helpful for our partnership. We discovered that maintaining a detailed "basis tracking spreadsheet" throughout the year has been invaluable, not just for tax preparation but for making business decisions. Our spreadsheet tracks each partner's beginning basis, adjustments for income/losses, capital contributions, distributions, and most importantly - the impact of non-deductible expenses. This gives us a real-time view of each partner's ability to deduct losses and helps us plan distributions strategically. One thing that surprised us was how certain partnership debt can actually increase your basis and offset some of the reduction from non-deductible expenses. Under the at-risk and passive activity rules, this becomes particularly important if you're in a consulting partnership like yours where income can be variable. Also, regarding the meals issue - make sure you're not missing the new 100% deduction for business meals that was temporarily available for 2021-2022. While it's back to 50% now, there might be some carryover effects depending on when your expenses were incurred. For your $5,200 in non-deductible expenses, I'd strongly recommend running scenarios for how this affects each partner's basis and future loss deduction capacity, especially given your expectation of potential losses next year from equipment purchases. The interaction between basis limitations and equipment depreciation can create some unexpected tax planning opportunities.

Reading through this discussion, I want to emphasize something that might save you headaches down the road - the importance of getting your partnership agreement language right regarding these non-deductible expenses. Many partnership agreements don't specifically address how non-deductible expenses should be allocated, which can create disputes later. Some partnerships allocate them pro-rata based on ownership percentages, while others might allocate them based on who actually benefited from the expense (like if one partner did most of the business travel). Also, consider implementing a monthly or quarterly basis calculation process rather than waiting until year-end. This is especially important given your equipment purchase plans. You'll want to know your basis position before taking on debt or making Section 179 elections, as the timing can significantly impact your ability to deduct losses. One practical tip: if you're using QuickBooks or similar software, set up those separate GL accounts mentioned earlier AND create custom reports that automatically calculate the impact on each partner's basis. We created a simple report that shows each partner's basis after accounting for non-deductible expenses, which has been invaluable for tax planning meetings. Given the complexity you're dealing with and the upcoming equipment purchases, getting a CPA who specializes in partnerships should be your top priority. The basis limitation rules, at-risk rules, and passive activity limitations can interact in ways that create significant tax planning opportunities or traps.

Something else to consider that hasn't been mentioned: if you take bonus depreciation or Section 179 on a vehicle that's used 100% for business and later convert it to personal use or sell it, you might face depreciation recapture, which can be a nasty tax hit. This applies whether the vehicle is in your name or the LLC's name. Also, check with your insurance agent about the actual cost difference between personal and commercial policies for your specific situation. Sometimes the difference isn't as big as people expect, especially if you're already carrying good coverage.

Great discussion here! As someone who went through this exact decision for my property management business, I'd add one more consideration: cash flow timing. If you buy the truck personally and use the actual expense method (rather than standard mileage rate), you can deduct the full purchase price, insurance, maintenance, etc. on your Schedule C. But if you buy through your LLC, the LLC pays these expenses and they reduce the LLC's taxable income before it flows to your personal return. The cash flow difference can matter depending on your situation. With personal ownership, you're paying for everything out of after-tax dollars initially, then getting the deduction later. With LLC ownership, the business pays directly with pre-tax dollars. Also, don't forget about state-specific considerations. Some states have different registration fees or tax treatments for business vs. personal vehicles that could tip the scales one way or another. Your state's LLC annual fees and franchise taxes might also factor into the overall cost analysis. Given that it sounds like you're already committed to 100% business use and proper documentation, either choice can work tax-wise for a single-member LLC. I'd focus on the insurance cost difference and cash flow implications for your specific situation.

I'm dealing with a very similar situation right now - settled a $28k debt for $11k in January and the collection agency is giving me the runaround about issuing a 1099-C. After reading through all these responses, it sounds like I need to report the forgiven amount regardless of whether I get the form. Can someone clarify the timeline for me? Since my settlement was in January 2025, would I report this on my 2025 tax return (filed in 2026) or do I need to do something for my 2024 return that I'm filing now? Also, for the insolvency calculation on Form 982, do I use my financial situation from the exact date of settlement or can it be from anywhere around that time period? I'm leaning toward trying one of the tools mentioned here (taxr.ai) to help me figure out if I qualify for any exclusions, but I want to make sure I understand the basic timeline first.

I'm going through something very similar and wanted to share what I learned from my tax preparer. Even without a 1099-C, you're still legally required to report the forgiven debt as income. The $600 threshold that requires lenders to issue the form doesn't change your obligation to report it. What saved me was discovering I qualified for the insolvency exclusion. My CPA had me list all my assets (bank accounts, car value, home equity, etc.) and all my debts as of the day before my settlement. Since my total debts exceeded my assets by more than the forgiven amount, I could exclude it entirely using Form 982. The key is keeping detailed records of your settlement agreement and your financial position at that time. Even if the IRS never finds out about the forgiven debt, you want to be able to defend your position if they ever ask questions. Better to report it correctly now than deal with penalties and interest later if they catch it during an audit.

I've been helping people with tax issues for years, and Box 14 confusion is extremely common! You're definitely on the right track - VIS and DEN codes are standard abbreviations that employers use for vision and dental insurance premiums. Since these were likely deducted from your pay pre-tax (which is typical for employer-sponsored vision and dental plans), selecting "Health Insurance Premiums" in TurboTax is absolutely the correct choice. The software needs this categorization to properly document these items, but as others have mentioned, it won't affect your refund since the tax savings already happened through payroll deductions. One quick tip: if you want to double-check, look at your final paystub from December - you should see year-to-date vision and dental deductions that match the amounts in Box 14. This confirms they were handled pre-tax. Don't let this last step derail you when you're so close to finishing! You've got the right answer - just categorize both as health insurance premiums and submit with confidence.

I see you've gotten some really solid advice here! As a tax preparer, I can confirm that VIS and DEN codes in Box 14 should absolutely be categorized as "Health Insurance Premiums" in TurboTax. These are standard employer codes for vision and dental insurance premiums that were deducted from your pay on a pre-tax basis. The good news is that even though TurboTax makes this seem like a crucial decision, you're not going to mess up your return by categorizing these correctly. Since the amounts were already excluded from your taxable wages (Box 1), selecting "Health Insurance Premiums" just helps the software properly document what these entries represent. Don't overthink it - you're literally one dropdown selection away from being done! Pick "Health Insurance Premiums" for both VIS and DEN, submit your return, and celebrate getting your taxes finished. You've got this!