A lot of good info here but nobody mentioned that the timesheet might be misleading you. Your total pay is still $520 ($327 taxable wages + $193 non-taxable reimbursement). You're not losing money - the company is just separating the taxable from non-taxable portions as they should. Check your final paystub - you should see: - Gross earnings: $327 - Mileage reimbursement: $193 - Total: $520 (before tax withholding) Then taxes would only be calculated on the $327 portion.

This is a really helpful thread! I'm also a delivery driver and was confused about the same thing on my paystubs. Just to add one more perspective - make sure you're keeping good records of your actual miles driven vs. what your employer is reimbursing you for. In my case, I noticed my employer was only reimbursing me for "delivery miles" (the distance between stops) but not for the miles I drove to get to my first delivery or back home from my last one. Those "deadhead" miles can add up over time. Since the reimbursement rate is meant to cover all your vehicle costs (gas, wear and tear, depreciation, etc.), you want to make sure you're being reimbursed fairly for all business-related driving. If there's a significant gap, it might be worth discussing with your employer or at least tracking those unreimbursed miles for your own records.

Does anybody know if travel insurance would be tax deductible if it was for a business trip? I sometimes buy travel insurance when I go to conferences for work and I'm wondering if that would be different from buying it for family members.

This is such a helpful thread! I'm dealing with a similar situation where I paid for my elderly aunt's travel insurance when she visited from Canada last year. Based on what everyone's shared here, it sounds like I'm out of luck for deducting the travel insurance itself since she's not my dependent. But I'm really interested in what @Malik Davis mentioned about direct medical payments. My aunt had to see a specialist while she was here for a pre-existing condition, and I paid the $800 bill directly to the doctor's office since her Canadian insurance didn't cover it in the US. If I understand correctly, this might actually be deductible even though the travel insurance isn't? I'm also curious about the tools people have mentioned - I've been struggling to find clear answers on some of my other tax questions too. The IRS website is so confusing sometimes, and like others have said, getting through on the phone is nearly impossible. Thanks for all the insights everyone!

So I was in your exact position last year driving for multiple 1099 contracts. Here's what I learned about the vehicle expenses specifically since you mentioned doing a lot of driving: With an LLC/S-Corp, you have two options for vehicle expenses: 1. Actual expenses: track all gas, maintenance, insurance, depreciation, etc. 2. Standard mileage rate: use the IRS rate (65.5 cents per mile for 2023) The standard rate is usually better for high-mileage newer vehicles. If you're driving 20k+ business miles per year, that's a $13,000+ deduction just from mileage! Either way, you need a mileage log. I use MileIQ app but there are tons of options.

I'd suggest being really careful about that $13k shortfall you discovered - that's a significant gap that could lead to penalties and interest if not addressed quickly. You might want to make an estimated tax payment ASAP for Q4 if you haven't already. Regarding the LLC/S-Corp decision, at $150k income it's definitely worth considering, but don't rush into it without understanding all the implications. The tax savings can be substantial (potentially $5k-10k annually), but there are ongoing compliance costs and responsibilities. One thing that might help: since you're already tracking business miles for your driving, make sure you're maximizing that deduction regardless of your entity structure. With significant business driving, you could easily have $10k+ in vehicle-related deductions alone. For the rental property, your colleague is probably right - most people don't need a separate LLC just for one rental from a tax perspective. The liability protection aspect is separate from taxes though. Given your tight cash flow situation ($105k needed for expenses), I'd recommend getting a proper analysis done before making any entity changes. The "reasonable salary" requirement for S-Corps could impact your cash flow planning significantly.

Something similar happened to my wife last year. Turned out someone had her SSN and attempted to file a return. The most important thing is to ACT FAST. The longer this goes unresolved, the more complicated it can get. When we called the IRS, they put a special marker on her account and gave us a PIN we need to use for filing taxes going forward. It protects against anyone trying to file with her SSN again. You should ask about this when you talk to them!

I went through something very similar about 6 months ago - that sinking feeling when you see something unexpected in your IRS account is awful! Since you confirmed it's showing up in your official IRS online account, this is definitely legitimate and needs immediate attention. Here's what worked for me: I filed my legitimate return first thing the next morning (even though I was worried about the verification issue), then immediately called the IRS. When I got through, I explained that I had a verification notice in my online account but had never failed to file. The agent was actually really helpful and walked me through the process. In my case, someone had attempted to file a return with my SSN but it got flagged by their fraud detection system before processing. The "verification of non-filing" notice was basically the IRS asking me to confirm I hadn't actually filed yet, which cleared up the confusion. The whole thing took about 2 weeks to resolve, and I did get my refund (just delayed). The agent also set me up with an IP PIN for future protection. Don't let the stress eat you up - this is more common than you'd think and the IRS has good procedures for handling it!

Form 3176C is basically the IRS saying "hold up, we need to double-check some stuff before we send your refund." It's not necessarily bad news - just means they want to verify income, dependents, or other info on your return. The waiting sucks but it's pretty routine. Just respond quickly with whatever docs they're asking for and you should be good to go!

I went through this exact same thing last year with Form 3176C! The worst part is definitely the waiting, but here's what helped me: respond ASAP with all the requested documents, send everything certified mail so you have proof they received it, and don't panic if you don't hear back right away. The IRS moves slow but they will eventually process it. My refund came through after about 10 weeks once I sent in the verification docs. Hang in there!