Do you have a specific organizational system you recommend for keeping track of all these records? I'm filing for the first time and want to set things up right from the beginning.

I create a digital folder for each tax year (e.g., "2024 Tax Filings") with subfolders for each form type. Inside the 1099-NEC folder, I save PDFs of all submitted forms, the confirmation emails, and screenshots of submission confirmations. I also keep a spreadsheet listing each contractor, when their form was submitted, and confirmation numbers. For physical documents, I have a similar system with labeled folders in a fireproof filing cabinet. Everything gets retained for at least 7 years. It might seem like overkill, but the one time the IRS claimed we hadn't filed some forms, I had everything organized and was able to prove we had submitted them within 5 minutes of getting the notice.

We've used TaxBandits for the past two years for about 25 contractors. Overall pretty good experience. The interface is a bit dated but it gets the job done reliably. They handle both federal and state filings, plus distribute forms to recipients. Cost is reasonable too - I think we paid around $2 per form last year.

Thanks for the feedback! That's helpful. The cost seems reasonable for the convenience factor. I'll probably go with them unless I hear any horror stories. My main concern is just making sure everything gets filed correctly since it's my first time handling this.

That's what I ended up doing too. After struggling with FreeTaxUSA for this form, I switched to H&R Block online which had clear instructions for employee stock purchase plans. But it did cost about $70 more than FreeTaxUSA, which kind of sucks.

But doesn't TurboTax cost like $100+ more for the version that handles investments? That seems like a lot just for one form. I'd rather figure out FreeTaxUSA if possible.

Thank you!!! This worked perfectly for me. I just called their support line and got through in about 5 minutes. The rep walked me through exactly where to enter the Form 3922 information. For anyone else struggling, here's what they told me: 1. Go to Income > Miscellaneous Income 2. Select "Other Income not reported on a 1099-MISC/NEC" 3. Description: "Employee Stock Purchase Plan - Form 3922" 4. Amount: The difference between box 3 and box 4 multiplied by box 5 Super easy once you know where to look!

I'm the original poster and just wanted to say THANK YOU to everyone who responded. I ended up calling FreeTaxUSA support as suggested here, and they helped me get everything entered correctly. Such a relief to have this figured out! For anyone who finds this thread in the future with the same problem, the miscellaneous income approach worked perfectly. And I'm definitely bookmarking some of these services mentioned for next year when I'll have to deal with selling some of these shares. Thanks again to this awesome community!

Oh that's a huge relief! I was stressing about trying to track down decades-old purchase records. So I just need to document what the value was on the date he passed away? That's much easier since it was only last year and I can look up the historical prices online. Do I need any special documentation to prove that value in case of an audit? Or is just having the date of death and the corresponding stock values enough?

Yes, just document the closing price on the date of death. For additional protection, I suggest taking screenshots or printing the historical price information from a reputable financial website and keeping that with your tax records. If the estate was large enough to file an estate tax return (Form 706), that document would also have the valuation information and would be excellent documentation. But for most people, good records of the date of death values from reliable sources are sufficient for audit protection.

The IRS generally keeps transcripts available for the current tax year and the prior three years through their online system. But they actually maintain records for much longer - typically 7-10 years. For 2016 records, you'll probably need to complete Form 4506-T and mail or fax it to request older transcripts. Or call them directly. There's usually no fee for transcripts (unlike actual tax return copies which cost $50 each).

14 I did equipment financing for my food truck equipment. The key difference is whether it's structured as a true lease or a loan. With a true lease, you deduct the payments themselves as rent expenses. With financing that's basically a loan, you own the equipment and deduct through depreciation or Section 179. My accountant had me review the contracts to determine which type I had - turns out mine was actually a loan despite being called a "lease," so I got to deduct the equipment value upfront with Section 179.

7 That's super helpful, thanks! I didn't realize the contracts might use confusing terminology like calling a loan a "lease." I'll make sure to have someone review the actual terms before signing. Did you find any significant difference in interest rates between traditional small business loans and equipment financing?

4 Exactly right! The principal isn't deductible (that's what you're getting the equipment deduction for), but the interest is absolutely a separate business expense. Good catch - lots of new business owners miss this one.

Totally agree with this. I almost made this mistake. I got all excited about deducting my $4,500 in car sales tax until my accountant pointed out that my total itemized deductions were only around $11,000, way less than the standard deduction. Would've been a bunch of paperwork for nothing!

I actually don't use the car for business, it's purely personal. But that's a really good point for other people in this thread who might have business use. I'm going to look into the sales tax deduction calculator that was mentioned above and see if it makes sense with my other potential deductions. Thanks everyone for all the helpful advice!