Wouldn't that mess up all your existing categorizations and receipt attachments? I have about 300+ transactions with receipts carefully attached and categorized for tax purposes. Starting over sounds terrifying.

You're right to be concerned about losing attachments. The export/import method works best if you haven't attached many receipts yet. In your case with 300+ transactions with attachments, I'd definitely go with the selective deletion approach instead. If you do need to delete transactions one by one, a time-saving tip is to open two browser windows side by side - one showing your bank's actual transactions and the other showing your QuickBooks register. This makes it easier to quickly identify which entries are the duplicates as you go through them.

This is brilliant! I just checked my audit log and can clearly see which transactions I entered manually vs which came through the bank feed. This will make cleanup so much faster. Does anyone know if there's a way to filter the audit log to only show transaction creations?

This explanation is super helpful, much clearer than what I was finding online! One more question - does this affect how I should be handling my home office deduction? I use a corner of my living room exclusively for these calls. Is that something I can still claim even though the hours are minimal?

For the home office deduction, the key requirement is regular and exclusive use of the space for business. If you're only using that corner of your living room for business calls and nothing else, you can claim it. However, the "regular use" part might be challenging if you only do 1-2 calls per month. The IRS doesn't define exactly how many hours constitute "regular" use, but sporadic use might be questioned. If you use the simplified method ($5 per square foot up to 300 sq ft), it's less likely to trigger scrutiny than claiming actual expenses for such minimal use.

That's because TurboTax is correctly following the IRS forms. Before 2020, non-employee compensation was reported in Box 7 of 1099-MISC and required Schedule C. Other types of payments on 1099-MISC (like prizes or awards) might go on "other income" line. Starting in 2020, the IRS moved non-employee compensation to the separate 1099-NEC form specifically to make this distinction clearer. If you received a 1099-NEC, that's definitely Schedule C business income that requires reporting as self-employment income, not "other income.

Thank you for mentioning this! I've actually had my Roth since 2018, so it's been over 5 years. And I've never done any conversions - all of my contributions were direct to the Roth IRA. Based on what everyone is saying, it really sounds like Fidelity just coded the 1099-R incorrectly. I'll contact them tomorrow to request a corrected form with the right distribution code. In the meantime, I'll fill out Form 8606 Part III to document that these were contribution withdrawals and therefore not taxable. This has been super helpful!

Glad to hear your account meets the 5-year requirement! That definitely makes things simpler. When you call Fidelity, specifically ask them to issue a corrected 1099-R with distribution code J in Box 7, which indicates an early distribution from a Roth IRA with no known exception. This is the correct code for withdrawal of contributions. Even if they take a while to issue the correction, go ahead and file with Form 8606 as you mentioned. If the IRS questions it, you'll have documentation showing these were return of contributions. Good luck!

Is there any penalty to the financial institution for issuing incorrect 1099s? Seems like they should be more careful since this directly impacts people's taxes!

There's no direct penalty to financial institutions for most 1099 errors unless they're systemic or intentional. The IRS recognizes that mistakes happen, which is why there's a process for issuing corrected forms. However, firms can face penalties for late filing or intentional misreporting. The bigger issue is that most large institutions use automated systems to generate these forms, and special situations like Roth contribution withdrawals often require manual intervention to code correctly. While annoying for customers, it's generally viewed as an administrative error rather than something that would trigger penalties.

This is a really important distinction. I work in tax accounting and the treatment of rewards programs varies widely. The key question is whether these Tesla rewards are considered rebates/discounts on purchases (generally not taxable) or income for services/activities (generally taxable).

I've found TaxAct to be better than TurboTax for these kinds of situations. They have a better "what-if" analyzer that lets you test different scenarios to see how they impact your AGI. But honestly, for complex situations like trying to retroactively reduce AGI with specific targets in mind, software alone isn't enough - you really need a tax pro who understands all the available options.

Thanks so much for sharing your experience! Have you ever had any issues with state filing through FreeTaxUSA? I've heard their federal is great but some people complained about the state portion.

I've done both federal and state with FreeTaxUSA with no issues at all. The state portion isn't free like the federal filing, but it's still way cheaper than TurboTax - I think I paid about $15 for state filing last year. The state section works exactly the same way as the federal part - straightforward questions and it imports all your relevant info from the federal return automatically. I'm in California which has some complex state tax rules, and it handled everything correctly. The software even flagged when I qualified for a specific state credit I didn't know about.

This is what I keep telling my friend! She made like $700 on Etsy last year and is freaking out about getting audited. It's just not worth the IRS's time to go after such small amounts unless you're doing something really weird with your deductions.