This is a fascinating discussion! I've been following professional poker for years as a hobby, and the tax implications have always intrigued me. One thing I'm curious about - for those who have successfully filed as businesses, how do you handle the psychological/emotional aspect that the IRS sometimes considers? I've read that they look at whether you derive personal pleasure from the activity as a factor in the business vs. hobby determination. It seems like with gambling, there's always going to be some element of enjoyment involved, even if you're approaching it systematically. How do you document that your primary motive is profit rather than recreation? Do you need to somehow prove you don't enjoy what you're doing, or is it more about demonstrating that profit is the dominant motive despite any incidental enjoyment? Also, has anyone dealt with the question of how "games of chance" vs "games of skill" affects the business classification? I imagine poker has a stronger case than something like slot machines, but I'm wondering if the IRS makes those distinctions when evaluating these cases.

The distinction between games of skill vs. chance is absolutely crucial for your case! As someone who's helped several poker players navigate this exact situation, I can tell you that poker and sports betting with systematic analysis have much stronger legal precedent than pure games of chance. The landmark case Groetzinger v. Commissioner established that gambling CAN qualify as a trade or business, and subsequent court cases have generally been more favorable to skill-based games. For poker specifically, courts have recognized that consistent long-term profitability demonstrates skill rather than luck. Your situation sounds very promising for business classification - 30-40 hours/week, detailed records, consistent profit over 3 years, and treating it as your primary income source all check the right boxes. The fact that you're doing both poker (clearly skill-based) and systematic sports betting (analytical approach) rather than purely chance-based games strengthens your position significantly. One practical tip: document not just WHAT you're doing, but WHY you're making specific decisions. Keep notes on your thought process, strategy adjustments based on results, and continuous learning efforts. This helps demonstrate the skill element and business-like approach that distinguishes you from recreational gamblers. Given your profit level ($68K) and time commitment, the self-employment tax hit might still be worth it for the expanded deduction opportunities, but definitely run the numbers both ways before deciding.

One thing nobody's mentioned yet - you should really clarify if you're truly an independent contractor (1099 worker) or if you should be classified as an employee (W-2). Based on what you described, it sounds like you're working regular hours for one company. The IRS has specific criteria for who can be classified as a 1099 worker vs. an employee. Many employers incorrectly classify workers as contractors to avoid paying employment taxes. If you're misclassified, you're paying extra taxes that your employer should be covering. You might want to look at the IRS guidelines on worker classification and see if your situation fits.

Hey Caleb! You're absolutely right to be concerned about this. I went through something similar when I was freelancing and getting paid through various apps. First thing - definitely keep ALL those Zelle screenshots and bank records. Print them out and keep digital copies too. When your 1099 arrives in January, compare it line by line with your own records immediately. One tip that saved me: create a simple spreadsheet now with the date, amount, and Zelle transaction ID for every payment you've received. This makes it super easy to spot discrepancies when the 1099 comes. If there is a mistake on the 1099, don't panic! Your employer can issue a corrected form (1099-C) to fix it. Most small business owners will work with you on this - they don't want IRS problems either. And honestly, the fact that you're only 22 and already thinking about this stuff puts you way ahead of most people your age. You've got good instincts here. Just stay organized with your records and you'll be fine even if there are bumps along the way. The payment method (Zelle vs direct deposit) doesn't really matter for tax purposes - what matters is accurate reporting of the amounts. You're doing the right thing by keeping track of everything!

For anyone still confused about Box 10 on W-2, here's a super simplified explanation: Your employer takes money from your paycheck BEFORE taxes (so you don't pay tax on that money at that time) and puts it in a special account for dependent care expenses. When tax time comes, the government says "hey remember that money you didn't pay taxes on? We need to account for it." It's not that you're paying extra taxes - you're just "settling up" on money that wasn't taxed during the year. The BENEFIT is that if you have other child care expenses beyond the $5000, you might qualify for additional tax credits. So you get the $5000 tax-free PLUS potentially more tax benefits for additional expenses.

I went through this exact same frustration last year! The key thing that helped me understand it was realizing that Box 10 isn't showing money your employer paid FOR you - it's showing money YOU earned that was set aside pre-tax for dependent care. Think of it this way: Let's say you earned $50,000 total, but $5,000 went to your Dependent Care FSA before taxes. Your taxable wages (Box 1) would show $45,000, and Box 10 would show the $5,000 that was excluded from taxation. When you file your taxes, the IRS needs to "remember" that $5,000 existed but wasn't taxed. The increase you're seeing in your tax software isn't a penalty - it's just calculating what you WOULD have owed on that money if it had been regular wages. The benefit is real though! If you're in the 22% tax bracket, you saved about $1,100 in federal taxes alone ($5,000 x 0.22), plus you avoided Social Security and Medicare taxes on that amount (another $382.50). So your total tax savings was around $1,482.50 throughout the year via smaller tax withholdings from each paycheck.

Just wanted to share my experience as someone who went through this exact situation last year! At 17, I was making similar amounts selling vintage finds on multiple platforms and felt completely overwhelmed by the tax side. A few things that really helped me: 1. **Complete your sole trader registration ASAP** - You can do this online through HMRC's website. It's actually quite straightforward once you start, and you don't need a fancy business name (you can just use your own name). 2. **Set up a simple spreadsheet** - Track every sale, every expense, and keep photos of receipts on your phone. I wish I'd done this from day one instead of trying to reconstruct everything later! 3. **Put aside 20-30% of your profits** - Open a separate savings account and transfer a portion of each sale into it. This way you won't be hit with a massive tax bill you can't afford. 4. **Consider getting help with your first Self Assessment** - Whether that's through one of the tools others mentioned, or even just having an accountant review it before you submit. The peace of mind is worth it. The key thing is not to panic - HMRC actually has pretty good resources for young entrepreneurs, and making £6k from reselling at 16 is genuinely impressive! You're already being responsible by asking these questions early.

As someone who's helped quite a few young sellers navigate this exact situation, I'd strongly recommend getting your sole trader registration completed as soon as possible. Since you already have a UTR, you're halfway there - you just need to finish the online registration process on the HMRC website. A few key points that might help: **On timing**: The sooner you complete your registration, the better. You technically have until October 5th following the end of the tax year to register (so October 2025 for income earned in the current tax year), but there's no benefit to waiting. **On record keeping**: Start documenting everything now if you haven't already. Every sale, every expense (packaging, postage, travel to post items, etc.), and keep digital copies of receipts. This will make your Self Assessment much easier when the time comes. **On business expenses**: Don't forget you can claim legitimate business expenses against your income. This includes things like packaging materials, postage costs, a reasonable portion of your internet/phone bills used for business, and even travel costs to post items. The fact that you're being proactive about this at 16 shows great business sense! Many people your age (and older) ignore the tax side until it becomes a problem. You're definitely on the right track.

I'm going through this exact same situation right now! Been 2.5 weeks since the IRS said they mailed my refund check and it hasn't shown up on Informed Delivery once. Reading through all these comments is so reassuring - I had no idea that Treasury checks don't reliably show up in the imaging system! I've been checking my email every morning and getting more anxious each day when nothing appears. It's really helpful to know that those plain white envelopes are so generic looking too - I probably would have overlooked mine if I hadn't read this thread. Going to stop obsessing over Informed Delivery and just keep checking my physical mailbox patiently. Thanks everyone for sharing your experiences - this community is a lifesaver when you're dealing with tax anxiety! 💙

I'm new to this community but had to jump in because I'm dealing with this exact same anxiety! Been waiting 3 weeks since my refund was supposedly mailed and checking Informed Delivery obsessively every single day. Reading through everyone's experiences here has been such a huge relief - I had no idea that IRS/Treasury checks are so unreliable on the imaging system! It makes total sense now why so many people have different experiences with seeing their checks in the daily digest. The part about those plain white envelopes looking like boring government mail really hit home - I've definitely been eyeing some suspicious looking mail lately wondering if I should open everything just in case. Going to check that "Where's My Refund" tool everyone mentioned and try to stop torturing myself with Informed Delivery. This community is amazing for tax-related stress - so grateful to find people who understand exactly what this anxiety feels like! 🙏