Just want to add - KEEP GOOD RECORDS of everything! Create a simple spreadsheet tracking: - Exact dates/times you babysit - All payments received - Any expenses related to childcare - Portion of your home used for childcare - Photos of areas used for childcare - Receipts for anything you buy for childcare The IRS loves to audit self-employed people with cash businesses, and childcare is definitely on their radar. Good records are your best defense if you ever get questioned!

Great advice from everyone here! I'm a tax preparer and just wanted to add a few quick clarifications: 1. Yes, you absolutely need to report this income - the $400 threshold for self-employment tax applies to you. 2. For home deductions, you can use either the simplified method ($5 per square foot up to 300 sq ft) or actual expense method. Given that you're only babysitting part-time, the simplified method might be easier. 3. Document everything NOW - create that spreadsheet Oliver mentioned and go back through your Zelle history to reconstruct the dates/amounts. The IRS allows reasonable reconstruction of records. 4. Consider setting aside about 25-30% of future payments for taxes (income tax + self-employment tax). This will help avoid a surprise bill next year. Your sister doesn't need to do anything on her end since this is a personal expense for her, not a business deduction. You're handling this correctly by taking full responsibility for reporting the income yourself!

Eight days is completely normal! I went through the same anxiety last year when I filed on April 13th. Mine took 11 days to get accepted and I was refreshing the Where's My Refund page constantly thinking something was wrong. The key thing to remember is that "received" just means the IRS got your electronic filing, but "accepted" means they've actually started processing it and verified there are no obvious errors. During peak filing season (especially that last week before the deadline), they get absolutely slammed and everything takes longer. Since you filed through TurboTax electronically, you're in good shape. Paper returns can take months, but e-filed returns like yours typically get processed much faster once they're actually accepted. Just keep checking once a day - the system updates overnight so checking more often won't show anything new. If you hit the 21-day mark from acceptance (not from filing) with no refund, then you can start looking into it. But for now, you're right on track for normal processing times. Hang in there!

Don't stress too much! Eight days is definitely within the normal range, especially since you filed so close to the deadline when the IRS is processing millions of returns. I filed on April 11th this year and it took 10 days to get accepted, then my refund came exactly 7 days after that. The difference between "received" and "accepted" confused me too at first. "Received" just means the IRS got your electronic filing, but "accepted" means they've done their initial review and everything looks good to move forward. During peak season like this, that acceptance step can take anywhere from a few days to 2+ weeks. Since you used TurboTax and filed electronically, you're in much better shape than people who filed paper returns (those can take months). The IRS Where's My Refund tool only updates once per day overnight, so checking constantly won't show new info - learned that the hard way last year! If you want some peace of mind, you could check your tax transcript on the IRS website. It sometimes shows more detailed status info than the Where's My Refund tool. But honestly, I'd just give it another week or so before worrying. You're well within normal processing times.

One thing nobody's mentioned - distributions aren't subject to payroll taxes, but they ARE subject to income tax. The tax advantage of an S-corp comes from paying reasonable salary (subject to both income + payroll tax) and taking remaining profits as distributions (subject to only income tax). But you still need to pay yourself something as W-2 wages.

I've been running an S-corp for 5 years and went through this exact confusion early on. The bottom line is you absolutely cannot just pay the tax obligations without actually distributing salary to yourself - that's considered tax evasion by the IRS. Here's what I learned the hard way: "reasonable compensation" means you must receive actual W-2 wages for services performed, run through normal payroll with proper withholdings. The IRS specifically looks for S-corp owners trying to avoid payroll taxes by skipping salary altogether. My recommendation: determine a reasonable salary based on what you'd pay someone else to do your job, then take that as actual payroll. Everything above that reasonable amount can stay in the business as retained earnings or be distributed later. Don't try to game the system - the audit risk isn't worth it, and the penalties can be severe if they reclassify your distributions as wages subject to back payroll taxes plus interest.

This is exactly the kind of question that trips up so many business owners! The key difference is that S corps and C corps have opposite reasonable compensation concerns from the IRS perspective. With your S corp, you're absolutely right to be careful about maintaining adequate salary vs distributions. The IRS wants to see reasonable compensation because S corp distributions aren't subject to payroll taxes, so they're watching for owners who try to minimize salary to avoid Social Security and Medicare taxes. But here's where it gets interesting with C corps - the IRS actually worries about the opposite problem. Since C corp salaries are deductible at the corporate level (reducing corporate taxable income) while dividends face double taxation, the IRS is more concerned about unreasonably HIGH compensation in C corps. Owner-employees have an incentive to take excessive salaries to avoid the corporate tax, so that's what triggers IRS scrutiny. You technically could take minimal salary and maximum dividends from a C corp, but the double taxation on dividends usually makes this a poor strategy from a total tax perspective. Plus, if you're actively working in the business, the IRS still expects some reasonable compensation for your services - just like any other employee performing similar work would receive. The "reasonableness" test considers factors like your role, industry standards, time commitment, qualifications, and company performance - regardless of entity type.

One thing that often gets overlooked in this S corp vs C corp compensation discussion is the impact of your long-term business goals. If you're planning to reinvest profits back into the business for growth, a C corp structure might actually work better even with the double taxation concern. Here's why: With an S corp, all profits flow through to your personal return whether you take distributions or not - meaning you pay personal income tax on retained earnings. With a C corp, you only pay the 21% corporate rate on retained profits, which could be lower than your personal rate if you're in higher tax brackets. So while the reasonable compensation rules do flip between entity types (S corps worry about too little salary, C corps about too much), your decision should factor in your overall business strategy. If you're taking most profits out annually, S corp probably still wins. But if you're planning to keep significant profits in the business for expansion, equipment purchases, or building cash reserves, the C corp might be worth considering despite the compensation complexity. The reasonable compensation requirements exist in both structures - they just point in opposite directions based on the underlying tax incentives each entity type creates.

Don't panic! This is way more common than you think - I went through the exact same thing last year and it all worked out fine. First thing to do is check if your employer has an online portal (like ADP or Workday) where you can download your W-2 electronically. Most companies do this now and it's the fastest solution. If not, just call or email your HR/payroll department - they can usually get you a new copy within a day or two. I was stressing about this too but it turned out to be super straightforward. As a backup plan, you can always file Form 4852 (substitute W-2) using your last paystub from December, which should have all your year-to-date totals. The IRS is totally fine with this when you can't get your actual W-2. Also, pro tip for keeping track of important documents - I now scan everything important to Google Drive right when I get it. No more panic cleaning sessions ruining my taxes! You've got this!

Hey Eva! Take a deep breath - you're definitely not screwed and this is SO much more common than you think. I work in tax prep and we see this situation literally dozens of times every tax season. Here's your game plan: 1. Check if your employer has an online employee portal (ADP, Paychex, Workday, etc.) - you might be able to download your W-2 right now! 2. If not, contact your HR/payroll department ASAP. Most can email or print a new copy within 24-48 hours. 3. If your employer is unresponsive, you can request a wage transcript from the IRS by calling 1-800-908-9946 (this line is specifically for wage transcripts and usually has shorter wait times than the main number). And honestly? Your "disaster zone apartment" comment made me laugh because I literally did the exact same thing two years ago - lost my W-2 in a pre-visit cleaning frenzy for my parents. You're in good company! The most important thing is don't wait - start with option 1 or 2 today. You have plenty of time before the filing deadline, and this will be resolved way faster than you think. Adult life is mostly just figuring out systems to prevent exactly this kind of panic (speaking from experience 😅).