I'm in the same boat! Just realized my PayPal hit about $2500 from selling old furniture and electronics. Quick question - what tax software are people using that handles 1099-K from personal sales well? I tried using FreeTaxUSA last year and it kept treating all my sales as business income.

I was in a very similar situation last year and want to share what I learned from my tax preparer. The key thing to understand is that the 1099-K is just an information document - it tells the IRS that you received payments, but it doesn't automatically mean all of that money is taxable income. For personal items sold at a loss (which is most household goods), you'll want to: 1. Keep a simple spreadsheet listing each item sold, what you estimate you originally paid, and what you sold it for 2. Report the 1099-K income on Schedule 1, Line 8z "Other Income" 3. Then subtract your cost basis (what you originally paid) right below it as a negative adjustment The IRS knows that people don't keep receipts for personal purchases from years ago. They accept reasonable estimates based on what similar items would have cost when new. Just be honest and conservative in your estimates. For your situation where you received $2,700 but estimate you originally paid $8,000, you'd show the $2,700 as income and then subtract $8,000 as cost basis, resulting in no additional tax owed since you sold everything at a loss. The important thing is to address the 1099-K on your return rather than ignoring it, since the IRS has a copy too.

If ur doing this yourself, the actual calculation is pretty simple. The employer contribution is a business expense that reduces ur net income. So if ur in the 24% bracket, a $10k contribution saves u $2,400 in federal taxes plus whatever state tax u have. Just make sure u follow the limits - employer contribution can't exceed 25% of compensation for an S-corp. So with $62k salary, ur max employer contribution would be $15,500, plus ur employee contribution. Hopefully that helps!

This is exactly the kind of question I was wrestling with when I first elected S-corp status for my LLC! The key thing to understand is that employer contributions to your solo 401k are treated as a business deduction, which reduces your S-corp's net income before it flows through to your personal K-1. So in your case, that $10k employer contribution would reduce your business profit from $98k to $88k for tax purposes. This means you'll save taxes at your marginal rate on that $10k - so if you're in the 24% bracket, that's $2,400 in federal tax savings, plus any state tax savings. One thing to double-check: with your $62k salary, your maximum employer contribution would be 25% of that, which is $15,500. So your planned $10k contribution is well within limits. The employer contribution is definitely more tax-efficient than taking it as a distribution since it reduces your taxable income entirely, whereas a distribution would still be taxable income (though not subject to self-employment tax thanks to your S-corp election). I'd recommend running the numbers both ways - with and without the contribution - to see the exact impact on your tax situation. It's usually a no-brainer from a tax perspective!

This whole Mega Backdoor thing seems way too complicated. Wouldn't it be simpler to just max out your 401k and Roth IRA, then put the rest in a taxable account? I'm always suspicious of these "backdoor" strategies - feels like asking for an audit flag.

This is a great question that I struggled with too! The good news is that for Mega Backdoor Roth conversions of after-tax contributions, you can withdraw your original contribution amounts at any time without the 10% early withdrawal penalty. The penalty only applies to earnings on those contributions if withdrawn before age 59½. Here's why this works: Since you already paid taxes on the after-tax contributions going into your 401k, converting them to Roth doesn't create a taxable event. The IRS treats these converted contributions as "basis" that you can access penalty-free. However, make sure your 401k plan allows in-service distributions or in-plan Roth conversions - not all employers offer this flexibility. Also keep detailed records of your conversions and their dates, as you'll need this for tax reporting. Given your strong financial foundation (maxed HSA, 8-month emergency fund, low debt), the Mega Backdoor Roth strategy makes a lot of sense. The tax-free growth potential over time significantly outweighs keeping excess funds in a taxable account, especially since you maintain access to the contribution portion if needed.

Just wanted to add some reassurance here - you're definitely not in trouble! The distinction between rental income and cost-sharing is pretty clear in tax law, and your situation sounds like textbook cost-sharing. Since she's living there as her primary residence and you're just splitting actual expenses (not making profit), this isn't considered rental income. The fact that she's paying $1100 toward your $2350+ total housing costs shows you're not profiting - you're actually still covering more than half yourself. This is exactly what the IRS expects to see in legitimate roommate arrangements. For future peace of mind, you might want to keep some basic records showing the split of expenses (like rent receipts and maybe a simple text/email trail of her payments), but you definitely don't need to file any landlord paperwork or claim this as income. You're just two people sharing living expenses, which is completely normal and not taxable.

I went through almost exactly the same situation last year! My friend stayed on my couch for about 6 months and contributed $900 toward my $2200 rent. I was so worried about the tax implications that I actually consulted with a tax professional, and they confirmed what others are saying here - this is definitely cost-sharing, not rental income. The key thing that put me at ease was learning that the IRS looks at whether you're making a profit and whether the person is living there as their primary residence. Since your friend is paying less than half your total housing costs and is using your couch as her main living situation, you're clearly just splitting expenses rather than running a rental business. I kept simple records (just screenshots of her Venmo payments and copies of my rent receipts) but never had to report anything as income. The fact that you're still covering the majority of the costs yourself makes it pretty clear this isn't a profit-making rental arrangement. You should be totally fine!

Code 840 is definitely a good sign! It means your refund has been issued and is now in the payment pipeline. From my experience, direct deposits typically show up 2-4 business days after the 840 code appears on your transcript. If you're getting a paper check, expect 1-3 weeks for delivery. The key thing is that the IRS has finished processing and approved your refund - now it's just about the banking/mailing logistics. You're almost there! Keep checking your bank account daily if you have DD set up.

Code 840 is fantastic news - it means your refund has been issued! You're basically at the finish line now. For direct deposit, expect 2-5 business days from when that code appeared. Paper checks take longer (1-3 weeks). I went through this same anxiety last year constantly refreshing my transcript. The hardest part is over - the IRS has approved and released your money, now it's just waiting for the banking system to do its thing. Check your account in the mornings, that's when most deposits seem to hit! 🎉