That letter is definitely concerning and points to an identity verification issue on your account. When the IRS can't process your transcript request and specifically directs you to the Identity Theft hotline (800-908-4490), it usually means their fraud detection system has flagged something that requires manual verification - not necessarily actual identity theft, but extra steps needed to confirm your identity. After waiting 9 months, this letter actually gives you a clear path forward! I'd call that number first thing tomorrow morning - they'll be able to tell you exactly what documentation you need to resolve the hold and get your refund processed. Don't delay on this because identity verification cases can drag on for months if not addressed quickly. Before calling, you might want to try taxr.ai to analyze your transcript if you can access it. It breaks down all those cryptic codes in plain English and will help you understand what's actually happening with your return, making your conversation with the IRS much more productive. A lot of folks here have found it super helpful for these exact situations. This is definitely frustrating but completely fixable once you provide whatever verification they need. Your refund should start moving again after that. Good luck! 🤞

That letter is definitely pointing to an identity verification hold - when the IRS can't process your transcript request and specifically mentions the Identity Theft hotline, it's usually their fraud detection system flagging something that needs manual review. Not necessarily actual identity theft, just extra verification steps. After 9 months of waiting, you finally have a clear next step! Call 800-908-4490 ASAP - they'll tell you exactly what documents you need to verify your identity and get things moving again. These cases can take forever if you don't address them quickly. Before calling, I'd suggest trying taxr.ai to decode your transcript if you can access it. It breaks down all those confusing codes in plain English so you'll know what's actually happening before you talk to the IRS rep. Makes those phone calls way more productive. Don't panic - identity verification issues are super common and totally fixable once you provide whatever they need. Your refund should start processing again after that. Hang in there! 💪

I went through this exact same process with Charles Schwab about 6 months ago as a UK resident. The confusion around Article 13 is really common because most people expect to see a percentage rate, but for capital gains, UK residents actually get 0% withholding under the treaty. Here's what I learned: Article 13 covers capital gains, and under the US-UK tax treaty, these gains are only taxable in your country of residence (UK), not in the US. So you literally write "0%" in the treaty rate field. It feels wrong when you're filling it out, but that's the correct answer. The other thing that tripped me up initially was understanding that if you plan to receive dividends, you'd also need to reference Article 10, which typically gives you a 15% rate instead of the standard 30% non-treaty rate. Charles Schwab's customer service can help verify this if you're still unsure, but based on my experience and what others have confirmed here, 0% for Article 13 capital gains is definitely correct for UK residents. The form was accepted without any issues when I submitted it.

I just went through this exact same process with Charles Schwab last month as a UK resident, and I can confirm what everyone else is saying about Article 13. The correct rate to enter is indeed 0% for capital gains. What helped me understand this was realizing that the US-UK tax treaty essentially says "capital gains from US investments are only taxed in your country of residence (the UK), not in the US." So when the form asks for the treaty rate, you're telling them the US withholding rate is zero percent. I was initially confused because most tax forms involve entering positive percentages, but in this case, 0% is the actual treaty benefit you're claiming. My form was processed and accepted by Charles Schwab within about 3-4 business days. One practical tip: if you're planning to invest in dividend-paying stocks as well, make sure you understand Article 10 for dividend withholding (typically 15% for UK residents). You might need to claim benefits under both articles depending on your investment strategy. The key is being confident that as a legitimate UK tax resident, you're absolutely entitled to these treaty benefits. Don't let the unusual 0% rate make you second-guess yourself!

One thing that might help clarify this for everyone - the IRS has actually published guidance specifically about payment apps in Publication 525. The key distinction they make is between "personal payments" and "payment for goods and services." Personal payments include: - Splitting a dinner bill - Paying your share of rent to a roommate - Reimbursing someone for concert tickets - Birthday gifts or holiday money - Loan repayments between friends/family These are NOT taxable income to the recipient, regardless of amount or frequency. Business payments include: - Selling items (even personal items for profit) - Freelance work payments - Service payments (babysitting, tutoring, etc.) - Any payment where you're providing goods/services The $600 reporting threshold only applies to business payments. For personal payments, there's no reporting requirement at any amount level. The confusion often comes from people mixing these two categories or not understanding that selling your old stuff online counts as business income if you sell it for more than you paid.

Just wanted to add something that helped me understand this better - the IRS actually doesn't track your Zelle or Venmo transactions unless they're reported by the payment app companies. And those companies only report business transactions over $600 with 1099-K forms. For personal transfers like what you're describing (rent splitting, paying back friends, sharing expenses), the payment apps aren't required to report anything to the IRS regardless of the amounts. So not only do you not need to report these transfers, but the IRS isn't even getting information about them in the first place. The only time you'd need to think about reporting is if you start using these apps to receive payment for selling things or providing services. Your current usage sounds 100% personal, so you're all good!

Does anyone have a recommendation for a free tax filing service that handles 1099-NEC and Schedule C well? I'm in basically the same situation as OP with a small amount of freelance income.

Just wanted to jump in as someone who went through this exact situation a couple years ago! You absolutely need to file because of the self-employment rules everyone mentioned - that $400 threshold is the key thing here, not the regular filing requirement. One thing I wish someone had told me when I was in your shoes: keep really good records of ANY expenses related to your design work. Software subscriptions, computer equipment, even a portion of your internet bill if you worked from home. These can all be legitimate business deductions that will reduce your self-employment tax. Also, don't stress too much about doing it "perfectly" on your first time filing. The IRS is actually pretty reasonable if you make an honest mistake and need to file an amended return later. The important thing is just getting it filed since you're over that $400 threshold. Good luck with your first tax return! It's not as scary as it seems once you get started.

This sounds really stressful, especially with medical bills coming up! The $1,400 adjustment is almost certainly related to the third Economic Impact Payment (stimulus) from March 2021. What likely happened is that you or your tax software accidentally claimed the Recovery Rebate Credit on line 30 of your Form 1040, even though you already received that payment. The IRS has gotten really good at automatically catching these duplicate claims. You should receive a CP12 notice in the mail within 2-3 weeks explaining exactly what they changed. For your immediate medical bills, definitely call your healthcare provider to ask about payment plans - most are very understanding about tax delays. If you're absolutely certain you never received that $1,400 payment, you can dispute it with proper documentation, but their records are usually accurate. Hang in there - this is a very common issue that gets resolved!

I'm so sorry you're going through this stress, especially with medical expenses looming! As a newcomer to this community, I've been reading through everyone's responses and they're all pointing to the same likely culprit - the Recovery Rebate Credit on line 30 of your tax return. The $1,400 amount is a dead giveaway that this relates to the third stimulus payment from March 2021. What probably happened is that you or your tax software accidentally claimed this credit even though you already received the actual payment. The IRS has really stepped up their game with automatic matching systems, so they catch these duplicate claims almost immediately now. You should definitely receive that CP12 notice everyone's mentioning within the next few weeks. For your immediate medical bill concern, I'd echo what others have said about contacting your healthcare provider - they're usually very accommodating with payment plans when there are tax refund delays. If you're absolutely certain you never got that third $1,400 payment, you can dispute it, but you'll need solid proof. This community seems incredibly knowledgeable and supportive, so you're in good hands here!