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Anyone know if you should be making quarterly estimated tax payments on donation income? I just started doing this and don't want to get hit with penalties.
Great question! Since you're getting a 1099, you're absolutely right that this is treated as self-employment income. Here's what you need to know: **Yes, you can deduct mileage!** Use the business mileage rate (65.5 cents/mile for 2025), not medical. With your 50 miles round trip twice weekly, that's about 5,200 miles annually - roughly $3,406 in deductions. **File on Schedule C** - Report your donor income and expenses here. You'll also need to pay self-employment tax (15.3%) on your net profit after deductions. **Keep detailed records** - Your mileage log with dates, odometer readings, and trip purposes is perfect. Also save receipts for any other business expenses. **Consider quarterly payments** - Since no taxes are withheld, you may need to make estimated quarterly payments to avoid penalties if you'll owe more than $1,000. The math works in your favor: $7,800 annual income minus $3,406 mileage deduction = $4,394 net income subject to self-employment tax. Much better than paying tax on the full amount! You're doing everything right by keeping good records. This is a legitimate business expense that many people in similar situations can take advantage of.
This is super helpful! I'm new to all this tax stuff and was getting overwhelmed by all the different advice out there. Your breakdown makes it much clearer. Quick question - when you calculate the $4,394 net income, would that be what I pay self-employment tax on? And then I'd also pay regular income tax on that same amount? Just want to make sure I understand the full tax impact before I get in too deep with this donation thing.
Filed my 2023 taxes back in February and still nothing. Looking at my transcript and seeing codes 571 and 290 but no direct deposit date. Already verified my identity through id.me months ago. Starting to lose my mind checking WMR every day. Anyone else dealing with this or know what these codes mean? I just received a Letter ID L0012865649 from Indiana Department of Revenue dated January 14, 2025 with a Form 1099-G. It shows: Recipient's Identification Number Box 2: State or local income tax refunds : $1106 Box 3: Refund is for tax year : 2023 State of Indiana FID : 356000158 Year of Issuance : 2024 The letter says "If you itemized deductions on your federal income tax return and claimed a deduction for state and local income taxes paid, you may need to report some or all of the amount shown in Box 2 to the IRS. Additionally, any of this refund amount reported as income on your federal income tax return should be deducted from your income on your Indiana tax return." It also mentions I can visit https://www.in.gov/dor/individual-income-taxes/form-1099-8 for FAQs or use Indiana's new e-services portal called INTIME (Indiana Taxpayer Information Management Engine) to view my individual tax account and message them with questions. But I'm confused because I'm still waiting on my federal refund from 2023! I filed in February, verified through id.me months ago, and keep seeing these 571 and 290 codes on my transcript with no DDD. Does this 1099-G from Indiana have anything to do with my federal refund delay? Is anyone else experiencing these long delays with the same transcript codes? I check WMR obsessively and it's driving me crazy.
Ugh I feel your pain! Been waiting since March 2023 myself with similar codes. That 1099-G from Indiana is totally separate from your federal refund - it's just saying you got a state refund in 2024 for your 2023 taxes, which you might need to report as income on your 2024 federal return if you itemized deductions. It has nothing to do with your federal refund delay. The 571/290 codes are actually good signs though - means they released a hold and made an adjustment. You should hopefully see movement soon! π€
Thanks for explaining that about the 1099-G! I was so confused thinking it was connected to my federal delay somehow. Good to know the codes are actually positive signs - gives me some hope after almost a year of waiting! π
I totally feel your frustration! Been in a similar situation myself. Those codes 571 and 290 are actually good signs - the 571 means they released a previous hold on your account, and 290 indicates they made some kind of adjustment to your return. This usually means your refund is in the final stages of processing. Regarding the Indiana 1099-G, that's completely separate from your federal refund delay. Since you received a state refund in 2024 for your 2023 taxes, Indiana is required to send you this form. If you itemized deductions on your 2023 federal return and claimed state tax payments, you might need to report some of that $1106 refund as income on your 2024 federal return (the one you'll file this year). The federal delay with those codes typically resolves within 2-4 weeks, so hopefully you'll see that 846 refund code with a DDD soon! Keep checking your transcript rather than WMR - it's more accurate. Hang in there! πͺ
Whatever u do DONT IGNORE IT! Thats the worst thing u can do frfr. Stay on top of it and youll be fine
Had a similar CP75 audit situation last year - they definitely won't take your wages right away. The IRS has to go through a whole process before garnishment. First they'll send more notices, then offer payment plans. If you do owe the $9,193, they'll likely offset your 2024 refund first before considering wage garnishment. The key is responding to the audit with all your documentation - school records for your kids, proof they lived with you, income verification, etc. Don't let the scary language freak you out too much, just gather your paperwork and respond within 30 days. You got this! πͺ
I encountered this exact same situation! TurboTax is really buggy with amended returns. When I e-filed mine through TT, it also gave me a 1040-V even though I was due a refund of about $340. I ignored it completely and still got my refund (though it took almost 4 months to arrive).
4 months?! Omg that's insane. Did you ever call to check on it or did you just wait it out?
I'm dealing with this exact same issue right now! Filed my amended return last week and got that confusing 1040-V message even though I'm expecting a refund of around $450. It's so frustrating when the software gives you contradictory information. Reading through all these responses has been super helpful - sounds like this is a common TurboTax glitch and I can safely ignore the payment voucher request since my 1040-X clearly shows a refund amount on line 20. Thanks everyone for sharing your experiences! It's reassuring to know I'm not the only one who's encountered this confusing situation. Now I just need to be patient and wait for the processing... though hearing it can take 4+ months is pretty discouraging!
I went through this exact same frustrating experience! The good news is that you're absolutely right to ignore the 1040-V - it's definitely a TurboTax glitch that happens way more often than it should. Since your 1040-X shows a refund on line 20, you're all set. Just a heads up though - while 4+ months sounds terrible, it really varies. Mine took about 18 weeks, but I've seen people get theirs in 12-14 weeks too. The IRS has been pretty backed up with amended returns, so patience is key. You can check the status using their "Where's My Amended Return" tool online after about 3 weeks from when you filed. Hang in there - your refund will come! The waiting is definitely the worst part of this whole process.
Hiroshi Nakamura
Anyone have recommendations for legit tax software that has good fraud protection built in? I used to use an accountant but trying to save money this year. Worried about accidentally falling for one of these tax scams the IRS warns about.
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Isabella Costa
β’I've had good experiences with TaxSlayer. It has built-in error checking and will flag unusual entries that might trigger IRS scrutiny. It's not as expensive as some of the bigger names but still has good security features. Whatever you choose, just make sure it's on the IRS Free File Alliance list so you know it's legitimate!
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Malik Jenkins
β’I'd actually recommend going against the software route if you're specifically worried about scams. Find a local enrolled agent who charges a reasonable fee. My EA costs $200 for a basic return which isn't much more than the premium versions of tax software once you add state filing, and she catches things software would miss.
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Amara Oluwaseyi
Thanks for sharing this - I had no idea the IRS published an annual "Dirty Dozen" list! Just looked it up and wow, there are so many scams I wouldn't have thought to watch out for. The fake charity scams especially caught my attention since we're always getting donation requests. One thing that really stood out to me was the warning about preparers who won't provide you with a copy of your return or refuse to sign it. That seems like such an obvious red flag now but I probably wouldn't have thought twice about it before reading this thread. For anyone looking, the IRS website has a really helpful section called "How to Choose a Tax Return Preparer" that walks through all the credentials to look for. They recommend starting with the IRS Directory of Federal Tax Return Preparers to find qualified professionals in your area. Definitely bookmarking that for next year!
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