Thanks for this info! Just to clarify, my total from all the trial work was about $540 for the year. Does that mean I definitely have to pay the self-employment tax? And is Schedule C-EZ still available? I thought I read somewhere that the IRS discontinued it a few years ago.

Since your total is over $400, you would need to pay self-employment tax on that $540. It's 15.3% which comes out to about $82.62 in additional tax. You're right about Schedule C-EZ - I apologize for the confusion. The IRS did discontinue it after 2019. You'll need to use the regular Schedule C, but with such a straightforward situation and minimal income, it shouldn't be too complicated. Just list each payment as income and any legitimate expenses you had related to earning that income.

Technically you're supposed to report all income regardless of the amount or whether you received a tax form. But realistically speaking, the IRS isn't likely to audit someone over $300. They typically focus on much larger discrepancies. That said, if you're ever audited for other reasons, they could discover this unreported income. Your call, but personally I report everything just to avoid potential headaches later.

Thanks for mentioning the VCSP program. I'll definitely look into that along with Schedule H. Would you recommend I also file the SS-8 form, or is that something my babysitter would need to do? And do I need to worry about state taxes too, or just federal?

The SS-8 form is typically filed when there's a dispute about worker classification. Since you both agree she's a household employee, you probably don't need to file it. It's more important to focus on the Schedule H and getting caught up on the employment taxes. Yes, you absolutely need to look into state taxes as well. Most states have their own version of unemployment taxes for household employers, and the thresholds can be different from federal requirements. Check with your state's employment department as soon as possible, as they may have separate filing requirements and potential penalties.

Would the Child and Dependent Care Credit still apply if the babysitter was watching my sister's kids at my house? I paid her but they weren't my dependents.

No, the Child and Dependent Care Credit only applies if you're paying for care for your own qualifying dependents (your children under 13 or disabled dependents/spouse). If you were paying for childcare for your sister's children and they aren't your dependents, you can't claim the credit. Your sister might be able to claim it though, if she can document that she reimbursed you for the childcare expenses and meets the other requirements for the credit.

Does Form 8275 work even when the e-file system is giving the specific rejection code about the Premium Tax Credit? I thought those automated rejections couldn't be overridden with explanation forms.

Yes, it can work depending on the specific rejection code. The Form 8275 creates a "soft override" for certain validation checks. It won't work for all rejection codes, but for Premium Tax Credit mismatches where there's a discrepancy between what the IRS thinks and your actual situation, it can be effective. The key is properly documenting your explanation with supporting details. In my case, we included my employer's EIN, coverage dates, and policy numbers to prove I had continuous employer coverage and never received PTC. If your tax software doesn't allow attaching Form 8275 to e-file, then mailing is still your best option.

100% this! My brother's return got "lost" last year and he had to deal with failure-to-file notices. Since he didn't have proof of mailing, it was a huge hassle. Certified mail is absolutely worth the extra $5.

My parents went the trust route and it was incredibly smooth when my dad passed. The shares transferred to my mom without liquidation or going through probate. The main advantage seemed to be that the trust provided clear instructions about everything, not just the investments. They did have to retitle all their accounts into the name of the trust though, which took some paperwork.

Thanks for sharing. Did your parents need to file separate tax returns for the trust while they were both alive? That's one thing I'm confused about - whether having a trust creates additional tax filing requirements or complications during my lifetime.

Thanks for mentioning this! I hadn't considered the refund delay. Do you know if there's any way to apply for the ITINs now, before tax season starts, so everything's ready when I file?

Yes, you can absolutely apply for ITINs before tax season! You'll need to submit the W-7 forms along with your federal tax return, but you can do this outside of tax season. You'll include a note explaining that you're applying for ITINs for the purpose of filing tax returns in the future. The advantage is that once the ITINs are assigned, you'll be able to file your 2025 tax return normally without delays in processing or receiving your refund. Given that ITIN processing is typically slower during peak tax season, applying now could save you significant waiting time.

Is there a directory or something where you can find certified acceptance agents in your area? I'm in a small town and not sure if we even have any nearby.