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I think everyone's overcomplicating this. If it's just $1300, why not just report it on your taxes and then have your partners give you the money for whatever tax you had to pay on their portions? Seems like setting up a whole partnership with K-1s and everything is overkill for such a small amount.
That works until the IRS comes asking why you're receiving money from your partners that isn't being reported as income. Cash transfers between individuals over a certain amount get flagged. Plus OP mentioned this could grow to $200k territory - definitely not something you want to handle informally at that point.
Good point about the potential growth. I was just thinking about the current amount. You're right that once you start moving larger sums of money between individuals, the IRS starts to take notice. I still think for the current small amount, informal handling might be fine, but you're absolutely right that they should establish proper structures now if they're anticipating growth to $200K. Setting things up correctly from the beginning is much easier than trying to correct issues later, especially with the IRS involved.
The real question here is why your partners are trying to push their tax liability onto you. It sounds fishy to me. Even if they've "issued too many W-9s" (which isn't really a thing - businesses issue as many as needed), that doesn't mean they can just arbitrarily decide you should bear the tax burden for the partnership. I'd be questioning their motives here. Are they trying to keep income off their tax returns for some reason? Do they have tax liens that would cause additional scrutiny? This feels like a red flag to me.
One option nobody has mentioned yet is filing Form 8919, "Uncollected Social Security and Medicare Tax on Wages." You'd use code G or H which covers cases where you should've been classified as an employee. This way you're still paying your portion of Social Security/Medicare but not the employer half that gets added with self-employment tax. The downside is you need to file Form SS-8 simultaneously, and this might cause issues with the employer who sent the 1099. But if the amount is significant enough, it might be worth considering.
Would filing Form 8919 cause problems for future tax returns if the SS-8 determination takes a long time? I've heard those can take 6+ months to process. Also, since we have literally zero documentation (no emails, texts, or anything in writing about employment), would this approach even work?
Filing Form 8919 won't directly cause problems for future returns, but if the SS-8 determination eventually comes back not in your favor, you might need to file an amended return and pay the additional self-employment tax plus potential interest. It's a bit of a gamble. With zero documentation, your case for employee classification is definitely weaker. The SS-8 form asks about specific factors like who controlled the work schedule, provided tools/equipment, determined how the work was done, etc. If the answers to these questions indicate contractor status, or if you can't provide any supporting evidence, the determination might not go your way. For only $2,100, the Schedule C route might be simpler unless you have strong verbal evidence of employee status.
Has anyone considered that filing Schedule C might actually be BETTER in this situation? Yes, you pay self-employment tax, but you can also deduct business expenses you couldn't take as an employee. Did your fiancé use his own car? Home internet? Phone? Computer? Tools? Those could all be partial deductions. When I was in a similar situation, I actually came out ahead by claiming mileage, home office, and equipment costs.
This is absolutely true! I was misclassified last year and after adding up all my legitimate expenses (mileage, portion of phone bill, home office, supplies), I actually ended up with less tax liability than if I'd been properly classified as an employee. Just make sure you have documentation for everything in case of an audit.
Everybody's giving great advice here but I just want to emphasize DO NOT SEND CASH in the mail!!! I made that mistake years ago and it never arrived. Write a check or get a money order. And definitely make a photocopy of EVERYTHING before you send it - your completed forms, your check, everything. That way if anything gets lost, you have proof you tried to file. And use certified mail with tracking so you have proof of when you sent it and when the IRS received it.
Should I write my SSN on the check? I heard that's what you're supposed to do but it feels weird writing my full social on something going through the mail.
Yes, you should write your SSN on the check - but only the last four digits for security. Also include the tax year (2022) and write "Form 1040" on the memo line. This helps the IRS properly apply your payment if it gets separated from your return. Writing this info on the check is actually a security measure to ensure your payment gets credited to the right account, so don't skip this step even though it seems counterintuitive.
Late to this thread but I work at a tax firm and have some insights. For anyone filing super late returns (like 2022 in 2025), here's what you need to know: 1) Yes, always include payment with your return if you owe 2) Make the check out to "United States Treasury" (not "IRS") 3) On the check: write tax year, last 4 of SSN, and "Form 1040" 4) Send it CERTIFIED MAIL with tracking 5) Keep copies of everything 6) Different states have different mailing addresses - check IRS.gov or your tax software for the right one For tiny amounts like $14, honestly, the penalties will be minimal - maybe another $10-15 total. The IRS might even decide it's not worth the paperwork to bill you for such a small penalty amount, but don't count on that.
Thanks for this detailed breakdown! This helps a ton. I'll definitely send it certified with tracking. Do you think I should wait for them to bill me for the penalties or should I call them after sending the return to see what the total is?
Just wait for them to bill you for the penalties. There's no need to call them proactively - it'll just waste your time with their long hold times. They'll automatically send you a notice with any additional amount due, and you'll have time to pay it. If you don't receive anything within 3-4 months after sending your return, then you might want to call to confirm everything was processed correctly. But most likely, you'll either get a small bill for penalties or nothing at all if they decide the amount is too small to pursue.
4 Something nobody's mentioned yet - if you're considering donating more than the standard deduction amount, look into donating appreciated assets (like stocks) instead of cash. If you've held the asset for more than a year, you can deduct the full fair market value AND avoid capital gains tax on the appreciation. For example, let's say you bought stock for $10k that's now worth $20k. If you sell it and donate the cash, you pay capital gains tax on the $10k gain. But if you donate the stock directly to the charity, you get a $20k deduction and pay no capital gains tax. It's like getting an extra tax benefit on top of the deduction.
1 This is really good to know - we have some Tesla stock that's up quite a bit. Do all charities accept stock donations though? And is it complicated to do?
4 Not all charities can accept stock directly, but many of the larger ones do. For smaller charities, you can use a donor-advised fund (like at Fidelity, Schwab, or Vanguard) as an intermediary - you donate the stock to the fund (getting your tax deduction immediately) and then grant the cash to any charity later. The process isn't too complicated. If donating directly to a charity, you'll need to get their brokerage information and fill out a transfer form with your broker. For a donor-advised fund, you just open an account and follow their transfer instructions. The whole process usually takes less than a week. Just be sure to complete it well before the end of the tax year - I'd recommend finishing any stock transfers by early December to be safe.
16 Random but important tip - if you're going to donate enough to itemize, make sure to track ALL your charitable giving, even small stuff. Save receipts for donations to Goodwill/Salvation Army, track mileage when volunteering (it's deductible!), and even small cash donations at church or to fundraisers. It all adds up! And if you're donating property worth over $250, you need a written acknowledgment from the charity. For items over $5,000, you typically need a qualified appraisal too. These rules are super strict and the IRS doesn't mess around with documentation for charitable deductions.
Miguel Hernández
I switched from TurboTax to a local CPA three years ago and my refund increased by about $1,900. Why? Because I had NO IDEA about several deductions I qualified for: 1. I was taking standard deduction but should've been itemizing due to mortgage interest and property taxes 2. I had medical expenses that exceeded the threshold for deduction 3. I had been missing some education credits for my part-time masters program 4. Some of my charitable donations weren't being properly documented The software can only work with what you tell it. If you don't know what questions to ask or what info to enter, you'll miss stuff. A good accountant asks questions you wouldn't think of.
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Sasha Ivanov
•How much did the CPA charge compared to TurboTax? Was it still worth it after paying their fee?
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Miguel Hernández
•The CPA charged me $350 while TurboTax Premium had been costing around $120. So yes, even after paying the higher fee, I was still ahead by roughly $1,670 that first year. The other benefit is that my CPA now keeps all my records from year to year, knows my situation, and proactively contacts me about tax law changes that might affect me. For example, he reached out last fall to suggest some year-end moves that saved me even more. That kind of personalized advice just doesn't happen with software.
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Liam Murphy
I'm a tax preparer (not an accountant but I work for one of the big tax prep companies) and I see this ALL THE TIME. The difference between self-prepared returns and professional preparation isn't because the math is different - it's because we know what questions to ask. Just last week I had a client who'd been using online software for years. She mentioned offhand that she drives her elderly mom to doctor appointments regularly. Turns out she qualified as her mom's caretaker for tax purposes and was eligible for dependent care credits she'd been missing for YEARS. Found her over $3,200 in additional refund just from that one conversation.
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Mei-Ling Chen
•That's really eye opening! I think I'll at least consult with a professional this year to see what I might be missing. My situation isn't super complicated but I do have some student loan interest and did some freelance work last year, so maybe there's stuff I don't know about. Thanks for sharing your perspective!
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