I'm dealing with the exact same situation right now. When I entered both 1099-Rs in FreeTaxUSA, it seemed to handle them correctly. The one with code H didn't add anything to my taxable income, but it still showed up in the tax forms. Has anyone used H&R Block software for this situation? Wondering if different tax programs handle these Roth distribution codes differently.

I went through something very similar last year and can confirm what others have said - you absolutely need to report both 1099-Rs even though one might be completely non-taxable. The code H form for your $12,000 transfer is straightforward - that's a direct rollover between Roth IRAs which isn't taxable but must still be reported. The form without a distribution code for your $8,500 home purchase withdrawal is also likely non-taxable since first-time home buyer distributions from Roth IRAs are penalty-free (though there are some nuances about contributions vs. earnings). One thing to double-check: make sure the amounts on your 1099-Rs match what you actually received. I had an issue where my old broker issued a 1099-R for the gross amount transferred, but my new broker also issued one, creating a discrepancy I had to sort out. Most tax software will handle these correctly if you enter them exactly as shown on the forms, including all the codes. The key is being accurate with the distribution codes in Box 7 - that's what tells the IRS (and your tax software) how to treat each distribution.

Just to add another perspective here - I ran into this exact same issue with my SMLLC last year and ended up getting audited partly because I was inconsistent with how I handled the 1099s. The IRS examiner made it very clear that for 1099-NEC forms, you should use your LLC name and EIN as the payer, even though it's a disregarded entity. She explained that the "disregarded" status only applies to income tax reporting (where your LLC income flows through to your personal return), but NOT to information returns like 1099s. Think of it this way: your contractors worked for "Your LLC Name" not for you personally. That's the business entity they invoiced and that's what should appear on their 1099s. Using your personal name and SSN can create matching problems in the IRS system and potentially trigger notices for both you and your contractors. One tip: make sure your business bank account is also under the LLC name with the EIN. This creates a clean paper trail that matches your 1099 filings.

This is exactly the kind of confusion that trips up so many SMLLC owners! I went through this same dilemma last year and after extensive research and consultation, I can confirm that you should definitely use Option 1 - your LLC name and EIN as the payer on 1099-NEC forms. The key insight is that while your SMLLC is "disregarded" for income tax purposes (meaning the profits flow through to your personal tax return), it's NOT disregarded for information reporting purposes. The IRS treats your LLC as the actual business entity that made the payments to contractors, so that's what needs to appear on the 1099s. This also makes practical sense - your contractors likely have contracts with "My Cornerstone LLC" not with Jane Smith personally. They invoice your business name, you pay from business accounts, so the 1099 should reflect that business relationship. One more tip: make sure you're consistent across all your business filings. Use the LLC name and EIN for all 1099s, and keep your business banking and record-keeping aligned with this approach. It creates a clean paper trail that the IRS can easily follow.

Sean, I completely understand your confusion - this exact situation trips up a lot of people! The short answer is yes, you absolutely need to report that $650 even without receiving a 1099. The IRS considers all income taxable regardless of whether you get the paperwork. Since your neighbor had you fill out a W9 and paid you over $600, they were actually required to send you (and the IRS) a 1099-NEC by January 31st. You should definitely reach out to them about this - they might have just forgotten or sent it to the wrong address. Here's what you need to do: Report the income on Schedule C (it's simpler than it sounds), and yes, you'll need to pay self-employment tax on it (about 15.3%, so roughly $100). I know that seems like a lot for a weekend job, but it's the law. One silver lining - you can deduct any legitimate business expenses like tools you bought, mileage driving to the job, or even a portion of your phone bill if you used it for work coordination. These deductions can help offset some of that self-employment tax. Don't stress too much about the complexity - most tax software will walk you through the Schedule C process step by step. Better to report it correctly now than deal with IRS letters later!

I went through something very similar last year with some handyman work I did for a few different people. Made about $900 total across several small jobs, and only got one 1099 even though three different people had me fill out W9s. Here's what I learned: You definitely need to report all of it, even the income without a 1099. I used Schedule C like others mentioned, and while the self-employment tax does hurt (ended up owing about $135), I was able to deduct quite a bit - gas for driving between job sites, some tools I had to buy, even part of my cell phone bill since I used it to coordinate with clients. The key thing is keeping good records. I wish I had tracked my expenses better from the start. For your situation, think about any supplies you bought, mileage to/from the neighbor's house, wear and tear on your equipment, etc. Even small deductions add up. One tip: if you do this kind of work again in the future, consider setting aside about 25-30% of what you earn for taxes. That way you're not surprised come tax time. And definitely follow up with your neighbor about that missing 1099 - they could face penalties from the IRS for not filing it properly.

This thread has been incredibly informative! As someone who just switched to a bank offering early direct deposit, I was worried I'd created a tax nightmare for myself. Reading through everyone's experiences, it sounds like the practical approach is to document everything but not stress too much about small amounts. I'm particularly interested in the point about split direct deposits that the original poster mentioned. I currently have my paycheck split between three accounts - my main checking, savings, and an investment account. If I enable early direct deposit on just one of these accounts, I could theoretically have parts of the same paycheck hitting in different calendar years. Has anyone dealt with this specific scenario? It seems like it would create an even more complex documentation situation, since you'd need to track which portions of each paycheck were received when. I'm wondering if the hassle is worth the convenience of getting part of my pay early, or if I should just keep all my direct deposits on the same schedule to avoid complications. Also, for those who've been doing this for a while - do you find that banks are getting better about providing documentation that shows the timing differences? It would be nice if they automatically generated year-end summaries showing actual deposit dates versus intended pay dates.

This is such a well-timed discussion! I'm a CPA and have been seeing this early direct deposit question come up more frequently with clients. A few additional considerations that might be helpful: One thing to keep in mind is state tax implications. While federal tax rules are pretty clear about the constructive receipt doctrine, some states have different rules or interpretations. If you live in a state with income tax, you might want to check how they handle timing differences between federal W-2 reporting and actual receipt dates. Also, for those considering the "follow your W-2" approach - while this is often the most practical solution, make sure you're consistent year over year. If you decide to report based on actual receipt one year, you should generally continue that approach in future years to avoid creating inconsistencies in your tax filing pattern. For self-employed folks or those with 1099 income in addition to W-2 wages, the early direct deposit timing becomes even more important since you have more control over when you report that income. The mixed scenarios can get complex quickly. One last tip: if you're using tax software, many programs now have notes sections where you can document unusual timing situations like this. It's a good place to record your reasoning for how you handled any discrepancies, just in case you ever need to reference it later. The key is being consistent, well-documented, and reasonable in your approach!

This thread has been absolutely invaluable! I'm currently serving on a civil jury trial that's expected to last another two weeks, and I had no idea about any of these tax implications when I started. My employer has a hybrid policy - they pay my full salary for the first 5 days of jury service, but after that I'm on unpaid leave and can keep whatever the court pays me. So far I've received about $180 from the court (we get $40/day here), and since I'm past the 5-day mark, I'll need to report all of it as other income. What I'm wondering is whether I need to report the first 5 days worth of jury pay differently since my employer was paying my salary during that time but didn't require me to turn over the jury pay to them. From reading through all these comments, it sounds like since my employer didn't require me to reimburse them with the jury pay from those first 5 days, I still need to report ALL of the jury duty compensation as income - is that right? The policy seems to be that unless the employer both pays your salary AND requires you to give them the jury pay, you have to report it all. Also, does anyone know if there are any special considerations for longer jury service periods? I'm looking at probably $600+ total by the time this trial is finished. Thanks for all the great information everyone has shared!

I'm dealing with a slightly different scenario and wanted to see if anyone has experience with this. I served jury duty last year for 3 days and received $120 total from the court. My employer has a policy where they continue paying full salary during jury duty, but they don't require employees to turn over the jury pay - we get to keep it as a "bonus" for performing our civic duty. Based on everything I've read in this thread, it sounds like I need to report the full $120 as other income on Schedule 1, line 8z since my employer didn't require me to reimburse them, even though they continued paying my regular salary. Is that correct? I'm also curious if anyone knows whether this kind of employer policy (letting you keep jury pay as essentially a bonus) affects anything else tax-wise. My company is pretty generous with policies like this, but I want to make sure I'm handling the tax reporting correctly. Thanks for all the great information in this thread - it's been really helpful for understanding these situations!