Just so you know, the IRS has started getting reports from payment processors like PayPal and Venmo for transactions over $600 starting in 2023 (was supposed to be 2022 but they delayed it). So even though you might not have received 1099s for previous years, going forward they'll have more visibility into your online sales income.

I've been through a similar situation and want to share some practical advice. First, take a deep breath - filing amended returns voluntarily is actually the right thing to do here, and the IRS generally views this favorably compared to discovering unreported income during an audit. Since you were buying collectibles specifically to resell at a profit, this would indeed be considered business income subject to both regular income tax and self-employment tax (15.3%). However, you can deduct all legitimate business expenses: the cost of items purchased for resale, eBay/PayPal fees, shipping supplies, packaging materials, mileage for inventory purchases, and even a portion of home internet costs if you were listing from home. The key is thorough documentation. Gather all your eBay sales records, PayPal transactions, receipts for items purchased, and any other business-related expenses. The more organized you are, the smoother the process will be. Regarding penalties, yes, there will likely be failure-to-pay penalties (0.5% per month up to 25%) plus interest (currently around 7-8% annually), but these are calculated only on the net tax owed after deductions. An accuracy penalty of 20% might apply, but this can sometimes be waived for reasonable cause - especially since you were following advice from a professional. Don't let anxiety paralyze you. The longer you wait, the more interest accrues. Consider consulting with a new tax professional who specializes in amended returns to ensure everything is filed correctly and to help minimize your liability through proper deduction strategies.

Been here since January waiting on last years refund, these new codes are nothing to worry about tbh. Just part of the process

Don't panic! I had the exact same codes (570 and 971) last year with $0.00 amounts and got my refund about 10 days after the PATH Act date. The 570 is just a temporary hold while they verify your EITC eligibility - it's completely automated and routine. The 971 notice will probably just be a standard letter explaining the delay. Keep checking your transcript every few days for an 846 code (refund issued) - that's when you'll know your money is coming! The timing actually looks normal for PATH Act processing.

Important point everyone is missing: If you use the standard mileage deduction rate for the first year, you can switch between standard mileage and actual expenses in future years. But if you use actual expenses the first year, you're LOCKED IN to using actual expenses for the life of that vehicle. THIS IS HUGE if you're buying a car specifically for gig work. Get professional advice before making this decision because it could cost you thousands over the life of the vehicle if you choose wrong in year one. Also, keep a mileage log no matter what method you choose. IRS requires it even if you go with actual expenses. There are good apps for this - I use Stride.

Something else to consider that might affect your decision - if you're consistently making $650/week between both of you from gig work, you're looking at around $33,800 annually in self-employment income. This means you'll owe self-employment tax (15.3%) on top of regular income tax. A dedicated business vehicle can help offset some of that tax burden, but make sure you're also setting aside money quarterly for estimated tax payments. The IRS expects you to pay as you go when you're self-employed, not just at year-end. Also, don't forget about business insurance. Your personal auto policy likely won't cover you during commercial activities. You'll need either rideshare coverage or commercial insurance, which will be another deductible business expense if you go the actual expenses route. One more tip: if you do buy a dedicated gig car, consider getting it inspected and any needed repairs done before you start using it for business. Those initial repair costs could potentially be deductible as startup expenses.

This is such a common situation right now! Based on what you've described, the main culprits are likely: 1. **401k contributions reducing withholding**: Your 11% contribution lowered your taxable income, which is great, but it also means less tax was withheld from each paycheck throughout the year. So while you're paying less total tax, you're also getting less back as a refund. 2. **Overtime pay withholding issues**: When you get overtime, the payroll system often withholds at a higher rate assuming that's your normal pay level. But if your base salary + overtime put you in a different tax bracket temporarily, the withholding calculations can get wonky. 3. **Child Tax Credit changes**: The pandemic-era expansions have mostly expired, and depending on your income level, you might be getting less credit per child than in previous years. The fact that your state refund stayed consistent suggests this is federal tax law changes rather than errors in your filing. You might want to run the numbers on your total tax liability for both years - I bet you'll find you actually paid less total tax this year, just with better withholding throughout the year. Sometimes a smaller refund is actually a sign of a healthier tax situation!

I'm dealing with almost the exact same situation! My refund went from $6,800 last year to $2,400 this year and I was panicking that I'd made some major mistake. Like you, I started contributing to my 401k for the first time (8% of my salary) and got a promotion that increased my base pay. After reading through all these comments, it's starting to make sense. The 401k contributions reduced my taxable income, which is good, but also meant less tax was being withheld from each paycheck. So I was actually keeping more money throughout the year instead of overpaying and getting it back as a refund. I think the hardest part is the psychological shift - I've always looked forward to that big refund check, so seeing it cut by more than half felt like something was wrong. But mathematically, if I had an extra $300+ per month in my paychecks because of better withholding, that's actually better than waiting for the government to give me my own money back with no interest. I'm definitely going to use the IRS withholding calculator to make sure everything is set up correctly for next year. Thanks everyone for the explanations - this thread has been super helpful!

Has anyone used the online form for 7004? I tried submitting electronically but got an error about the "consolidated return" field even though I left it unchecked. Is paper filing more reliable for partnership extensions?

I had a similar electronic filing issue with 7004 last year. The problem was that my tax software was automatically populating certain fields based on entity type detection, even when I thought I had left them blank. Try checking if your software has an "entity type" or "return type" setting that might be influencing how it handles the consolidated return question. Also, make sure you're using the correct version of Form 7004 - there are different versions for different entity types. If the electronic filing keeps giving you trouble, paper filing is definitely reliable for partnership extensions. I've never had issues with paper 7004s, and for something as straightforward as a partnership extension, it might be worth avoiding the electronic headaches altogether.