This thread has been incredibly helpful! I'm dealing with a very similar situation where my girlfriend and I split all our housing costs 50/50, but everything's in my name due to her credit history. She sends me $1,200 monthly through Venmo for her half of mortgage, insurance, and utilities. Reading through everyone's experiences here has really put my mind at ease about the new payment app reporting rules. The distinction between personal expense sharing and business income makes perfect sense when explained clearly like @6a16f57c11b1 did. I'm definitely going to implement some of the documentation suggestions from @a6dd59e13835 and @c42dcc408bd5 - keeping a simple digital folder with screenshots of bills and payment records seems like the perfect balance of being prepared without going overboard. One thing I wanted to add for anyone else in this situation: my bank actually has a feature where I can set up automatic payments directly from my girlfriend's account to the mortgage company for her portion. We looked into this option, but decided the Venmo approach was simpler since we're already using it for other shared expenses. Good to know we have that backup option though if we ever want to eliminate any potential confusion. Thanks to everyone who shared their experiences and solutions - this community is such a great resource for navigating these confusing tax situations!

I'm in a nearly identical situation with my partner and our shared townhouse! He sends me $975 monthly through Venmo for his half of the mortgage and HOA fees. I was losing sleep over the new payment app rules until I did some deep research. What really helped me understand this was looking at the actual IRS Publication 525, which covers taxable income. It specifically states that money received from personal relationships for shared living expenses isn't considered income - it's cost sharing. The key is that you're not providing housing as a service or business, you're genuinely sharing the expenses of a home you both live in. I ended up creating a simple one-page agreement with my partner that outlines our arrangement - that we both consider ourselves co-owners despite the legal title, we both contributed to costs, and we're splitting ongoing expenses. I also keep a basic spreadsheet showing the actual mortgage payment and how we split it. The vacation reimbursement situation you mentioned is even more straightforward - that's just paying back money your friend spent on your behalf. The IRS sees millions of these transactions and they're clearly personal reimbursements, not taxable income. I think a lot of us are overthinking this because the new rules got so much media attention, but they're really designed to catch people running businesses through payment apps, not couples sharing household costs!

Has anyone used FreeTaxUSA for reporting Twitch income? TurboTax keeps trying to charge me for the self-employment version even though I just need to file a Schedule E for royalties.

This is exactly the kind of confusion I had when I first started getting 1099s from my side income! The distinction between royalties and self-employment income is really important and can save you money. Just to add to what others have said - since you're operating at a net loss, make sure you keep detailed records of all your streaming-related expenses (equipment, software subscriptions, games, internet upgrades, etc.). Even though you're reporting on Schedule E for the royalty income, you can still deduct ordinary and necessary expenses against that income. Also, don't let TurboTax upsell you into the self-employment package if you don't need it! The basic version should handle Schedule E just fine. If your tax software is pushing you toward Schedule C, it's probably because it's seeing "1099" and assuming it's all self-employment income, but as others have explained, the 1099-MISC Box 2 royalties are different. One last tip - keep good documentation about the hobby vs. business question. The IRS looks at factors like whether you're trying to make a profit, how much time you spend on it, and whether you have the expertise to make it profitable. Since you mentioned you're still in the "costs money" phase, documenting your efforts to grow the channel and become profitable could be helpful if this ever comes up.

Question for those who've filed late S corp elections - if I file Form 2553 now (August 2024) requesting an effective date of January 1, 2024, do I need to file my 2024 quarterly estimated tax payments based on S corp tax treatment or still as a single-member LLC until the election is approved?

I went through this exact situation last year and can confirm that the late S corp election relief is definitely available, but there are a few important details to get right that I wish someone had told me upfront. First, when you file Form 2553 for the late election, make sure you're requesting the effective date as January 1, 2024 (not your LLC formation date in September 2023). The S corp election can only be effective from the beginning of a tax year, so even though you formed the LLC in September 2023, your earliest possible S corp effective date would be January 1, 2024. Second, since you mentioned you've been paying yourself a reasonable salary and taking distributions, make sure you have all those payroll records organized. The IRS will want to see that you've been consistently operating as an S corp, including proper payroll tax withholdings and quarterly 941 filings. If you haven't been doing formal payroll with withholdings, you might want to get that straightened out before filing the election. The reasonable cause statement doesn't need to be overly complex - I kept mine to about 3-4 sentences explaining that I was unaware of the deadline and that my regular tax advisor was unavailable. The key is showing you had good faith intent to elect S corp status from the beginning of the tax year. One last tip: include copies of your LLC operating agreement and any documentation showing you intended S corp treatment (like board resolutions about salary, etc.) to strengthen your case. Good luck!

Has anyone successfully reported a company to the IRS for not sending 1099s? I'm in a similar spot with FOUR different companies who haven't sent mine. Getting really fed up with chasing them down every year.

I'd recommend filing with your bank statement records rather than waiting any longer. You've already made good faith efforts to get the 1099, and February is getting late in the filing season. One additional tip - when you report this as "Other Income" on Schedule 1, make a note in your records about the missing 1099 situation. If the IRS ever questions it, you'll want to show you attempted to get the proper documentation. Also consider sending one final certified letter to the company requesting the 1099 - this creates a paper trail showing you tried to resolve it properly. The most important thing is that you report the income accurately. The IRS cares more about you reporting what you earned than whether you have the physical form. Your bank statements showing $3,750 in deposits from this supplier are perfectly acceptable documentation.

Document EVERYTHING before you make any moves! Save all emails, text messages, take screenshots, keep copies of the incorrect return and any marketing materials they gave you (especially if they "guaranteed" bigger refunds). Take photos of their office/signage too. This will all help your case whether you go to the IRS, small claims, or try to dispute the charge. I learned this the hard way when trying to get my money back from a sketchy preparer.

I'm sorry you're going through this - tax preparer issues are incredibly stressful! You've gotten some excellent advice here. I'd especially emphasize filing that amended return (Form 1040-X) as soon as possible to correct those questionable deductions. The IRS tends to be more understanding when you proactively fix errors rather than waiting for them to find them. One thing I haven't seen mentioned yet is checking if your state has a Taxpayer Advocate Service office. They're independent from the IRS and can help if you're experiencing significant hardship from tax problems. Since you're worried about potential audits and penalties from the preparer's mistakes, they might be able to assist you in navigating the process. Also, when you do report the preparer using Forms 14157 and 14157-A, include as much detail as possible about their practices - especially that comment about "maximizing refunds" by claiming deductions you didn't authorize. That kind of pattern is exactly what the IRS looks for when investigating preparers. Stay strong - you're taking all the right steps to protect yourself!