Anyone know how to handle this on TurboTax? I tried searching for "rebates" but couldn't find the right section.

I appreciate everyone sharing their experiences here! As someone who's been dealing with this exact situation, I want to add that it's also worth considering state tax implications. While the federal tax treatment is pretty clear (purchase rebates = not taxable, referral bonuses = taxable), some states have different rules or might treat certain types of rewards differently. Also, if you're using rebate apps for business purchases, make sure you're adjusting your business expense deductions accordingly. You can't deduct the full purchase price and keep the rebate tax-free - that would be double-dipping. The IRS definitely notices patterns like that during audits. One more thing - if you're earning significant amounts from referral programs (like $600+ per year), you might want to consider setting aside a portion for taxes since most rebate companies don't withhold anything. Better to be prepared than scramble come tax time!

This thread has been incredibly helpful! I'm in a similar situation as a new investor and was making the exact same mistake. I had about $3,200 in short-term gains last year and was planning my taxes thinking it was all just "regular income." What really clicked for me reading through everyone's explanations is that the IRS has very specific definitions that don't always align with how we think about things intuitively. Just because I'm actively trading and spending time researching doesn't make it "earned" income in the tax sense. The practical implications are huge too - I was about to contribute to my IRA based on my total income including the trading gains, which would have been a costly mistake. Now I know I can only contribute based on my actual W-2 wages. One question though - does anyone know if this changes if you elect Mark-to-Market accounting as a trader? I've heard conflicting info about whether that affects the earned vs unearned classification or just how you report the gains and losses.

This thread has been super educational! I'm also a newer investor and was definitely in the same boat of thinking short-term gains might count as earned income since they get taxed at ordinary rates. What really helped me understand is everyone's point that the tax RATE doesn't determine the income TYPE. Short-term gains just happen to be taxed at the same rates as your job income, but they're still fundamentally investment income, not work income. I made a similar mistake last year where I was planning my Roth IRA contributions based on my total income including some short-term trading gains. Luckily my tax software caught it, but it would have been an expensive error if I'd over-contributed based on income that doesn't actually qualify. The "two buckets" analogy someone mentioned is perfect - I'm definitely going to start tracking earned vs unearned income separately throughout the year. It'll make tax planning so much clearer and help avoid these kinds of costly mistakes. Thanks to everyone who took the time to explain this so thoroughly! This is exactly the kind of practical tax advice that's hard to find elsewhere.

Quick question related to this - if the OP is getting 1099s from both contract work and ticket sales, does he need to file two separate Schedule Cs or can they be combined since they're both independent contractor type income?

Great thread with lots of helpful info! As someone who's been navigating 1099 contractor taxes for a few years now, I'll add a couple practical tips that might help: For your business exploration expenses - definitely keep detailed records showing your profit motive. I learned this the hard way when I got questioned about some photography equipment purchases. What helped me was creating a simple business journal documenting my activities: dates I worked on the business, what I did, expenses incurred, and income generated. Even failed attempts count if you can show genuine business intent. One thing I wish someone had told me earlier: if you're testing multiple business ideas, consider whether some of them might actually qualify as research and development expenses rather than just business expenses. The tax treatment can sometimes be more favorable. For the ticket reselling - definitely agree with the separate Schedule C advice. I made the mistake of lumping different income streams together my first year and it was a nightmare to untangle. Keep meticulous records of every ticket purchase with the intent to resell, even if you end up using some personally. Also, don't forget about the quarterly estimated tax payments if you're making decent money from both activities. Getting behind on those can be painful come April!

I went through almost the exact same situation last year! The key is to carefully review every single health insurance question in your tax software. What likely happened is that somewhere in the process, you accidentally indicated that you either: 1. Had Marketplace coverage 2. Received advance premium tax credits 3. Expected to receive a 1095-A form Even if you think you answered everything correctly, go back through each healthcare-related screen one by one. Sometimes the software auto-fills answers based on previous responses, or there might be a confusing question that you interpreted differently than intended. Also, make sure you're selecting the right option for your actual coverage situation. If you had other insurance (employer, spouse's plan, etc.), select that. If you had no coverage at all, there should be an option for that too. Once you find and fix the incorrect answer, your return should go through without needing a 1095-A. The rejection happens because the IRS computer system sees a mismatch between what your return claims and what forms they expect to receive.

This is such a frustrating situation, but you're definitely not alone! I had a similar issue where my return kept getting rejected for a missing 1095-A even though I never enrolled in Marketplace coverage. One thing that helped me was using the IRS Interactive Tax Assistant tool on their website (irs.gov/help/ita). There's a specific section about health coverage reporting that walks you through exactly what to enter based on your situation. It helped me identify that I was incorrectly answering a question about "minimum essential coverage." Also, if you're still stuck after checking all the healthcare sections in your tax software, you might want to try switching to a different tax preparation program temporarily. Sometimes the way questions are worded varies between software, and what's confusing in one program might be clearer in another. The good news is that since the individual mandate penalty is $0 at the federal level, there's no financial penalty for having no coverage - you just need to make sure your return accurately reflects your actual situation.

Don't forget about quarterly estimated tax payments! I do similar expert calls and got hit with an underpayment penalty my first year because I wasn't making quarterly payments. Since you don't have taxes withheld from these payments like your regular job, you're supposed to pay as you go.

Great question about quarterly payments! Generally, if you expect to owe $1,000 or more in taxes when you file your return, you should make quarterly estimated payments. With 4-5 calls at $350-500 each, you're probably looking at $1,400-2,500 in additional income, which could easily put you over that threshold when you factor in self-employment tax. The safe harbor rule is helpful here - if you pay at least 100% of last year's total tax liability through withholding and estimated payments (110% if your prior year AGI was over $150k), you won't face penalties even if you owe when you file. I'd recommend calculating roughly 25-30% of your consulting income and setting it aside for taxes. You can always adjust if needed, but it's better to overpay slightly than get hit with underpayment penalties.