Don't overthink this - just report it as "Other Income" on Schedule 1 and move on with your life. It's not self-employment income since you weren't actively involved in the business, and it's not a gift since there was an expected return. The key with situations like this is to make a reasonable, defensible choice and be consistent. The last thing you want is to get creative with tax reporting and then have to explain yourself later. People get in trouble with the IRS when they try to get too clever with borderline cases. Reporting as other income is straightforward, accurate, and won't raise any red flags.

I've been through something very similar and can share what I learned after consulting with a tax professional. The key factor is that you provided money with a clear expectation of return based on performance - this makes it an investment arrangement, not a gift. Here's what I'd recommend: Report this as "Other Income" on Schedule 1, Line 8z. You don't need Schedule C unless you're regularly in the lending business. The amount isn't subject to self-employment tax since you weren't actively participating in the house flipping business itself. A few important considerations: Make sure you keep records of when you provided the money and when you received the return, as this could affect whether it's treated as short-term or long-term investment income. Also, if your friend issues you any tax forms (like a 1099), make sure your reporting is consistent with whatever he files. The "gift" route is risky because the IRS looks at substance over form - a payment that's exactly 25% of profits clearly shows an investment arrangement rather than generosity. Better to report it correctly as investment income and avoid any potential issues down the road.

Don't forget that tithes and offerings aren't the only church-related expenses that can be deductible! If you drive as a volunteer (like delivering meals for church outreach or driving for youth events), you can deduct mileage at the charitable rate (14 cents per mile I think). Also, if you buy supplies for church activities and aren't reimbursed, those count too.

As someone who's been navigating church donations and taxes for years, I'd recommend keeping detailed records throughout the year rather than scrambling at tax time. I use a simple spreadsheet to track all my church giving - date, amount, and method of payment. For your $1300 in donations, make sure you have proper documentation. For any single donation of $250 or more, you'll need a written acknowledgment from the church (not just a bank record). The acknowledgment should state the amount, date, and confirm whether you received any goods or services in return. Also consider the "bunching" strategy others mentioned - if you're close to the itemization threshold, you might donate two years' worth in one year to exceed the standard deduction, then take the standard deduction the following year. This way you get tax benefits every other year instead of never. Given that you're already at $1300 with more of the year left, you might be closer to this strategy working than you think!

Just to add to what everyone's saying - even if you only worked 3 weeks, if you received ANY pay, it counts as taxable income for 2024. The IRS matches up employer reports with your tax return, so they'll definitely notice if something's missing. Better to report everything upfront than deal with notices later. If you haven't received the W-2 by early February, you can file Form 4852 as a substitute, but try contacting your old employer first.

Thanks everyone for the helpful advice! I'm definitely going to wait for the W-2 from my short-term job and report all income. Better safe than sorry with the IRS. Really appreciate all the responses - this community is awesome for getting real answers about tax stuff 👍

Just wanted to share my experience since I went through something very similar last year. After my employer kept delaying my W2, I ended up using both approaches mentioned here - first tried taxr.ai to calculate what my W2 should look like, then used Claimyr to actually talk to an IRS agent about filing Form 4852. The taxr.ai tool was surprisingly accurate and helped me understand all those hidden components that affect Box 1 (like imputed income from life insurance and company benefits). When I finally got my actual W2 months later, it matched their calculation almost exactly. But what really saved me was getting through to the IRS quickly with Claimyr. The agent explained that employers have until January 31st to provide W2s, and after that they can face penalties. She walked me through Form 4852 and said I could file it immediately rather than waiting indefinitely for an unresponsive employer. Given how long your wife's employer has been dragging this out, I'd definitely recommend the Form 4852 route. You can always file an amended return later if needed, but at least you won't miss any filing deadlines while waiting for a company that clearly doesn't have their act together!

I've been following this thread and just wanted to add one more potential source of Box 1 discrepancy that hasn't been mentioned yet - educational assistance benefits! If your wife's employer provided any tuition reimbursement, student loan payments, or other educational assistance over $5,250 during the year, the excess amount becomes taxable income that gets added to Box 1. Also, if she received any achievement awards, length of service awards, or other employee recognition gifts worth more than $1,600 total for the year, those would also be included as taxable income. These types of benefits often don't show up clearly on regular pay stubs but can significantly impact the Box 1 calculation. Given all the complexity everyone has outlined here, I'm definitely in the camp of using the tools mentioned (taxr.ai for calculation, Claimyr for IRS contact) rather than trying to manually figure this out. Your wife's employer sounds incredibly unprofessional, and you shouldn't have to put your tax filing on hold because they can't do basic administrative tasks. Good luck getting this resolved!

This thread has been incredibly helpful! I'm someone who occasionally plays poker at my local card room and I had no idea about the 300x rule for tournament withholding. One thing I'm still confused about though - let's say I play cash games regularly and over the course of a year I have some big winning sessions and some losing sessions. Do I need to track every single session, or just my net result for the year? Like if I win $800 one night and lose $600 the next night, how granular do I need to get with my record keeping? Also, does anyone know if there are any mobile apps specifically designed for tracking gambling wins/losses? Keeping a spreadsheet sounds smart but I know I'll forget to update it if I have to do it manually every time. Something that could track location, date, and amounts would be perfect for someone like me who plays regularly but not professionally. Thanks to everyone who's shared their experiences - this is exactly the kind of real-world advice you can't find on the IRS website!

This is such a comprehensive discussion! As someone who's been dealing with gambling taxes for a few years now, I wanted to add one more scenario that trips people up - what happens when you gamble across state lines. I live in Nevada but sometimes play at casinos in California and Arizona. Each state has different tax rules, and you might end up owing taxes to multiple states on the same winnings. Nevada has no state income tax, but if I win big in California, they'll want their 13.3% even though I'm not a CA resident. The good news is most states give you credit for taxes paid to other states, so you usually don't get double-taxed. But the paperwork can get complicated fast, especially if you're winning in multiple states throughout the year. Also, something I learned recently - if you're a frequent traveler for gambling, keep receipts for travel expenses. While casual gamblers can't deduct these, if you're approaching professional gambler status (which several people mentioned above), travel to gambling locations can become a legitimate business expense. Just make sure you meet all those IRS criteria for professional vs. recreational gambling that Nia outlined earlier! The record-keeping advice everyone's giving is spot on. I use a simple smartphone app to log everything immediately after each session, and it's saved me thousands in properly documented deductions over the years.