Omar, you're absolutely right to be concerned about this! I went through the same confusion last year when I started getting paid through Zelle for my consulting work. The key thing to understand is that while Zelle doesn't send 1099-K forms like PayPal or Venmo, ALL income is still taxable regardless of how you receive it. Think of it this way - if someone paid you $25,000 in cash, you'd still owe taxes on it even though there's no paper trail, right? For your $25,000 in annual Zelle payments, you'll need to report this as business income on Schedule C of your tax return. Make sure you're also tracking any business expenses you can deduct - things like software subscriptions, equipment, home office expenses, etc. These deductions can significantly reduce your tax liability. My advice: Start keeping meticulous records NOW. Create a simple spreadsheet with columns for date, client name, amount, and description of work. Also save screenshots of your Zelle transactions as backup documentation. The IRS may not get automatic reports from Zelle, but if you're ever audited, they'll definitely want to see proof of your income and expenses. Don't risk not reporting it - the penalties and interest for unreported income are way worse than just paying the taxes upfront. Better to be safe and compliant!

The confusion around Zelle and tax reporting is totally understandable, Omar! I went through this exact same worry when I started my freelance photography business. Here's the bottom line: Zelle's exemption from 1099-K reporting requirements doesn't exempt YOU from reporting the income. The $25,000 you're making annually absolutely needs to be reported on Schedule C as self-employment income, and you'll owe both regular income tax AND self-employment tax on it (about 15.3% for Social Security/Medicare). Since you mentioned your record-keeping hasn't been meticulous, I'd strongly recommend going back through your bank statements and Zelle transaction history to create a complete record of all payments received. The IRS can easily spot unreported income during an audit by comparing your bank deposits to your reported income, even without 1099 forms. Also, don't forget about quarterly estimated tax payments! With $25K in annual income, you're likely going to owe more than $1,000 when you file, which means the IRS expects you to make quarterly payments throughout the year rather than paying it all at once in April. You can use Form 1040ES to calculate what you should be paying each quarter. The good news is that as a freelancer, you can deduct legitimate business expenses like software, equipment, home office costs, etc. to reduce your taxable income. Just make sure you keep receipts and documentation for everything you claim.

I went through this exact same process about 6 months ago and totally understand the anxiety! The good news is that it's really not as scary as it seems at first. I called the number on my 5747C letter and yes, the wait time was brutal - about 2.5 hours on hold - but once I got through, the actual verification was pretty straightforward. The agent asked me to confirm basic info like my address, filing status, and some line items from my current and prior year returns. They also asked about my employer and a few specific deductions I claimed. The whole conversation took maybe 20 minutes once I was connected. My refund was issued exactly 6 weeks after the call, which was actually faster than they initially told me to expect. Just make sure you have your tax documents handy when you call - both this year's and last year's returns. The IRS agent was actually pretty helpful and explained that my return was flagged because I had moved states and changed jobs, which created an unusual pattern in their system. Don't stress too much about it - it's really just a verification process to make sure you are who you say you are!

I got a 5747C letter about three weeks ago and finally made it through the verification process yesterday. I wanted to share what worked for me since I know how stressful this can be! I tried calling multiple times but kept getting disconnected or couldn't get through at all. Finally decided to schedule an in-person appointment at my local Taxpayer Assistance Center, which was honestly the best decision. The appointment was scheduled for about 10 days out, but the actual process was so much smoother than trying to call. The IRS representative was really professional and walked me through everything step by step. She explained that my letter was triggered because I had claimed the Earned Income Tax Credit for the first time this year after getting a new job. Apparently that's a common trigger for their fraud detection system. I brought my driver's license, Social Security card, current year tax return, last year's return, and all my W-2s. The whole appointment took about 25 minutes, and she was able to verify my identity on the spot. She told me to expect my refund within 6-9 weeks, but honestly just having it resolved felt like a huge weight off my shoulders. If you're struggling with the phone lines, I'd really recommend trying the in-person route if you have a Taxpayer Assistance Center nearby. Much less frustrating than sitting on hold for hours!

Thank you for sharing this detailed comparison! As someone who's been hesitant to switch from TurboTax after using it for so many years, your experience is exactly what I needed to hear. The $173 price difference for identical results is just shocking - that's real money that could go toward building an emergency fund or paying down debt instead. I'm particularly interested in your plan to test multiple platforms next year. Would you consider including user experience factors like time spent, ease of navigation, and quality of explanations in your comparison? Sometimes the cheaper option can end up costing more in time and frustration, so it would be helpful to know if FreeTaxUSA requires significantly more tax knowledge to navigate effectively. Also, did you notice any differences in the audit support or guarantees offered by each platform? That's one area where I've always felt more comfortable with TurboTax, but I'm curious if it's more marketing than substance.

This is exactly the kind of real-world comparison I was looking for! I've been paying TurboTax's increasingly high fees for years without really questioning whether I was getting value for the extra cost. Your side-by-side test proves what I suspected - that most of us are overpaying for the same tax calculations. I'm curious about one thing though - did you notice any significant differences in the error-checking features? TurboTax is pretty aggressive about flagging potential issues or missed deductions. Does FreeTaxUSA have similar safeguards to catch mistakes before filing? Also, for anyone considering the switch, it might be worth doing what the original poster did - run your taxes through both systems one final time to build confidence before making the full switch. The peace of mind of seeing identical results is probably worth the extra hour of time investment.

Remember that the IRS looks at the "ordinary and necessary" standard for business deductions. Ask yourself: Is paying for a college degree an ordinary and necessary expense in your specific industry? For most businesses, general college tuition doesn't meet this test. The safest approach is to take business deductions only for targeted education that directly impacts your current business and take personal education credits for your degree program. Don't risk aggressive deductions that could trigger an audit!

Great discussion everyone! As someone who's been through this exact situation, I want to emphasize the importance of documentation if you do decide to deduct any education expenses. The IRS will want to see a clear business purpose for each course or program. I keep a detailed log showing how each class directly relates to my current business operations - not just vague connections, but specific skills I'm using in my work. For example, if I take a project management course, I document which client projects I'm applying those skills to and how it's improving my business performance. Also worth noting - even if some courses qualify as business deductions, you still need to be careful about how you categorize them. The IRS distinguishes between education that maintains/improves current skills versus education that qualifies you for a new trade. Make sure you're crystal clear about which category your expenses fall into before claiming any deductions.

This is definitely unemployment fraud and you should absolutely not do this. I work in tax preparation and see the aftermath of these situations regularly. The IRS and state unemployment offices have sophisticated cross-referencing systems that will catch discrepancies between your unemployment claims and tax filings. When you file your 2025 taxes claiming a newborn dependent born in December, but also received unemployment benefits during that same period for being "laid off," that's going to trigger automatic flags in the system. The timeline will be obvious - you can't be actively seeking work while in the hospital giving birth and caring for a newborn. Beyond the fraud issue, there are legitimate options you should explore first. Many people don't realize that short-term disability insurance often covers pregnancy and childbirth recovery. Check your employee benefits package - you might already have this coverage. Also, some states have temporary disability insurance programs that provide partial wage replacement during recovery from childbirth. If your employer is genuinely experiencing financial hardship and can't provide paid leave, they should be honest about that rather than suggesting illegal workarounds. There may be legitimate ways to structure unpaid leave with partial income replacement through proper channels. Document everything about these conversations and consult with an employment attorney if needed. Your employer putting you in this position is problematic on multiple levels.

As someone who's dealt with similar employer pressure in the past, I want to emphasize how important it is to trust your instincts here. You already know this feels wrong, and you're absolutely right to be concerned. What your employer is suggesting isn't just risky - it's a federal crime. Unemployment fraud can result in criminal charges, hefty fines, and having to repay benefits with penalties and interest. The fact that they're explicitly telling you to lie about your pregnancy makes this even more serious. I'd recommend taking these steps immediately: 1. Document everything - follow up any verbal conversations with emails "confirming what we discussed" 2. Review your employee handbook and benefits package for any short-term disability coverage 3. Research your state's pregnancy/disability benefits programs 4. Consider consulting with an employment attorney, especially since your employer is pressuring you to commit fraud Remember, a good employer should be helping you find legitimate solutions, not asking you to break the law. The fact that they've suggested this before shows a pattern of problematic behavior that could put other employees at risk too. Your financial needs during maternity leave are valid and important, but there are legal ways to address them. Don't let your employer's "solution" jeopardize your future financial security and legal standing.