Just a heads up - if you do decide to report this income next year instead of this year, be aware that the company might issue a 1099 for the current year even though you earned the money in 2022. If that happens, you'll need to explain the situation if the IRS questions the discrepancy. Generally, it's best to report income in the year you receive it if you're a cash-basis taxpayer (which most individuals are).

As someone who's dealt with similar timing issues on contractor income, I'd recommend keeping detailed records of when you actually performed the work versus when you receive payment. The IRS generally follows the cash method for individuals, so you'll report the income when you actually receive it, not when you earned it. One thing to consider - since you're making $95k at your regular job, this additional $850 will be taxed at your marginal rate (likely 22% federal) plus the 15.3% self-employment tax, so set aside roughly $300-350 to cover the tax liability when you do receive the payment. Also, don't forget that you'll need to make quarterly estimated tax payments if this pushes your total tax liability over $1,000 for the year you receive it. The IRS gets grumpy about underpayment penalties, even on relatively small amounts.

anyone else remember when we had to wait for paper checks in the mail? dark times fr fr

I work for a regional bank and can confirm what @Giovanni said is exactly right. We get the ACH file from the IRS with pending deposits, and some banks choose to advance those funds immediately while others wait for settlement. The IRS batch processes refunds and sends them out the same time for everyone - usually Tuesday nights for Wednesday posting. The "early" part is just your bank's policy on when to release pending ACH credits. Pro tip: if you have direct deposit set up correctly and no issues with your return, you can usually expect your refund within 21 days of e-filing regardless of which bank you use.

Y'all are forgetting the biggest one - citizenship renunciation. Billionaires like Eduardo Saverin (Facebook co-founder) have literally given up US citizenship to avoid capital gains taxes. The US is one of the only countries that taxes citizens on worldwide income regardless of where they live.

The strategies mentioned here are all accurate, but there's one more layer that's often overlooked - the timing and coordination of these techniques. The ultra-wealthy don't just use one strategy; they orchestrate multiple approaches simultaneously. For example, they might establish a GRAT (as mentioned) while also taking out loans against appreciated assets, using the loan proceeds to fund the GRAT. This creates a cascading effect where unrealized gains are transferred to heirs without triggering current taxes, while the original assets continue appreciating in their portfolio. Another key point: they have teams of specialists - tax attorneys, wealth managers, and accountants - working year-round on optimization, not just during tax season. Regular taxpayers might spend a few hours on taxes annually, while billionaires have professionals dedicating thousands of hours to minimize their tax burden legally. The real advantage isn't just access to these strategies, but having the resources to implement them perfectly and the cash flow flexibility to make moves based on tax implications rather than immediate liquidity needs. When you can afford to hold assets for decades without selling, the entire tax game changes.

What about Social Security benefits? I'm semi-retired collecting Social Security but started selling vintage hats at markets. My friend said making too much could reduce my benefits but IDK if that's true???

Great advice from everyone here! I wanted to add one thing that helped me tremendously when I started my vintage vinyl side business - keeping a dedicated business bank account and credit card. It makes tracking so much easier come tax time. Even though you're just starting out, separating your personal and business finances will save you hours of sorting through transactions later. Use the business account/card for ALL business expenses - inventory purchases, booth fees, supplies, gas for sourcing trips, everything. Then your bank statements become a perfect record of your business activity. Also, consider getting a simple bookkeeping app like QuickBooks Self-Employed or even just a spreadsheet template. I track every purchase with photos of receipts and notes about what I bought and where. When tax time comes, everything is already categorized and ready to go. The few extra minutes each week saves massive headaches in April! One more tip - start building relationships with other vendors at your markets. They're often happy to share tax strategies and might even refer customers to you. The vintage community is surprisingly supportive once you become a regular face at the markets.

Has anyone tried just calling PayPal to get them to issue a corrected 1099-K? This seems like a massive problem they've created for tons of people who use their service for gambling transactions.

This is such a frustrating situation that many of us are dealing with thanks to the new $600 1099-K reporting threshold. I went through this exact same headache last year with about $12K showing on my PayPal 1099-K when my actual sports betting profit was only around $2,800. What worked for me was keeping meticulous records from each betting platform showing my complete transaction history. Most sites like DraftKings and FanDuel will provide you with annual summary statements if you contact their customer service - these are gold for documentation purposes. I reported my actual gambling winnings as "Other Income" on Schedule 1 and attached a brief statement explaining the discrepancy with the 1099-K. The key is being transparent about the situation rather than trying to hide it. The IRS knows this is a common issue with payment processors now. One tip: make sure you track not just your deposits and withdrawals, but also any bonuses or promotional credits you received. Those can sometimes count as taxable income even if you didn't actually win that money through betting. Keep everything organized in a spreadsheet with dates and amounts - it'll save you tons of stress if you ever get questioned about it.