This is a really complex situation that many business owners face. One thing I haven't seen mentioned yet is that you should also consider the possibility that your subcontractor might be an undocumented worker who doesn't have a valid SSN but still needs to work. In that case, they might be eligible for an Individual Taxpayer Identification Number (ITIN) instead. You could suggest they apply for an ITIN if they don't have a valid SSN - this would allow them to pay taxes legally while still working with you. The IRS Form W-7 is used to apply for an ITIN, and it's specifically designed for people who need to file tax returns but aren't eligible for an SSN. That said, if they're deliberately trying to avoid taxes entirely and refuse to provide any legitimate tax ID, then you definitely need to protect yourself. The backup withholding route mentioned by others is probably your safest bet for future payments. For the $9,700 already paid, definitely keep detailed records of all your attempts to get correct documentation - this shows good faith effort if the IRS ever questions it. Have you tried explaining to your subcontractor that providing false information on a W-9 is actually a federal crime? Sometimes people don't realize the serious legal consequences and might be more willing to cooperate once they understand the risks.

I've been in a similar situation and it's definitely stressful. One thing to keep in mind is that the IRS has specific procedures for when you receive a CP2100 or CP2100A notice (which happens when the name/TIN combination you reported doesn't match their records). If you file the 1099 with the information from the W-9 and it doesn't match IRS records, you'll get one of these notices. At that point, you're required to contact your contractor to get corrected information. If they don't provide it within 30 days, you must start backup withholding on future payments. For the $9,700 already paid, you'll likely need to file the 1099 anyway since the IRS expects reporting for payments over $600. Just make sure you document your efforts to obtain correct information. The key is showing you acted in good faith - save all emails, texts, or written requests you've made for proper documentation. One other consideration: some contractors legitimately don't know the difference between their SSN and an ITIN, or they might have a pending ITIN application. It's worth having a direct conversation about what specific tax identification they actually have before assuming malicious intent.

Reading through everyone's experiences here has been incredibly reassuring. I'm in a similar boat - estimated $24,800 when I applied, but due to unexpected medical issues that forced me to reduce my work schedule, I only made $17,300 last year. The thought of owing back thousands in subsidies when I'm already struggling financially has been causing me major anxiety. What strikes me most about all these stories is how common this situation actually is. Life is unpredictable - job losses, hour cuts, business downturns, health issues - yet the marketplace application process makes it seem like you should somehow be able to perfectly predict your income a year in advance. It's reassuring to know the "good faith" exception exists specifically for these real-world scenarios. I'm curious - for those who have successfully used this exception, did you need to provide any specific language or documentation when filing, or does checking the right boxes on Form 8962 generally handle it? I want to make sure I don't accidentally create complications by not being thorough enough in documenting that my income drop was genuinely unexpected when I applied.

I just want to echo what everyone else has said about how valuable this thread has been. I'm currently dealing with this exact situation - estimated $25,200 but only made $16,800 due to getting laid off from my retail job when the store closed unexpectedly. What's been most helpful is seeing that so many people have gone through similar experiences and that the "good faith" exception really does work in practice, not just in theory. When I first started researching this, I was finding conflicting information online and getting more anxious by the day. One thing I'd add for anyone else in this situation - don't let the complexity of the tax forms intimidate you into not claiming the exception you're entitled to. I was initially thinking about just paying back the subsidies to avoid any potential issues, but that would have been over $3,000 I definitely don't have. The protection exists for a reason, and based on everyone's experiences here, the IRS does recognize that life circumstances can change unexpectedly. It's unfortunate that we need tools and services just to navigate what should be a straightforward process, but I'm grateful that resources like the ones mentioned here exist to help people in these situations.

Just a heads up, there's another angle to consider. If you claim Section 179 on a vehicle over 6,000 lbs GVWR (gross vehicle weight rating), you get more favorable tax treatment. Might be worth looking at trucks in that category. Also, don't forget about the possibility of bonus depreciation instead of Section 179. The rules and limitations are different, and in some cases it might be more advantageous depending on your overall tax situation.

One thing I haven't seen mentioned yet is the potential impact on your quarterly estimated tax payments. Since you're dealing with a significant tax hit from the rental property sale ($140k capital gains + $32k depreciation recapture), you'll likely need to make estimated payments to avoid underpayment penalties. If you're planning to buy the truck this year to take advantage of Section 179, make sure to factor that deduction into your estimated payment calculations. The IRS expects you to pay as you go, so if your withholding from your W2 job plus any estimated payments don't cover at least 90% of this year's tax liability (or 100% of last year's if your AGI was over $150k), you could face penalties even if you get a refund when you file. Also, since your side business income is subject to self-employment tax, the Section 179 deduction will save you not just on income tax but also on the 15.3% SE tax portion, which adds up to meaningful savings on a $30k+ deduction.

This is such a comprehensive discussion! As someone who recently went through a similar international move, I wanted to add a few practical considerations that might be helpful. One thing that really helped me was creating a "domicile transition checklist" to ensure I was consistent in establishing my new foreign domicile. This included things like: - Opening local bank accounts and making them your primary accounts - Getting local phone service and utility accounts in your name - Registering with local tax authorities in Singapore - Getting a local driver's license (if you plan to drive there) - Joining local clubs, gyms, or community organizations - Establishing relationships with local service providers (doctors, dentists, etc.) The key insight from my tax attorney was that the IRS looks for a "preponderance of evidence" - they want to see that the majority of your life connections point to your new country rather than the US. Since you're keeping your NYC apartment unfurnished and not renting it out, document this decision well. Having it sit empty (rather than being set up as a home you could immediately return to) actually supports the argument that Singapore has become your primary domicile. Also consider the timing of your move - if you move mid-year, you might benefit from filing as a dual-status taxpayer for that transition year, which could optimize your tax situation. Good luck with your move! Singapore is an amazing place to live.

This has been an incredibly informative thread! As someone who works in international tax compliance, I wanted to add a few technical points that might help clarify the domicile vs. tax residency distinction for @Chloe Martin and others in similar situations. First, it's important to understand that "domicile" and "tax residency" are actually separate concepts, though they often overlap. Domicile is more of a legal concept about your permanent home and intent, while tax residency can be determined by various tests (physical presence, closer connection, etc.). For US citizens, you'll always be subject to US taxation on worldwide income regardless of domicile - but establishing foreign domicile can be crucial for: 1) Qualifying for Foreign Earned Income Exclusion 2) State tax purposes (as others mentioned) 3) Estate planning implications 4) Potential future expatriation decisions Regarding your specific Singapore situation - the lack of a tax treaty actually makes documentation even more important. Without treaty protections, you want to be absolutely clear about your status to avoid any double taxation issues. One practical tip: consider getting a formal legal opinion from a tax attorney about your domicile change, especially given the value of NYC real estate. The cost upfront could save significant issues later if the IRS questions your position. The physical presence test for Foreign Earned Income Exclusion (330 days in any 12-month period) might be easier for you to meet than the bona fide residence test initially, so track your days carefully from day one of your move.

This is such a helpful thread! I'm starting as a cocktail server at a casino next month and had similar concerns about GITCA. Reading everyone's experiences really puts my mind at ease that it's a legitimate program. One question I haven't seen addressed - does GITCA affect how much tax is withheld from my regular paychecks? I'm wondering if I should adjust my W-4 withholdings or if the casino automatically handles the tax withholding on the allocated tip amounts. I want to make sure I don't end up owing a bunch at tax time or getting a huge refund because my withholdings were off. Also, does anyone know if GITCA rates vary significantly between different casinos, or are they pretty standardized across the industry for similar positions?

Just wanted to jump in as someone who's been through this exact situation! I started at a tribal casino about 18 months ago and had the same concerns about GITCA sounding "too good to be true." What really helped me understand it was realizing that GITCA isn't about avoiding taxes - you still pay the same amount of taxes on your tip income. It's more like having the IRS pre-approve a reasonable estimate of what someone in your position typically earns in tips, so you don't have to prove every single dollar you made. The "won't be audited" part your manager mentioned is a bit of an oversimplification. You're protected from tip-specific audits as long as you're reporting at the agreed GITCA rates, but you could still potentially be audited for other reasons (like if you have other income sources or tax situations that raise flags). I'd definitely recommend asking your payroll department for a written explanation of how GITCA works at your specific casino, including what the allocated rates are for your position. That way you can make an informed decision and understand exactly what you're signing up for. The peace of mind and simplified record-keeping has been totally worth it for me!