Something nobody has mentioned yet - you'll need to pay self-employment tax (Medicare + Social Security) on this income too, which is about 15.3% ON TOP OF regular income tax. It really adds up! If you think you'll make more than $1000 in self-employment income in 2025, you should probably make quarterly estimated tax payments to avoid underpayment penalties next year.

I went through the exact same situation last year! The key thing to remember is that the $600 threshold for 1099-K forms is just when PayPal is required to send YOU the form - but you're required to report ALL income regardless of whether you get a form or not. Here's what I did in TurboTax: Go to the "Federal Taxes" tab, then "Wages & Income," and look for "Self-Employment Income" or "Business Income." You'll create a simple business for your art commissions. For the income amount, just add up all your PayPal payments from your transaction history - PayPal keeps good records that you can download. The silver lining is that you can deduct business expenses like art supplies, software, and even a portion of your internet bill against this income. Keep all your receipts! Also, since you made around $1,400 total ($800 PayPal + $600 from the 1099), you'll owe self-employment tax on that, but it's not as scary as it sounds when you factor in the deductions. Don't stress too much - you're doing the right thing by reporting everything honestly!

My stepsister had this exact issue two months ago and couldn't get any answers from anyone. She finally broke down and used a calling service (claimyr.com) to get an actual IRS person on the phone. Turns out they were taking her entire refund for old student loans. At least knowing helped her adjust her budget instead of counting on money that wasn't coming.

This is such a stressful situation! I've been through something similar. The Treasury Offset Program hotline at 1-800-304-3107 is definitely your best bet for finding out if there's an active offset against your refund. It's automated but will at least confirm if they're planning to take money. Unfortunately, from my experience and what I've seen others go through, if you have defaulted federal student loans, they typically take the entire refund amount - not just a portion. And you're right to be concerned about the timing since they don't give you advance notice beyond what you can find through that hotline. One thing to keep in mind is that even when they do take your full refund, only a portion actually goes toward your loan principal. A significant chunk gets eaten up by collection fees and interest, which is incredibly frustrating when you're already struggling financially. If you do find out they're taking your refund, try to contact your loan servicer ASAP to discuss rehabilitation options. It won't help for this year's refund, but it could prevent this from happening again next year. Good luck!

Don't forget about the Qualified Business Income Deduction (Section 199A)! As a martial arts instructor with your own business, you likely qualify for this. It lets you deduct up to 20% of your qualified business income, which can significantly reduce your taxable income. So if your profit after expenses is $5000, you might be able to take another $1000 off your taxable income with this deduction. It's on Form 8995. Lot of small business owners miss this!

Great advice from everyone here! As someone who also operates a small martial arts business, I'd add a few practical tips for Mateo: 1. **Keep detailed records NOW** - Don't wait until next tax season. Track every business expense, no matter how small. I use a simple spreadsheet with columns for date, amount, description, and category. 2. **Separate business and personal expenses clearly** - Even though you're using your SSN, treat this as a legitimate business. If you buy equipment that you also use personally, only deduct the business portion. 3. **Consider quarterly estimated tax payments** - With $8400 in profit, you'll owe self-employment tax plus income tax. The IRS expects you to pay as you earn, not just at year-end. Use Form 1040-ES to calculate and avoid underpayment penalties. 4. **Document your business use of home** - If you use part of your home for business planning, storing equipment, or administrative work, you might qualify for the home office deduction. Measure the square footage and keep records. The 1099-K can be intimidating the first time, but once you understand that it's just a reporting document and not necessarily your exact taxable income, it becomes much more manageable. You've got this!

I work as a tax preparer and see this exact confusion every tax season. The school's finance manager is absolutely wrong about the distinction between "tuition" and childcare for DCFSA purposes. The IRS doesn't care what the school calls their billing categories internally. Publication 503 is crystal clear: if the program is below kindergarten level, ALL expenses qualify as care expenses - period. There's no separate "tuition exception" for pre-K programs. What's happening here is the school is conflating different tax provisions. The education tax credits (like the American Opportunity Credit) do distinguish between educational expenses and childcare, but DCFSA rules are completely different. I'd recommend getting the IRS language in writing and scheduling a meeting with the school director, not just the finance staff. Bring up that this affects multiple families and that other schools in your area likely provide proper documentation. You're entitled to use your full DCFSA benefit for this program. If they continue to refuse, your FSA administrator may accept the expenses anyway if you provide a receipt showing it's a pre-K program with proper dates and provider information. Many FSA administrators follow IRS guidelines regardless of how schools categorize their programs internally. Don't let them cost you $5,000+ in tax savings over an incorrect interpretation of the tax code!

I'm dealing with a very similar situation with my 5-year-old's "Pre-K Plus" program! Our school director initially gave me the same response - that the "academic portion" didn't qualify for DCFSA, only the "extended care" hours. What finally worked for me was printing out the exact language from IRS Publication 503 and highlighting the key phrase: "Expenses for a child in nursery school, preschool, or similar programs for children below the level of kindergarten are expenses for care." I also found IRS Revenue Ruling 2003-92 which specifically addresses this issue and confirms that educational content doesn't disqualify pre-K programs from DCFSA eligibility. The breakthrough came when I asked the school director to show me where in the IRS code it says "tuition" for pre-K programs is treated differently than "childcare." They couldn't find any such distinction because it doesn't exist. I ended up getting full documentation for our $18K program, and our FSA administrator (FSAFEDS) accepted it without question. The key was being persistent but professional, and having the actual tax code references ready. Don't give up - you're absolutely right about this and it's worth thousands in tax savings! If your school continues to resist, consider reaching out to other parents in the program. When multiple families raise the same concern, schools tend to take it more seriously and consult with their own tax advisors.

Had this EXACT issue in February. Bank rejected my DD on Feb 9th, and I received my paper check on March 4th - so exactly 24 days. The most frustrating part was that my WMR status never updated from "Your refund has been sent to your bank" even after I physically received and deposited the check! Make sure you're checking your mail daily and sign up for Informed Delivery if you haven't already.

I went through this exact situation in 2023 and can share some practical advice. First, don't panic about the timing - the 2-3 week timeframe mentioned earlier is pretty accurate in my experience. I received my paper check exactly 19 days after the rejection. Regarding your mailing address concern: if you're only temporarily relocated, I'd recommend setting up a USPS mail hold or forward rather than changing your address with the IRS via Form 8822. The IRS will mail the check to whatever address is on your return, and changing that address mid-process could actually cause delays. A simple mail forward through USPS is much faster and won't interfere with their systems. Pro tip: Sign up for USPS Informed Delivery if you haven't already - it'll give you a heads up when the check is coming so you're not anxiously checking the mailbox every day. The check will come in a standard white Treasury envelope, not anything fancy. One last thing - keep documenting everything (rejection notice, dates, etc.) in case you need to follow up later. Good luck!