Has the nonprofit actually filed these late 1099s with the IRS yet? If not, maybe you could talk to them about only filing for the most recent 3 years since that's typically how far back the IRS looks anyway. The nonprofit might be willing to work with you if they understand the financial hardship this could cause.

This is such a stressful situation for your volunteer, and I really feel for them. I went through something similar a few years ago when I discovered I hadn't been reporting some freelance income properly. One thing that might help is to have the volunteer gather any documentation they can find about expenses related to their volunteer work - even partial records can be helpful. Things like: - Cell phone records showing calls/texts related to volunteer activities - Calendar entries or emails that could help reconstruct mileage - Any photos they might have taken during volunteer events that are timestamped - Bank or credit card statements showing purchases that could be volunteer-related Also, depending on the volunteer's income level, they might qualify for free tax preparation help through the VITA (Volunteer Income Tax Assistance) program. These volunteers are trained to handle situations exactly like this, and since your volunteer is on a limited income, they would likely qualify for the service. The most important thing is that they don't ignore this situation. The IRS is generally more willing to work with people who are proactive about fixing tax issues rather than those who try to avoid them. With the right approach and documentation, this might not be the financial disaster it seems like at first glance.

The $600 threshold is definitely real now - I learned this the hard way when I got a 1099-K for my pet sitting side business last year. Even though you might not get the form, you're still required to report all income. One thing that really helped me was setting up a separate savings account and putting aside about 25-30% of each payment for taxes (covers both income tax and self-employment tax). That way when tax time comes, you're not scrambling to find money to pay what you owe. Also, don't stress too much about perfect record keeping for what's already happened - the IRS accepts reasonable documentation. Your Apple Cash screenshots showing dates, amounts, and who paid you should be sufficient. Just start keeping better records going forward with a simple spreadsheet tracking income and any business expenses. You're being smart by thinking about this now rather than ignoring it. Most people in your situation who run into trouble are the ones who never report anything at all, not the ones trying to do things right.

The key thing to remember is that you're already ahead of most people by thinking about this proactively! I run a small freelance writing business and went through this same panic when I first started making money through payment apps. A few practical tips from my experience: 1. Yes, you need to report this income on Schedule C regardless of whether you get a 1099-K form. The $600 threshold just determines if payment processors send you and the IRS a form, but your obligation to report income hasn't changed. 2. For documentation, your Apple Cash screenshots are actually fine - just make sure they show the date, amount, and ideally what the payment was for. Create a simple spreadsheet now with columns for date, amount, client/description, and keep it updated going forward. 3. Don't forget about business deductions! Things like repair supplies, any software you use for tutoring, a portion of your phone bill, even some textbooks if you reference them for tutoring could potentially be deductible. 4. Consider opening a separate checking account for your business income. Makes tracking so much easier and looks more professional if you ever do get audited. You don't necessarily need a business license for this scale, but check your college's policies too - some schools have rules about students running businesses on campus or in dorms. The IRS isn't going to come knocking down your door over $4,800, especially if you report it properly. Just get organized now and you'll be fine!

Are you and your fiancée filing taxes together? Because if so, I think there might be a different issue - you can't claim someone as a dependent if you're filing a joint return with them.

Just to add another perspective - I work as a tax preparer and see this confusion all the time! You're absolutely right that it's the net profit from Schedule C that counts toward the qualifying relative income test, not gross receipts. One thing to also keep in mind is that if you had any estimated tax payments or self-employment tax throughout the year, those don't reduce your "gross income" for dependency purposes - it's still the $2,700 net profit that counts. The self-employment tax is calculated separately and doesn't affect whether you meet the income test. Also, since you mentioned you're getting married next year, just be aware that once you're married, you'll need to decide whether to file jointly (which would be more beneficial in most cases) or separately if one of you wants to continue being claimed as a dependent by someone else. But that's a problem for next year's taxes!

If all else fails and the payment does get rejected, make sure you immediately make a payment through IRS Direct Pay online using a debit card or electronic funds withdrawal. That way you minimize the time between the rejected payment and the new one.

I'm glad to see you got this sorted out with your credit union! For anyone else who might face this situation, I wanted to add that you can also check the status of your scheduled payment on the IRS website. If you go to IRS.gov and look for "View Your Account Information" or "Get Transcript," you can often see pending payments and their status. Also worth noting - if you do need to cancel a direct debit payment with the IRS, you generally need to do it at least 2 business days before the scheduled payment date. After that window, you'd need to work with your bank to stop the payment, which might involve fees. The silver lining in situations like this is that it's a good reminder to always verify banking information twice when setting up any automatic payments, not just taxes. I've learned to keep a physical copy of a voided check handy specifically for these situations.

Thanks everyone for the detailed explanations! This is exactly what I needed to understand. So if I'm reading this correctly, the $31,050 on my paystub represents both the actual relocation expenses my company paid AND the additional amount they're giving me to cover the taxes on those expenses. The $21,927 "offset" is just an accounting line item to show how they're tracking it internally, but the full $31,050 will show up as taxable income on my W-2. The key point I was missing is that even though it looks like a lot of extra taxable income, my company has already calculated and included enough extra money so that after I pay taxes on the whole amount, I'm not actually out of pocket for the move. That's really generous of them! I was worried I'd be hit with a huge unexpected tax bill, but it sounds like they've already accounted for that. I'll definitely keep an eye on my W-2 next year to make sure everything looks right, but this gives me much more confidence in planning my tax situation. Really appreciate everyone sharing their experiences!

Great breakdown everyone! As someone who works in corporate payroll, I can confirm that what's been explained here is spot on. The gross-up calculation is designed to make you "whole" after taxes, meaning you shouldn't be financially worse off due to the tax implications of your relocation benefit. One thing I'd add is that some companies will do a "true-up" calculation after your actual tax return is filed. If their estimated tax rate was too high or too low, they might adjust your pay the following year to account for any difference. Not all companies do this, but it's worth asking your HR or payroll team if they have a true-up policy. Also, make sure you keep all your relocation-related documentation. Even though you can't deduct moving expenses anymore for federal taxes, some states still allow deductions, and you'll want those records if you ever get questioned about the large income addition on your W-2.