I've been in almost exactly your situation! Started my small farm operation two years ago while working full-time, and the tax implications were definitely confusing at first. Here's what I learned that might help: You can absolutely claim startup expenses even without revenue, but the IRS will look closely at whether you're operating with genuine profit intent versus just having an expensive hobby. The good news is that agriculture gets more favorable treatment than most other businesses because the IRS recognizes farms typically take several years to become profitable. For your $17,500 tractor, Section 179 expensing could be a game-changer. Since you have W-2 income from your regular job, you might be able to deduct the entire purchase price this year rather than depreciating it over 5-7 years. This can significantly reduce your overall tax burden. The most important thing is documentation. Start keeping detailed records now: separate business bank account, written business plan (doesn't need to be fancy), photos of property improvements, and logs of time spent on farm activities. I also recommend starting a farm journal documenting daily activities, learning experiences, and business decisions - this really helps demonstrate legitimate business intent. Don't worry about the "hobby farm" classification if you're genuinely working toward profitability. The fact that you're systematically preparing infrastructure and gaining livestock experience shows real business purpose. Just make sure you can prove it through your record-keeping and business-like approach to the operation.

I'm in a very similar situation and this thread has been incredibly helpful! I started my small farm operation about 6 months ago on 12 acres, also while working my regular full-time job. Like you, I'm still in the heavy startup phase - clearing land, building infrastructure, and learning with a few starter animals. One thing that really helped me was getting clear on the difference between startup costs and ongoing operating expenses. Items like your tractor, fencing materials, and building repairs are generally considered capital investments that you'll depreciate or expense under Section 179. But don't forget about the smaller ongoing expenses that are immediately deductible - things like feed, veterinary care, fuel, small tools, educational materials, and even mileage for farm-related trips to the feed store. I'd also recommend looking into your state's beginning farmer programs. Many states offer tax incentives, reduced-rate loans, or other benefits specifically for new agricultural operations. In my state, I qualified for a property tax reduction just by filing an agricultural use application, even though I'm not selling anything yet. The consensus here about documentation is absolutely right. I started photographing all my property improvements and major purchases, and keeping a simple weekly log of farm activities. It takes just a few minutes but creates a clear paper trail showing this is a legitimate business venture, not a hobby. Good luck with your farm startup!

I just went through this exact situation last month! The IRS will definitely send your verification letter to the address on your 2023 tax return (the one you filed February 3rd), not what's currently showing on their website. Their online portal can take 4-6 weeks to update after processing, so don't worry about the address mismatch you're seeing there. Since you filed over two months ago, your return should be fully processed and the letter will go to your filing address. I waited about 8 days for mine to arrive. If you need faster access, you could try the ID.me verification route through their website - it's instant and bypasses the mail entirely. Just make sure someone can check the mailbox at your filing address if you're not there regularly. The letter comes in a standard white Treasury envelope, so it's pretty easy to spot.

I dealt with this same issue about 6 months ago when I moved mid-tax season. The good news is that the IRS will send your verification letter to the address on your most recently filed return - so in your case, it should go to whatever address you used when you e-filed on February 3rd. The website showing your old address is totally normal; their online systems are notoriously slow to update and can lag behind their actual processing systems by weeks or even months. Since you filed over 2 months ago, your return should definitely be processed by now. I'd also suggest trying the ID.me verification option if you need immediate access - it's much faster than waiting for mail and doesn't depend on which address they have on file. The whole process took me about 20 minutes and I was able to access my account right away. Just make sure you have a current photo ID handy for the verification process.

I just went through this exact same situation with my single-member LLC last month! After getting conflicting advice from multiple sources, I ended up scheduling a consultation with an Enrolled Agent who specializes in small business taxes. Here's what they confirmed for me: Since your SMLLC is a disregarded entity, you should use: Payer Name: Daniel Whitaker (your personal name) Payer TIN: Your LLC's EIN The reasoning is that as a disregarded entity, you're personally responsible for the tax obligations, but the EIN maintains the business connection for tracking purposes. This approach also aligns with how most business banking and payment processing systems work. One thing that really helped me was making sure this matches how I've been handling everything else - my business bank account, contractor payments, and previous tax filings all use the LLC's EIN. This creates consistency across all my business records, which my EA said is exactly what you want if you ever face an audit. The key is being consistent with whichever approach you choose. Since you mentioned you've been running the LLC for 2 years, make sure your 1099-NEC filing approach aligns with how you've been handling your Schedule C filings and business banking. That consistency will serve you well with the IRS!

I had this exact same confusion when I first started filing 1099-NECs for my SMLLC! After going through multiple sources and even calling the IRS, here's what I learned: For a single-member LLC that's a disregarded entity, you should use: **Payer Name:** Daniel Whitaker (your personal name) **Payer TIN:** Your LLC's EIN The logic is straightforward: since your SMLLC is disregarded for federal tax purposes, YOU are the taxpayer making these payments. However, you still use the LLC's EIN because that's the business identifier tied to your contractor payments and business operations. This approach maintains consistency with how your business banking and payments have been structured while properly reflecting your tax status as a disregarded entity owner. One critical tip: make sure this aligns with how you've been handling your Schedule C filings. When you report your business income and expenses (including these contractor payments) on Schedule C, everything should tie together cleanly. The most important thing is consistency across all your filings. Whatever approach you choose, stick with it to avoid creating red flags during any potential IRS review. Given that you've been operating for 2 years, you want your 1099-NEC approach to match your established business practices and previous tax filings.

I'm going through exactly the same issue right now! My tax code just changed from 1275L to 1104L without any explanation, and I was really worried about what it meant until I found this incredibly helpful discussion. After reading through everyone's experiences, I'm planning to check my Personal Tax Account first thing tomorrow using the "View your tax code calculation" section that so many people have recommended. I think it might be related to a company laptop that I use for both work and personal use, or possibly a small training allowance I receive quarterly - I never realized these kinds of benefits could affect tax codes! The timing pattern everyone's mentioned is really interesting - it definitely seems like HMRC is doing more comprehensive reviews of employee benefits recently. While it's frustrating to have these unexpected changes, it's incredibly reassuring to see from all these comments that there's usually a logical explanation once you understand what's happening. This thread has been more helpful than hours of searching through HMRC's official guidance! Thank you to everyone who's shared their experiences and solutions - you've given me the confidence to tackle this systematically rather than just panicking about the change. The advice about checking online first before attempting those dreaded phone calls is definitely the way to go!

I'm dealing with a very similar situation - my tax code just changed from 1275L to 1126L and I was completely confused until I found this thread! Reading through everyone's experiences has been incredibly enlightening and reassuring. Like many others here, I had no idea that so many workplace benefits could trigger these tax code changes. I'm now wondering if it might be related to a small car allowance I receive monthly (about £80) or possibly the annual eye test vouchers my company provides. It's amazing how these seemingly minor perks can add up to significant adjustments in your personal allowance over the course of a year. The pattern of recent changes that multiple people have mentioned definitely suggests HMRC is conducting more systematic reviews of employee benefits. It's both frustrating and somewhat comforting to know this appears to be happening across many companies rather than being something specific to individual circumstances. I'm absolutely going to check my Personal Tax Account using the "View your tax code calculation" section that everyone's recommended before even considering calling HMRC. After reading about those 90+ minute wait times, the online approach sounds infinitely more appealing! This community discussion has been far more helpful than any official guidance I could find. Thank you to everyone who's shared their specific situations and solutions - it's given me confidence to approach this methodically rather than just worrying about the change. For anyone else in a similar boat, it's clear that starting with the online account breakdown is definitely the way to go!

One thing nobody's mentioned yet - when you transfer your IRA to another broker, make sure you request a DIRECT TRANSFER rather than taking a distribution and redepositing it yourself. With a direct transfer, the money goes straight from one custodian to another without passing through your hands, so there's no tax impact and no reporting requirement. If you withdraw the money yourself, even if you redeposit within 60 days, it gets reported to the IRS as a distribution and recontribution, creating unnecessary paperwork and potential for error. Most brokers make the direct transfer process pretty easy - usually just a form from the receiving broker.

Great question! I went through a similar transfer from Schwab to E*TRADE last year and was worried about the same thing. The good news is that for traditional IRAs with only deductible contributions, you don't need to track cost basis since all withdrawals will be taxed as ordinary income regardless. However, I'd strongly recommend creating your own records anyway - it's been incredibly helpful for me to have a clear history of all contributions, especially when dealing with any rollover from old 401(k)s. Keep track of contribution dates, amounts, and whether they were deductible or non-deductible (you'd know about non-deductible ones because you would have filed Form 8606). When you do the transfer, make sure it's a direct trustee-to-trustee transfer so the money never touches your hands - this avoids any tax reporting complications. Most brokers handle this smoothly, but having your own backup records gives you peace of mind for when you start taking distributions in 15 years.