Just wanted to add something that might help other creators reading this - don't forget about quarterly estimated taxes! Since Patreon and other platforms don't withhold taxes like a regular employer would, you're responsible for paying estimated taxes throughout the year if you expect to owe $1,000 or more. I learned this the hard way my second year when my channel grew and I suddenly owed a big chunk at tax time plus underpayment penalties. Now I set aside about 25-30% of my creator income in a separate savings account and pay quarterly estimates. It makes tax season much less stressful! The IRS has a safe harbor rule where if you pay at least 100% of last year's tax liability through withholding and estimated payments (110% if your prior year AGI was over $150k), you won't owe penalties even if you end up owing more at filing time. This gives you some flexibility as your creator income fluctuates.

This is such a helpful thread! I'm in a similar situation with my podcast Patreon - made about $900 last year and was wondering the same thing about reporting requirements. One thing I wanted to add that I learned from my accountant: even though you need to report all income regardless of amount, there's actually a threshold for when you need to file Schedule SE (self-employment tax). If your net profit from self-employment is less than $400, you don't have to pay self-employment tax on it, though you still report the income on Schedule C. So for someone like you who made $1,350, if your business expenses bring your net profit below $400, you'd still report the income but wouldn't owe the additional 15.3% self-employment tax. That could be significant savings! Definitely worth tracking those software subscriptions and equipment purchases you mentioned.

This is such a helpful thread! I'm a new caregiver for my elderly father and just started receiving Medicaid waiver payments last month. I had no idea about Notice 2014-7 or how it affects the EIC calculation. Reading through everyone's experiences, it sounds like the key is being very explicit about what you're doing and why when you file. I'm planning to use the Form 8275 approach that Ravi mentioned, along with including that IRS FAQ reference from Freya. One question though - for those who successfully got this resolved, did you have to provide any specific documentation from the state Medicaid office, or were your regular payment statements sufficient? I want to make sure I have everything I need before I file to avoid the headache you all went through.

I've been dealing with this exact issue for two years now as a caregiver for my mom under our state's Medicaid waiver program. What I've learned is that you really need to be proactive about documentation from the start. Here's what has worked consistently for me: I always file with Form 8275 attached, clearly stating that I'm applying Notice 2014-7 to exclude the payments from gross income while including them for EIC calculation. I also include a cover letter that references both Notice 2014-7 AND the IRS FAQ that Freya mentioned - having both citations seems to help. The most important thing I learned is to keep detailed records of ALL your Medicaid waiver documentation - not just the payment statements. I keep copies of my initial eligibility determination, care plan updates, and any correspondence with the state office. When the IRS sees this comprehensive documentation, they seem to process it correctly without the automated system flagging it. Also, if you do get an adjustment notice like Paolo did, respond immediately with all your documentation. Don't wait - the longer you wait, the more complicated it gets to resolve. The IRS agents I've spoken with say these cases are much easier to fix when people respond quickly with proper documentation.

I went through this exact scenario two years ago and completely understand the frustration! Here's what I learned from my experience: First, don't panic - this is incredibly common and the IRS deals with forgotten 1099-INT forms all the time. Since you're voluntarily correcting it before they catch it through their matching system, you're in a much better position. I initially tried to do the 1040-X myself using the IRS instructions, but honestly found it confusing for something that should be straightforward. I ended up using my original tax software's amendment service (I had used FreeTaxUSA) and they charged me $15 to prepare the amended return. It automatically pulled all my original data and just had me add the missing interest income. The whole process took about 20 minutes, and I was able to e-file the amendment. I owed about $180 in additional tax plus around $8 in interest since I filed the amendment about 3 months after the deadline. No penalties because I was proactive about it. One tip: make sure you amend both federal AND state if your state has income tax. Many people forget about the state amendment and then get a notice later. Also, keep detailed records of when you filed the amendment in case you need to reference it later. The $100 your tax preparer wants to charge is highway robbery for such a simple change. You can definitely handle this yourself for much less!

I went through this exact situation last year with a forgotten 1099-INT from Marcus (Goldman Sachs online savings). The stress was real, but it turned out to be much more manageable than I initially thought! Here's what I learned: The IRS has a matching system that eventually catches these discrepancies anyway, so being proactive definitely works in your favor. I filed my amendment about 6 weeks after receiving the missing 1099-INT and avoided any penalties - just paid the additional tax plus about $12 in interest. I used TaxAct's amendment service since that's what I originally filed with, and it cost me $25. The software automatically imported all my original return data and guided me through adding the interest income. The whole process took maybe 30 minutes, and I could e-file it directly. One thing I wish someone had told me: keep checking the "Where's My Amended Return" tool on the IRS website after you file. It takes longer to process than original returns (usually 8-12 weeks), but at least you can track the status. Also, if you have direct deposit set up, they'll deposit any additional refund or charge any additional tax owed the same way. Your $650 interest income situation is very straightforward - don't let your tax preparer's $100 fee scare you into doing nothing. This is exactly the type of simple amendment that the tax software handles really well.

Can someone explain what happens if you just put $0 for this question? I've honestly never reported any use tax in my life and I buy stuff online constantly. Never had an issue with my returns. Is the IRS really going to come after me for not tracking every random purchase I make on the internet??

I totally get the confusion! I went through the same thing last year. Here's what I learned: that question is basically asking about "use tax" - which is what you owe on purchases where the seller didn't collect sales tax from you. Don't stress too much about tracking every single purchase perfectly. Most states know this is unrealistic for regular people. Here's what I'd suggest: 1. Check if your state offers a "safe harbor" amount - this is usually a flat fee based on your income that you can pay instead of calculating exact amounts 2. Focus on any big purchases you made from smaller online retailers (especially out-of-state ones) 3. Major retailers like Amazon usually collect sales tax everywhere now, so those probably aren't an issue For this year's filing, if you can't track everything perfectly, most people either use the safe harbor amount or make a reasonable estimate. The key is being honest and making a good faith effort. You're definitely not alone in finding this confusing - it's one of those tax questions that trips up tons of people!

Can I just double check - the person who is 19 can still file their own return even if they're claimed as a dependent by their parents, right? They would just check the "can be claimed as a dependent" box?

Just want to add another perspective here - I work as a tax preparer and see this situation all the time. Your brother definitely sounds like he qualifies as a qualifying relative dependent based on what you've described. One thing I always tell clients is to keep good records of the support you're providing. Since your parents are paying for housing, food, phone bill, etc., I'd recommend they keep receipts or bank statements showing these expenses. If the IRS ever questions the dependency claim, you'll want documentation that proves they provided more than half of his support for the year. Also, even though he's not working now, if your brother does get a job later in the year, just make sure his total gross income stays under $4,450 to maintain his qualifying relative status. If he goes over that threshold, your parents won't be able to claim him as a dependent for 2025.