This is a common situation that many people organizing informal fundraisers face. The key thing to understand is that the IRS cares more about the economic substance of transactions than the technical flow of funds. Since you're acting as a conduit rather than the beneficial owner of the money, you generally won't owe taxes on these funds - but you need to be prepared to prove that. Here's what I'd recommend: 1. Keep detailed records of every incoming Venmo transfer with donor names and amounts 2. Document the purpose of the fundraiser (emails, social media posts, etc.) 3. Get a receipt from the charity showing the final donation amount and date 4. If you receive a 1099-K from Venmo, you can file Form 1040 with an explanation that these were pass-through funds, not income For the person receiving the final transfer, they should also document that this was collected money being donated on behalf of others, not a personal gift from you. They'll be able to claim the charitable deduction, but ethically they might want to coordinate with the original donors about this. The cleanest approach for future fundraisers would be to have people donate directly to the charity or use a platform designed for this purpose, but your current setup isn't uncommon and can be handled properly with good documentation.

Great question! I had a similar situation when I organized a fundraiser for our local food bank last year. One thing that helped me sleep better at night was creating a simple spreadsheet tracking every donation - date received, donor name (if they were comfortable sharing), amount, and any notes from the Venmo transaction. I also sent a group message to all the donors explaining that the final donation would be made by [person's name] but was funded by everyone's contributions. This way there was transparency about who would be claiming the tax deduction, and some donors were able to make direct donations to get their own receipts if they preferred. The person who made the final donation should definitely keep the charity's receipt, but consider asking the charity if they can provide a letter acknowledging that the donation came from a group fundraising effort. Some organizations are willing to do this, which helps document the true source of the funds. Also worth noting - if this becomes a regular thing you do, you might want to look into becoming a registered fundraiser in your state, as some states have requirements for people who regularly collect charitable donations on behalf of others.

You might wanna check if someone claimed you as a dependent maybe? My cousin had something similar happen and it turned out her parents had claimed her on their taxes even though she was filing independently. Could be worth asking family members?

Wow, that's a perfect example of how these small debts can spiral out of control! A $75 parking ticket growing to over $4,000 is absolutely insane but unfortunately very common with municipal collections. For anyone else reading this thread, this is why it's so important to address any tickets, fines, or government notices immediately - even if they seem small. Once they go to collections, the fees and interest can multiply the original debt by 10x or more. Omar, you might want to contact the original issuing agency (probably your city or county) to see if they have any hardship programs or payment plans. Sometimes they'll reduce the collection fees if you can pay the original amount plus reasonable costs. It's worth a shot since $4,000 for a parking ticket is pretty excessive. Also, make sure to get documentation of the payment once you resolve this so it doesn't happen again next year!

I went through this exact same process about 6 months ago and can confirm what others have said - the sequence is crucial. I made the mistake of overthinking it initially and got stuck in analysis paralysis. Here's what I learned from my experience: 1. The IRS EIN application system is designed around legal entity types, not tax elections. So when you see "LLC" vs "S Corporation" options, they're asking about your legal structure, not your tax treatment. 2. Apply for your EIN using "Limited Liability Company" and your full legal name including "LLC". Don't try to work around the system by omitting "LLC" or using a DBA - this could create complications later. 3. The online EIN application really does give you the number immediately in most cases. I was surprised by how fast it was. 4. File Form 2553 as soon as you get your EIN. Don't wait - the 2 month 15 day deadline is firm, and while there's late election relief available, it's better to just file on time. One thing I wish I'd known: make sure your LLC Operating Agreement doesn't have any provisions that would disqualify you from S Corp treatment (like disproportionate distributions or more than 100 members). It's worth reviewing this before you file the election. The whole process took me less than a week once I understood the proper sequence. Good luck with your application!

I just went through this exact process last month and wanted to share what worked for me since I see a lot of great advice here but also some confusion in the comments. The key insight that finally clicked for me: the EIN application asks about your LEGAL entity structure, while Form 2553 is about your TAX election. These are completely separate things, which is why the IRS website seems confusing when you're trying to do both at once. Here's exactly what I did: 1. Applied online for EIN selecting "Limited Liability Company" - used our full legal name including "LLC" 2. Got the EIN instantly (literally took 10 minutes total) 3. Downloaded Form 2553 from IRS website 4. Had both LLC members sign it 5. Mailed it certified mail the next day One thing I'll add to what others have said: make sure you understand the "reasonable compensation" requirements once your S Corp election is effective. As an S Corp, you'll need to pay yourself a reasonable salary (subject to payroll taxes) before taking distributions. This is something to budget for since it affects your cash flow. The whole thing was much simpler than I expected once I stopped overthinking it. The IRS systems actually work pretty well when you follow the proper sequence!

Has anyone here actually gone through with a large Roth conversion in a low income year? I'm considering doing about $35k conversion but I'm worried I'll regret it when tax time comes.

This is exactly the kind of situation where proper tax planning can save you thousands! With your $41k income and massive capital losses, you're actually in a unique position. While those losses can't directly offset Roth conversion income (as others mentioned), your low current income means you're in a great tax bracket for conversions. I'd strongly recommend running the numbers on converting enough to fill up your 12% tax bracket - probably around $8k based on your current income. Even though you'll pay taxes on the conversion, you're essentially "prepaying" taxes at today's lower rates rather than potentially higher rates in retirement. The key insight here is that your capital losses will carry forward for years, giving you ongoing $3k annual deductions against ordinary income. This means your effective tax rate might be even lower than the bracket suggests. Don't let the losses go to waste - use this low-income year strategically for tax-advantaged growth!

Has anyone used TurboSelf-Employed for this situation? I'm wondering if it catches these kinds of deductions or if I need to use a different software for my meditation teaching side gig...

Great question! As someone who's dealt with similar self-employment tax situations, I can confirm that your meditation workshop expenses would likely qualify as legitimate business deductions on Schedule C. Since you're teaching meditation techniques and getting paid for it, attending workshops to improve those same skills has a clear business purpose. The key is that the training must be "ordinary and necessary" for your current work - which it sounds like it is. A few important points to keep in mind: - Document everything: Keep receipts, workshop descriptions, and notes on how the training improved your teaching abilities - The business connection needs to be direct - you're learning techniques you actually use with clients - It's totally normal for business expenses to exceed income in some periods, especially for seasonal work like retreats Just make sure you're treating this as a legitimate business (not a hobby) and maintaining good records. The fact that you're actively earning income from multiple centers and have been doing this for 2 years helps establish business intent. Consider keeping a simple log of how you applied what you learned in your actual teaching sessions - that documentation could be valuable if questions ever come up.