I'd also recommend your cousin start keeping detailed records now if he hasn't already - not just for this year's taxes, but for future audits. The IRS can go back 3-6 years (or longer in cases of suspected fraud), so having organized records of income and expenses is crucial. Since he's essentially running a business, he should consider opening a separate business checking account and getting a business credit card for expenses. This makes tracking so much easier and looks more professional if he ever gets audited. Plus, many business credit cards offer cash back on tools and supplies. One more thing - if he's planning to continue this handyman work, he might want to look into getting proper business insurance. If he gets injured on a job or accidentally damages someone's property, personal insurance might not cover it since it's business activity.

Just to add another perspective - I'm a tax preparer and see this situation constantly. Your cousin definitely needs to report this income, but the good news is that with $35k in handyman income, he'll likely qualify for significant business deductions that can really reduce his tax burden. One thing I always tell clients in similar situations: don't panic about past compliance issues. The IRS has voluntary disclosure programs and payment plans if someone realizes they've underreported income in previous years. It's always better to come forward proactively than to wait and hope they don't notice. Also, since he's essentially running a handyman business, he might want to consider whether forming an LLC makes sense for liability protection and potential tax benefits. At $35k annually, it's definitely worth exploring with a tax professional. The key is getting organized now and establishing good record-keeping habits going forward. This kind of side work can be very tax-efficient if handled properly with all the available deductions for tools, vehicle expenses, and other business costs.

I went through this exact same nightmare last year! My solo 401k hit $265k and suddenly I'm getting letters about Form 5500 requirements. My CPA basically said "figure it out yourself" which was incredibly frustrating given what I pay him. After a lot of research and trial and error, here's what I learned: your CPA isn't necessarily being lazy - Form 5500 filings really are a specialized area that most general tax preparers don't handle. It's like asking your family doctor to perform brain surgery - technically they're both medical professionals, but it's just not their specialty. The good news is that for solo 401k plans, the filing requirements are much simpler than the horror stories make them sound. You're not dealing with discrimination testing, complex participant data, or most of the schedules that make these forms nightmarish for larger plans. I ended up filing mine through the DOL's EFAST2 system after getting my questions answered by an IRS specialist. Total cost was minimal compared to the $1,200+ quotes I was getting from TPAs. The first year is definitely a learning curve, but now I feel confident handling it myself going forward. Don't let the initial overwhelm push you into paying thousands for something you can absolutely handle yourself with the right guidance!

I'm dealing with this exact same situation right now! My individual 401k with Schwab just hit $255k and I had no idea about Form 5500 requirements until I started researching. Like you, my CPA basically said "not my problem" and suggested I find a specialist, which was frustrating since I thought this would be part of normal tax services. Reading through all these responses has been incredibly helpful - especially learning that solo 401k filings are much simpler than the complex multi-participant plans that scare most CPAs away. The combination approach of using Claimyr to get direct IRS guidance first, then filing through the DOL's free EFAST2 system seems like the perfect solution. It's honestly ridiculous that Schwab and other custodians don't provide better guidance on compliance requirements when you hit these thresholds. They're happy to collect fees but leave you hanging when it comes to the paperwork side. At least now I know I'm not alone in dealing with this and that it's absolutely manageable without paying thousands to a TPA! Thanks everyone for sharing your experiences - this thread is going to save me a ton of money and stress.

I just went through the ID.me verification process last month and wanted to share my timeline to give you hope! I completed verification on September 15th and got my refund deposited on October 8th - so about 3.5 weeks total. Like others have mentioned, the transcript is definitely your friend during this waiting period. I saw movement on my transcript about 10 days after verification with some processing codes, and then the 846 refund code appeared about a week before I actually got the deposit. One thing I noticed is that the IRS seems to process verified returns in batches, so timing can depend on when your return hits their queue. Since you filed in April originally, your return is probably already in their system and just needs to go through the post-verification processing steps. The IP PIN is definitely worth getting - it's free and will save you potential headaches next year. I set mine up right after I got my refund and it was super easy. Hang in there! The 9 week timeline is their conservative estimate, but most people I know who had straightforward verification situations got their refunds in 3-6 weeks.

I went through this same process earlier this year and can share some realistic expectations. Completed ID.me verification in March and got my refund in May - so about 8 weeks total, which was closer to their worst-case timeline unfortunately. A few things I learned during the process: - The Where's My Refund tool is basically useless during this waiting period. It just says "being processed" forever - Your transcript is where you'll see actual progress. Look for codes like 971 (notice issued), 570 (account frozen), 571 (account unfrozen), and eventually 846 (refund scheduled) - The timeline really depends on what triggered your verification and how backed up they are when your case hits the queue Since you filed in April and just completed verification in October, you've already been waiting quite a while. The good news is that your return is already in their system, so it should just need to go through the post-verification review process. I'd definitely recommend getting that IP PIN they mentioned - it's free and will protect you from identity theft issues in future tax seasons. Won't speed up your current refund, but it's good peace of mind. Try to be patient (easier said than done, I know!) and check your transcript weekly for updates. Good luck! 🤞

This is a great question that many parents face when their kids withdraw from college! As someone who went through a similar situation, I can share what I learned. The Box 4 amount on a 1098-T represents "adjustments made for a prior year" - essentially corrections or changes the school made to your son's 2022 account that they processed in 2023. This could be anything from a late scholarship payment, a housing deposit credit, or even a billing correction. The key thing to understand is that since you didn't claim any education credits on your 2022 taxes, this adjustment likely won't affect your tax situation at all. The IRS requires schools to report these adjustments even when the student is no longer enrolled, which is why you're seeing a 2023 form. I'd suggest checking your son's student account portal for any transactions from early 2023 that reference his 2022 semester. You might also want to look at his bank statements to see if there were any small refunds he might not have mentioned. Many students don't realize these types of adjustments are happening behind the scenes. If you really want peace of mind, you could always consult with a tax professional, but based on what you've described, it sounds like this is just administrative bookkeeping that won't impact your taxes.

I had a very similar experience with my daughter last year! She withdrew from her university in December 2022, and we received a 2023 1098-T with only Box 4 filled out for about $2,100. I was completely baffled at first. After finally getting through to the bursar's office (took forever!), I learned that the Box 4 amount was from a combination of things: her meal plan refund that was processed in January 2023, plus a partial refund of student fees since she withdrew before the semester officially ended. Even though these refunds related to her 2022 attendance, they were processed in 2023, so that's the year they had to report it. The good news is that since you didn't claim any education credits for 2022, this shouldn't create any tax complications for you. The Box 4 adjustment actually reduces the qualified education expenses that were previously reported, but if you weren't using those expenses for tax benefits anyway, it's essentially a non-issue. I'd still recommend getting the specific details from your son's school just to satisfy your curiosity, but from a tax standpoint, you can probably stop worrying about this!

I don't understand why TreasuryDirect makes this so confusing! I've had an I-bond sitting in my gift box for almost 2 years because I was afraid of messing up the taxes. Has anyone actually gone through an audit where this came up? I'm worried about doing it wrong and getting in trouble.

I went through this exact same situation with my son's I-Bond last year. The key thing to remember is that as long as the bond is sitting in your TreasuryDirect gift box, you're still the legal owner for tax purposes. The "gift" designation is just for tracking - it doesn't actually become a completed gift until you deliver it to her account. Since you mentioned you're planning to complete the transfer soon, here's what I'd recommend: if you've been using the deferral method (not reporting interest annually), just transfer it now and all the accumulated interest responsibility will transfer to your daughter when she eventually redeems it. Make sure to keep a record of the transfer date for your records. The good news is that since I-Bond interest is exempt from state taxes in California anyway, you don't have to worry about any state-specific complications. Just focus on the federal treatment, and you'll be fine.