Quick question - does anyone know if we'd be better off just filing without claiming our adopted child and then doing an amended return later when the SSN comes? Our tax guy suggested this but I've heard amended returns can trigger audits?

I went through this exact situation two years ago when we adopted our son! The waiting for the SSN while tax season loomed was so stressful. Just want to echo what others have said - definitely go with the extension rather than filing without claiming your daughter and amending later. One thing I wish someone had told me is to gather all your adoption-related documents now while you're waiting. Things like court documents, attorney fees, agency fees, home study costs, travel expenses if you had any - these can all potentially qualify for the Adoption Tax Credit. Having everything organized made filing so much smoother once we finally got that SSN. Also, don't be surprised if your refund ends up being significantly higher than you initially calculated. Between the Child Tax Credit, potentially the Adoption Tax Credit, and any other credits you might qualify for, we were pleasantly shocked at our final refund amount. The wait was definitely worth it to file one complete, accurate return!

Just to add some additional context - the "P" code tells the software that this is a distribution from a Roth IRA, while the "J" indicates it's specifically a return of excess contributions that happened within the allowable timeframe (which is why you only have a small taxable amount on your earnings). Remember that only the earnings portion is taxable when you properly remove excess contributions, which matches your situation where box 2a is only showing about $270 taxable on a $7,800 distribution. The system should handle this correctly once you select the proper options.

This is really helpful information everyone! I'm dealing with a similar situation but my 1099R has code "G" - does anyone know how that should be handled? I had to take an early withdrawal from my traditional IRA due to financial hardship, and I'm not sure if freetaxusa.com will handle the hardship exception properly when I enter the distribution information. Also, for those who successfully resolved their PJ code issues - did you end up owing any additional taxes beyond what was already withheld, or did the software calculate everything correctly once you selected the right options?

Anyone know if a $0 conversion affects the 5-year rule for Roth IRA withdrawals? Like if I convert my empty Traditional IRA to Roth now, then make actual contributions in a few months, does the 5-year clock start now or when I make my first contribution?

Just to add another perspective here - I went through this exact situation last year and wanted to share what I learned. Even though you're converting $0, make sure to keep really good records of the conversion date and any paperwork from your custodian. The IRS likes to see a clear paper trail, especially for retirement account transactions. I'd recommend taking screenshots of your account before and after the conversion showing the $0 balance, and saving any confirmation emails or letters from your bank/brokerage. This documentation becomes super helpful if you ever need to prove the conversion happened and when it occurred. Also, double-check with your custodian about any fees for the conversion process itself. Some institutions charge administrative fees even for $0 balance conversions, which could actually result in a negative balance that you'd need to cover. Better to know upfront than get surprised later!

Honestly the tax system is such a nightmare for gig workers. I do delivery driving, tutoring, handyman work, and online surveys and keeping track of everything is ridiculous! Does anyone use a specific app to track all their different income streams?

Just to add another perspective - I've been doing multiple side hustles for about 3 years now and learned this the hard way my first year. You absolutely need to report ALL income, even if it's just $20 from a random odd job. The $600 thing that confuses everyone is just about when companies are required to send you tax forms, not when you're required to report. What really helped me was setting up a simple spreadsheet at the beginning of each year with columns for date, source, amount, and any expenses. I update it weekly so I don't forget anything. Even for cash jobs where there's no paper trail, I still log it. The IRS expects you to track and report everything, and honestly it's not worth the risk of an audit over unreported income. For your eBay sales of personal items, as long as you're selling them for less than you paid originally, that's not taxable income since there's no profit. But your delivery driving, streaming tips, and creator earnings all need to be reported regardless of the amounts.

OK, small business tax advisor here who specializes in e-commerce. Everyone's given good advice, but I want to clarify one thing: What matters is your ACCOUNTING METHOD. If you use the cash basis accounting method (most small Etsy/Amazon sellers do), then you generally deduct expenses when you pay them. BUT supplies that create an asset with usefulness beyond the tax year are an exception. Forever stamps absolutely fall into that category since they don't expire. You need to deduct them as you use them, regardless of when you bought them. This is called the "12-month rule" in tax speak.

Thanks everyone for all the detailed responses! This has been incredibly helpful. Based on what I'm reading, it sounds like my original idea of buying $25K worth of stamps was way too aggressive and would likely raise red flags with the IRS. I think I'll stick closer to what Miguel and Zainab suggested - maybe buy 6-12 months worth at a time based on my actual usage patterns. Last year I spent about $10K on postage, so maybe I'll do a $5K bulk purchase of Forever stamps at the end of this year and track usage carefully. The storage concerns Miguel raised are definitely something I hadn't considered either. I live in Florida so humidity is always an issue - definitely don't want thousands of dollars worth of stamps getting ruined! Has anyone used a specific system or app to track stamp usage over time? I want to make sure I have good documentation in case of an audit.