Great question! As a small business owner myself, I went through this exact confusion when I started. Square Payroll does report to the IRS, but there are some important nuances depending on how you're set up. Since you mentioned you're running a home bakery and you're the only "employee" right now, you'll want to clarify your business structure first. If you're a sole proprietor paying yourself through Square as a contractor (1099-NEC), Square will report those payments to the IRS, BUT you'll still need to file Schedule C to report your total business income and expenses - this includes income from sources beyond just what you pay yourself through Square. If you've set yourself up as a W-2 employee of your own business, Square will handle payroll taxes and report your wages, but again, you'd still need to report the business's overall income and expenses. The key thing to remember is that Square reports what they process, but as the business owner, you're responsible for reporting ALL your business income (even cash sales, other payment processors, etc.) and claiming your business deductions. Square's reporting is just one piece of your overall tax picture. I'd recommend downloading copies of any tax forms Square generates during their review period and keeping detailed records of all your business income and expenses separate from what flows through Square Payroll.

For Square's tax form review process, you'll typically get email notifications when forms are ready for review (usually in late January for W-2s and 1099s). You can also check in your Square Dashboard under "Payroll" > "Tax Documents" - there's usually a section for "Year-end forms" where you can preview everything before it gets filed. The review period is usually about 2-3 weeks in January before Square submits to the IRS, so mark your calendar! During this time, you can catch any errors like the 1099 issue @James Johnson mentioned. Since you're sole proprietor taking cash at farmers markets, definitely track that income separately - I use a simple spreadsheet with date, amount, and source. That cash income goes on your Schedule C but obviously won't show up in Square's reporting. The IRS expects you to report ALL business income, not just what flows through processors. One more tip: if you do hire part-time help next year, get clear on worker classification BEFORE you start paying them. The IRS has a 20-factor test for employee vs contractor status, and getting it wrong can mean back taxes and penalties. Better to set it up correctly from the start!

I've been following this discussion with great interest since I'm in a very similar boat - took a beating on tech stocks in my IRA over the past couple years. What I've found helpful is treating this as a learning opportunity to build a more robust investment strategy going forward. One thing that's been on my mind reading through these responses: while we're all focused on the wash sale rules (which as others have clarified, aren't really an issue when selling IRA losses and buying in taxable accounts), I think the bigger opportunity here is using this rebalancing moment to implement better risk management practices. For instance, I've started using a core-satellite approach where I keep broad market index funds as my "core" holdings in both accounts, then limit my "satellite" speculative plays to a much smaller percentage that I can afford to lose. Wish I had done that before loading up on individual growth stocks and thematic ETFs! The silver lining of going through this painful experience relatively early in our investment timelines is that we still have decades to compound our way back. Plus, we're less likely to make the same concentration mistakes again. Sometimes the most expensive lessons are also the most valuable ones for long-term success.

This whole discussion has been incredibly helpful! As someone who also got burned on tech stocks in my IRA, I really appreciate everyone sharing their experiences and knowledge about wash sale rules. The clarification that selling at a loss in an IRA and then buying similar investments in a taxable account doesn't trigger wash sale issues is exactly what I needed to hear. I've been paralyzed for months trying to figure out the tax implications of rebalancing between my accounts. What really resonates with me is the point several people made about treating this as a learning opportunity rather than just focusing on recovering losses. I think I'm going to adopt that core-satellite approach that was mentioned - probably starting with a 90/10 split given how badly my concentrated tech bets performed. It's also reassuring to remember that with decades until retirement, we have plenty of time for these losses to become just a small footnote in our investment journeys. Sometimes you need to hear that from others who've been through similar situations. Thanks to everyone for sharing their insights and experiences!

I'm going through something similar right now! My divorce was finalized in August and I remarried in December. My ex keeps insisting we can both file as "married filing separately" since we were married for most of the year, but everything I've read says that's wrong. Reading through all these responses has been super helpful - especially hearing from the tax preparer that this is a common situation. The December 31st rule seems pretty straightforward when you put it that way. I think I'm going to try that Claimyr service someone mentioned to get direct confirmation from the IRS, since my ex won't listen to anything that doesn't come from an "official" source. Has anyone else dealt with a stubborn ex who just won't accept they need to file as single? Any tips for getting through to them without it turning into a huge argument?

I'm dealing with a very similar situation and this thread has been incredibly helpful! My divorce was finalized in July and I remarried in October. My ex has been adamant that we can both file as "married filing separately" because we were married for over half the year. After reading all these responses, especially from the tax preparer, I'm confident that we both need to understand the December 31st rule. It's actually pretty simple when you think about it - the IRS just looks at your status on the last day of the year, period. What really helped me was printing out IRS Publication 501 that someone mentioned earlier. It clearly states that if you're divorced under a final decree by December 31st, you're considered unmarried for the entire tax year. Having that official documentation in writing made a huge difference when discussing it with my ex. For anyone still dealing with a stubborn ex-spouse, I'd recommend getting that publication and highlighting the relevant sections. Sometimes people just need to see it in official IRS language to believe it. The key is approaching it as "let's both make sure we file correctly" rather than making it confrontational.

This exact same thing happened to me last year and I was so confused! SBTPG is totally legit - they're the company that processes refunds when you chose to have your tax prep fees deducted from your refund instead of paying upfront. What happens is the IRS sends your full refund to SBTPG first, then they take out the tax software fees plus their own processing fee (usually around $35-40), and then deposit the remainder to your account. That's why you got less than expected and why the timing is different from your DDD. It's actually pretty common for SBTPG deposits to hit a few days before the official direct deposit date. You should be all set - this is your actual refund, just processed through the third party!

This happened to me too and I was panicking! SBTPG is completely normal - they're the third-party processor that handles your refund when you choose to pay tax prep fees out of your refund. The IRS sends your full refund to them first, they deduct the tax software fees plus their own service fee (usually $35-40), then send you the rest. That's why your amount is less than expected. The timing can be different from your official DDD because SBTPG processes on their own schedule. I actually got my SBTPG deposit 3 days before my listed DDD last year. You should be all good - this is your real refund, just processed through the middleman you agreed to when filing!

As someone who's been doing delivery driving for a while, I'd suggest starting simple for your first year. Track your phone usage for a typical week or two to establish a baseline business percentage - don't just guess. For a $1350 iPhone used part-time for deliveries, you're probably looking at somewhere between 20-40% business use realistically. The key is being able to defend your percentage if questioned. Keep records of your delivery hours, and consider that business use includes not just active delivery time but also time spent checking for orders, navigating, and communicating with customers. For TurboTax, you'll enter this on Schedule C under "Other expenses" and create a line item for "Cell phone (business portion)". The software will walk you through whether to depreciate or take the immediate deduction based on your usage percentage. One tip: don't forget you can also deduct things like a phone mount for your car, charging cables you use while driving, and even a portion of your phone case if you bought it specifically for delivery work protection. These smaller items add up!

Great question about phone deductions! Just wanted to add a few practical tips from my experience doing gig work taxes: For tracking business vs personal use, I recommend keeping it simple but defensible. When you're actively logged into the delivery app and available for orders, that's clearly business time - even if you're multitasking with personal stuff. The IRS understands that modern phones are used for multiple purposes simultaneously. A reasonable approach is to calculate total hours you were "on shift" (logged into UberEats and available) versus total phone usage time. You don't need to track every minute perfectly, but having some logical basis helps. For your iPhone, since you only worked Oct-Dec 2024, make sure to prorate the deduction for partial year use. So if you calculate 30% business use, you'd take 30% of the phone cost, then multiply by 3/12 (the portion of the year you were working). Also remember that the monthly payments you're making can be deducted as they're paid, using the same business percentage. So each month you make a payment, you can deduct the business portion of that payment. Keep good records and be conservative but reasonable with your estimates. The IRS expects some judgment calls with mixed-use items like phones.