Does anyone know if taking the earned income tax credit increases audit risk? I qualify this year but I've heard the IRS targets EITC claims a lot.

This is really helpful information! I'm a freelance graphic designer and have been worried about audit risk since my income has been pretty inconsistent year to year. Some months I make great money on big projects, other months it's really slow. One thing I've learned from my accountant is that keeping detailed contemporaneous records is absolutely critical. I now use a separate business checking account for ALL business expenses and income, and I photograph every receipt immediately using an app that uploads to cloud storage. For anyone who works from home, be really careful with that home office deduction. The IRS is strict about "exclusive use" - that room has to be used ONLY for business, not as a guest bedroom that sometimes has a desk in it. I ended up not claiming it because my home office doubles as my art studio for personal projects. Also, if you're self-employed, consider making quarterly estimated tax payments even if you're not required to. It shows good faith effort to comply and can help avoid penalties if you end up owing at filing time. Plus it's easier to manage cash flow than getting hit with a huge tax bill all at once.

One thing nobody has mentioned yet - the self-employment tax might seem painful now, but remember half of it is deductible on your federal return. Also, paying self-employment tax means she's building Social Security credits for retirement. If she consistently avoids self-employment tax by using Schedule 1 incorrectly, she could find herself with reduced Social Security benefits in retirement. Plus, proper Schedule C filing allows her to deduct legitimate business expenses related to her athletic activities - equipment, travel to events, training costs, etc. This can often offset a significant portion of the self-employment tax burden.

Based on all the great advice here, it sounds like you definitely need to file your sister's 1099-NEC income on Schedule C with self-employment tax. I went through something similar with my freelance graphic design work - my accountant initially suggested Schedule 1 to "save money" but after doing more research, I realized that was completely wrong. The fact that your dad filed it incorrectly last year and didn't get caught doesn't mean it was right - as Miguel mentioned, the IRS often catches these things later with automated matching. Better to file correctly now than deal with penalties and back taxes later. One practical tip: make sure to track all her business expenses related to her athletic activities throughout the year - training equipment, travel to competitions, coaching fees, etc. These deductions on Schedule C can really help offset that self-employment tax burden. I wish I had started tracking my business expenses earlier!

Use TurboTax or FreeTaxUSA - they make it super easy to enter even tiny W-2s like this. Takes maybe 2 minutes and saves all the worry. I had a similar situation with a $45 W-2 last year and just entered it to avoid any headaches.

Just to add another perspective - I work in payroll and can confirm that employers are required to issue W-2s for any amount of wages paid, even if it's just $24.50. The lack of federal tax withholding is completely normal for such a small amount - the withholding tables are designed so that very low earnings don't trigger federal income tax withholding. However, as others have mentioned, you absolutely should report this income. The IRS receives copies of all W-2s electronically, and their automated matching system will flag your return if there's a discrepancy. Even though the actual tax impact might be zero (depending on your total income), omitting it could trigger correspondence that's way more hassle than just including it. Pro tip: If you're using tax software, it will automatically calculate whether this small amount actually affects your tax liability. In many cases, it won't change what you owe or your refund amount, but reporting it keeps you compliant and avoids potential issues down the road.

DETAILED EXPLANATION OF 810 FREEZES AND SOLUTIONS: An 810 freeze is basically the IRS's fraud prevention system flagging your return. Here's what you need to know: - These freezes are WAY more common in 2023-2024 due to increased identity theft - Average resolution time is 60-120 days, despite them saying 180 - Your withholding and credits look normal, so this should resolve automatically - DO NOT call multiple times, it doesn't help Pro tip: Instead of stressing daily, use taxr.ai to analyze your transcript. It'll give you a precise timeline and explanation of what's happening. It costs $1 but saves hours of research and anxiety. I've seen it predict release dates with scary accuracy. Source: Been dealing with these freezes for years as a tax consultant.

Been in the exact same situation! Filed 1/28, got the 810 freeze 2/3, and I'm sitting here 8 weeks later still waiting. My transcript looks almost identical to yours - $11,200 refund, HoH filing, clean W-2 withholdings, no penalties or interest. The waiting is brutal especially when you can see everything is correct on the transcript. I've called twice and they just repeat the same "wait for the letter" script. At least your processing date of March 13 means they've actually looked at it - mine is still showing as received but not processed. Seeing people say it cleared after 92 days gives me some hope though. Hang in there - we're all in this together! 💪

I'm a freelance photographer who does a lot of outdoor events and I've been wondering about this same issue with specialized equipment deductions. After reading through all these responses, I'm realizing I should probably be more systematic about documenting my gear usage. I have professional-grade polarized sunglasses that I only use during outdoor shoots because they help me see my camera LCD screen better in bright conditions - regular sunglasses create too much color distortion when I'm trying to check exposure and white balance. They cost about $200 and I literally keep them in my camera bag, never wear them casually. The insurance documentation angle that Connor mentioned is really interesting - my professional liability insurance actually has specific language about proper equipment use and safety protocols. I'm going to reach out to them about getting something in writing regarding protective eyewear for outdoor photography work. Thanks everyone for sharing your experiences and documentation strategies. It's clear that having detailed records and being able to demonstrate the specialized nature of the equipment is key to making these deductions stick.

As a tax preparer who's handled numerous Schedule C returns, I want to emphasize something that hasn't been fully addressed yet - the IRS Publication 535 specifically mentions that protective equipment can be deductible when it's required for your occupation and not suitable for general wear. For your situation as a fishing guide, the key factors working in your favor are: 1) You spend the majority of your work day exposed to water glare, 2) Your eye doctor specifically recommended them for occupational use, 3) You have separate personal sunglasses, and 4) The polarized feature serves a specific anti-glare function critical for water safety. I'd recommend keeping that doctor's recommendation letter, receipts for both work and personal sunglasses, and a simple log showing business use. Also consider getting a statement from your professional fishing guide association or licensing body about recommended safety equipment - this adds industry standard validation. The $175 cost is reasonable for specialized marine eyewear and shows you're not being excessive. Just make sure you can clearly articulate why these specific glasses are necessary for your business operations rather than just convenient or preferred.