My tax advisor gave me conflicting information on this last year! She said my spouse needed to show at least some profit from self-employment for us to use my Dependent Care FSA. We ended up not using the FSA and just took the tax credit instead, which worked out better for us anyway since we have 2 kids and high childcare costs. Have you compared whether the FSA or the tax credit would be better in your situation? Sometimes the tax credit can be more beneficial, especially if your spouse might have little/no income.

I went through this exact situation when my husband started his consulting business in 2022. The key thing I learned is that the IRS doesn't require a minimum profit amount for your spouse to be considered "gainfully employed" for Dependent Care FSA purposes. What matters is that they have a legitimate business with profit intent. Even if your spouse shows a loss in 2023 due to startup costs, as long as they're genuinely operating a business (keeping records, spending time on it, marketing, etc.), they qualify as self-employed. However, your FSA contribution limit will be capped at their net earnings for the year. One thing to consider: if your spouse expects to have minimal or negative income in the year you want to use the FSA, you might want to compare the FSA benefit against taking the Child and Dependent Care Credit instead. The credit doesn't have the same earned income limitation and might be more beneficial in your situation. Also, make sure your spouse keeps detailed business records - receipts, time logs, business plan, etc. This documentation will be crucial if the IRS ever questions whether it's a legitimate business versus a hobby. Good luck with the new business venture!

When this happened to me, I just resubmitted the payment and included a brief letter explaining what happened. I did get hit with a small penalty (like $25 or something) but it wasn't worth fighting over. The important thing is just to get that payment in ASAP and move on with your life! The IRS is usually reasonable as long as you're making an honest effort to fix the problem.

I had a similar situation happen to me about two years ago with a quarterly payment that got flagged by my bank's fraud system. The stress is totally understandable, but you're going to be fine! Here's what worked for me: I immediately resubmitted the payment through EFTPS and included a simple cover letter explaining that the original payment was declined due to a bank error. I also attached the email notification from the IRS about the bounced payment and a brief statement from my bank acknowledging their mistake. The key is acting quickly - I got my resubmission in within 3 days of discovering the issue. The IRS ended up waiving the penalty completely under their "reasonable cause" provisions since I could demonstrate it wasn't due to negligence on my part. Don't overthink it - just get that payment resubmitted today if possible, keep all your documentation, and you should be good to go. The IRS deals with bank errors all the time and they're generally fair about it when you can show it wasn't your fault.

I really appreciate everyone's detailed responses here! As someone new to dealing with these types of income sources, this has been incredibly helpful. It sounds like the consensus is pretty clear - my CPA's advice was wrong and potentially risky. I'm definitely going to report everything properly. Better to be safe than sorry, especially since we're not talking about huge amounts anyway. The distinction between what companies have to report versus what I have to report makes total sense now. One quick follow-up question though - for those referral bonuses from Chase and other credit cards, do I need to keep any special documentation beyond just recording the amounts? Like screenshots of the bonus notifications or anything like that?

Thanks for bringing up this important question! As a newcomer here, I've been lurking and learning a lot from these discussions. Your situation really resonates with me because I've been collecting various small income streams too - mostly from cashback apps, credit card bonuses, and some freelance work. Reading through all these responses has been eye-opening. I had no idea that the "no 1099 = don't report" advice was actually incorrect. I've been following similar logic with my own small earnings, thinking that since Rakuten and other companies weren't sending me tax forms, I was in the clear. It's concerning that a CPA would give advice that could potentially get clients in trouble. Makes me wonder if I should get a second opinion on some tax advice I received last year. The distinction everyone's explaining between company reporting requirements and individual tax obligations makes perfect sense when you think about it logically. I'm definitely going to start keeping better records of all these small income sources going forward. Better to over-document than under-document, especially as these amounts add up over time.

Something else to consider - if you'll be making decent money with Instacart, you might want to look into forming an LLC and electing S-Corp status. My wife has a regular job and I do gig work, and this setup saved us thousands. With an S-Corp, you pay yourself a reasonable salary (which is subject to self-employment tax) but can take the rest as distributions that aren't subject to SE tax. You have to file more paperwork and run payroll, but the tax savings can be substantial if you're earning enough.

As someone who's been doing gig work while my spouse has a regular W-2 job, I wanted to add a few practical tips that helped us navigate this exact situation: First, don't stress too much about the tax complexity - it's really not as scary as it seems at first! Your husband's income stays taxed normally, and only your Instacart earnings get hit with self-employment tax. Here's what I wish I'd known starting out: 1. Open that separate savings account IMMEDIATELY and automate transfers. I set up my bank to automatically move 30% of any Instacart deposit to my "tax account." This prevented me from accidentally spending tax money. 2. Download a mileage tracking app on day one. I use MileIQ but there are free options too. Starting and stopping it becomes second nature, and those deductions really add up. 3. Keep ALL your receipts - insulated bags, phone chargers, hand sanitizer, even car washes if you're keeping your car clean for customers. These business expenses reduce your taxable income. 4. Consider making your first quarterly payment even if you think you might not owe much. It's easier to get a refund than deal with penalties. The good news is that doing this temporarily for debt payoff (like your situation) keeps things much simpler than if you were planning to make this a full-time business. You've got this!

Since u dont have to worry about penalties anymore, consider looking into short-term health plans to cover the gap between jobs. Way cheaper than COBRA. Just be aware they don't cover pre-existing conditions and aren't comprehensive like ACA plans. But for a few months of basic coverage against emergencies, it's better than nothing!

Great question! You're absolutely right - there's no federal penalty for not having health insurance starting from the 2019 tax year. However, I'd strongly recommend looking into your options during the gap period anyway. Since you mentioned you're between jobs, you might qualify for a Special Enrollment Period on healthcare.gov if you recently lost employer coverage. This could make marketplace plans more affordable than you think, especially if your income qualifies you for premium tax credits. Also consider that even a basic catastrophic plan could save you from financial disaster if something unexpected happens. Medical debt is still one of the leading causes of bankruptcy, even for people who thought they were being smart by saving the premium money. When you do start your new job, make sure to sign up for their health insurance right away during your eligibility period - don't wait for the next open enrollment!