If you have any capital gains from investments, check if you have any losing positions you could sell to offset those gains. Tax-loss harvesting can reduce your AGI by up to $3,000 against ordinary income after offsetting capital gains. Just watch out for wash sale rules if you plan to rebuy similar investments.

Don't overlook estimated tax payments if you haven't made them yet! If your unexpected income means you'll owe more than $1,000 when you file, you might face underpayment penalties. Making a large estimated payment by January 15th (for Q4) can help reduce penalties and effectively gives you a bit more time to implement some of these AGI reduction strategies. Also, since you mentioned self-employment income - make sure you're deducting the employer portion of your self-employment tax (Schedule SE). This is an above-the-line deduction that directly reduces AGI and many people forget about it. It's roughly half of your total self-employment tax liability. One more thing - if you haven't already, consider timing any business income or expenses. If you're on cash basis accounting (most small businesses are), you might be able to defer some December invoice payments until January or accelerate some January business expenses into December to help balance things out.

I'd really recommend taking a basic small business tax course. I did one at my community college for like $75 and it was soooo worth it. LLC taxation isn't actually that complicated once someone explains it to you in plain English. Also, get a separate business bank account ASAP if you haven't already! Makes tracking business income and expenses 1000% easier come tax time. I learned that lesson the hard way my first year lol.

As someone who went through this exact same confusion when I started my LLC two years ago, I totally feel your pain! Here are the key things I wish someone had told me upfront: 1. **Get that EIN immediately** - Even though Isabella mentioned you don't technically need one as a single-member LLC, get it anyway. It's free, takes 5 minutes online, and you'll need it for your business bank account (which you absolutely should open ASAP). 2. **Start making quarterly payments NOW** - With $42k in revenue, you're definitely going to owe taxes. The IRS wants 25% of last year's tax liability or 90% of this year's. Since this is your first year, estimate around 25-30% of your profit for federal taxes plus self-employment tax. 3. **Track EVERYTHING** - That laptop and hosting are definitely deductible. So are your phone bill (business portion), internet, office supplies, software subscriptions, even mileage to meet clients. I use a simple spreadsheet or app like QuickBooks Self-Employed. 4. **Home office deduction** - If you use part of your home exclusively for business, you can deduct it. Either use the simplified method ($5/sq ft up to 300 sq ft) or calculate actual expenses. The Schedule C really isn't that scary once you see it - it's just business income minus business expenses equals profit, then that profit goes on your 1040. You've got this!

Important point that nobody has mentioned yet - if you're regularly dealing with large cash transactions like this, you should consider setting up a more formal business structure and possibly getting a tax professional. Form 8300 requirements are just one aspect of cash business compliance - there are also state reporting requirements in some locations that kick in at different thresholds.

One thing I haven't seen mentioned yet is that you should also be aware of the timing requirements for Form 8300. You have to file it within 15 days of receiving the cash payment (or the final payment if it's a series of related transactions). This is crucial because there are penalties for late filing, even if it's just a few days late. Also, don't forget that you're required to provide a written statement to the customer by January 31st of the year following the year you filed the form. Many small business owners miss this requirement, but it's just as important as filing the form itself. For your phone flipping business, I'd recommend setting up calendar reminders for both the 15-day filing deadline and the January 31st customer notification deadline. Missing these deadlines can result in penalties that really add up, especially if you're filing multiple forms throughout the year.

Maya, you're definitely not alone in this situation! The good news is that you're being proactive about fixing it. Based on what others have shared here, you should still be able to amend your 2019 return, though time may be getting tight depending on when you originally filed. For your $8,400 in freelance income, you'll need Form 1040-X to amend, plus Schedule C for the business income and Schedule SE for self-employment tax (which will be around 15.3% of your net earnings). Don't forget that you can also deduct legitimate business expenses from that freelance work - things like software subscriptions, equipment, even a portion of your home if you had a dedicated workspace. The key is to file as soon as possible. Since you're voluntarily coming forward, you have a much better chance of getting penalties reduced or waived, especially if you have a clean tax history. The IRS tends to be more lenient with people who self-report mistakes rather than those they catch through audits or matching programs. Keep all your payment records and any receipts for business expenses. The fact that you found these records while cleaning shows you weren't trying to hide anything - just document that timeline in case they ask. You've got this!

Maya, I went through almost the exact same situation last year with my 2020 return! I had forgotten about some consulting income and was terrified about the consequences. Here's what I learned from the experience: First, breathe - you're doing the right thing by coming forward voluntarily. The IRS really does treat self-disclosure much more favorably than when they catch unreported income through their matching systems. For your situation, you'll definitely need Form 1040-X, Schedule C for the freelance income, and Schedule SE for self-employment tax. But here's something important that others touched on - make sure you're calculating your NET earnings for the SE tax, not the gross $8,400. Any legitimate business expenses you had (software, equipment, even mileage to client meetings) can reduce that amount. I ended up owing about $1,800 in additional tax plus interest, but I successfully got the penalties waived through first-time abatement. The key was explaining in my cover letter that it was an honest oversight, not intentional tax avoidance. One practical tip: gather your documentation now while you're motivated. I procrastinated for months out of anxiety, which just made the interest accrue longer. The sooner you file the amendment, the sooner the interest stops growing. You've got this! The hardest part is realizing the mistake - fixing it is actually pretty straightforward.

Has anyone noticed if certain tax software seems to have more or fewer of these "system issues"? I used TurboTax and I'm stuck in limbo too. Wondering if I should use something else next year.

I'm dealing with the exact same issue! Filed on February 2nd, accepted February 5th, and it's been radio silence since then. Called the IRS last week and got the same "system issue" explanation with the 10-week timeline. What's really frustrating is that when I check my tax transcript online, it shows my return was received but there are no processing codes or updates at all - just blank. It's like my return disappeared into a black hole somewhere in their system. I've been reading through all these comments and it seems like there are multiple different issues causing delays this year - some are identity verification, some are document mismatches, some are random reviews. The problem is the IRS phone reps either don't know or won't tell you which specific issue is affecting your return. Really considering trying one of those transcript analysis tools mentioned here since I need this refund for some urgent home repairs. At this point I just want to know WHAT is actually wrong instead of getting the generic "system issue" runaround.