Something nobody has mentioned yet - you'll need to pay self-employment tax (Medicare + Social Security) on this income too, which is about 15.3% ON TOP OF regular income tax. It really adds up! If you think you'll make more than $1000 in self-employment income in 2025, you should probably make quarterly estimated tax payments to avoid underpayment penalties next year.

I went through the exact same situation last year! The key thing to remember is that the $600 threshold for 1099-K forms is just when PayPal is required to send YOU the form - but you're required to report ALL income regardless of whether you get a form or not. Here's what I did in TurboTax: Go to the "Federal Taxes" tab, then "Wages & Income," and look for "Self-Employment Income" or "Business Income." You'll create a simple business for your art commissions. For the income amount, just add up all your PayPal payments from your transaction history - PayPal keeps good records that you can download. The silver lining is that you can deduct business expenses like art supplies, software, and even a portion of your internet bill against this income. Keep all your receipts! Also, since you made around $1,400 total ($800 PayPal + $600 from the 1099), you'll owe self-employment tax on that, but it's not as scary as it sounds when you factor in the deductions. Don't stress too much - you're doing the right thing by reporting everything honestly!

Has anyone here used tax software to handle this situation? I'm wondering if TurboTax or H&R Block can properly allocate the mortgage interest between Schedule A and Schedule E when a property changes use mid-year.

This is exactly the type of complex situation where proper documentation becomes crucial. I went through something similar when I converted my condo to a rental property mid-year. The key insight that helped me was understanding that the IRS views this as two separate "loans" once the conversion happens - even though it's technically the same mortgage. The personal residence portion (those 17-18 days) gets treated under the mortgage interest deduction rules with the $750k limit, while the rental portion goes to Schedule E as a business expense. One thing I'd recommend is taking photos of your move-in date to House B and any documentation showing when you started advertising House A for rent. The IRS likes clear evidence of the conversion date. Also, if you're working with a property management company, get a copy of the management agreement as it establishes the "placed in service" date for rental purposes. Keep detailed records of all expenses during the transition period too - things like cleaning, minor repairs, or staging costs can often be deducted as rental expenses once the property is available for rent, even if you don't have a tenant immediately.

has anyone claimed medical deductions while also claiming the earned income credit? im in a similar situation with income around $26k and about $6k in medical expnses but worried about how this affects my EIC

I went through something similar last year and wanted to share what I learned about the timing aspect. Since you had income from three different sources (employment, unemployment, then employment again), make sure you're including ALL of it in your AGI calculation for the 7.5% threshold. One thing that caught me off guard - if any of your medical expenses were reimbursed by insurance AFTER you paid them, you'll need to subtract those reimbursements from your deductible amount. This includes any HSA or FSA reimbursements you might have received. Also, keep really good records of everything. The IRS tends to scrutinize medical deductions more closely, especially larger amounts like yours. I kept a spreadsheet with dates, providers, amounts, and what each expense was for. Made tax prep much smoother and gave me peace of mind in case of questions later. Given your income level and the amount of medical expenses, you might also want to look into whether you qualify for any healthcare-related tax credits in addition to the deduction question.

One important thing nobody's mentioned yet - self-employment tax! Even if your standard deduction wipes out your income tax, you still have to pay self-employment tax (15.3%) on your net business profit. So in your example with $15k profit, you'd owe $0 income tax but still around $2,300 in self-employment tax.

Little tip that helped me: Your decision to file jointly or separately with your spouse should almost always be based on what gives you the lowest TOTAL tax. In your case with only $15k of business income, filing jointly and taking the standard deduction will almost certainly be better than any separate filing strategy. I wasted so much time trying different scenarios last year!

Has anyone had luck getting their 1099s electronically from PNC? I'm still waiting for mine in the mail and getting anxious since I like to file early. Their online banking doesn't seem to have them available for download yet.

I can confirm that PNC uses multiple PO Box addresses depending on your account type and location. I received my 1099-INT last week and it shows PO Box 3180, Pittsburgh, PA 15230, which matches what others have mentioned for standard personal accounts. For what it's worth, I had a similar concern last year about address discrepancies and called the IRS help line. The representative told me that as long as the EIN, SSN, and dollar amounts match exactly what the financial institution reports, minor address variations typically don't cause issues. The IRS matching system primarily focuses on those key identifiers. That said, I always recommend using exactly what's printed on your forms to avoid any potential delays. If you're still unsure, you can always request a duplicate 1099 from PNC to verify the information before filing.