Has anyone here specifically done both a full-time W-2 job and Uber Eats? I'm in a similar situation and wondering if there's any specific tax software that makes this combination easier to file? My full-time job is simple but I'm worried about messing up the Uber part.

One thing I'd add that hasn't been mentioned is to consider setting up a separate bank account just for your Uber Eats earnings and expenses. This makes tracking everything so much easier come tax time! I opened a free business checking account and have all my delivery income deposited there, plus I pay for gas, car maintenance, and other delivery-related expenses from that account. At the end of the year, it's super easy to see exactly what I earned and what I spent. Also, don't forget you can deduct things like insulated delivery bags, phone mounts for your car, and even hand sanitizer if you bought it specifically for delivery work. These smaller expenses add up and can reduce your taxable income. Just keep all your receipts! With your current income level and the amount you're planning to work, you'll likely be in the 12% tax bracket for most of that Uber income, plus the 15.3% self-employment tax. So budgeting around 25-30% of your gross Uber earnings for taxes is smart advice.

I think everyone's overcomplicating this. The purpose of tracking non-deductible expenses is pretty straightforward - it's to properly track each partner's tax basis. The IRS wants to make sure partners don't claim more losses than they have basis for. The mortgage principal thing makes sense when you think about it: principal payments aren't expenses at all. They're converting one asset (cash) to reduce a liability (loan balance). That's why they don't flow through to capital accounts the same way as true expenses. The 50% non-deductible meals absolutely should be included though. Those are true expenses that just happen to be limited for tax purposes.

I've been dealing with similar issues in my partnership and wanted to share what I learned from our CPA. The key insight that helped me was understanding that non-deductible expenses serve two purposes: they reduce each partner's outside basis AND they reduce their capital accounts for book purposes. This is why mortgage principal payments don't belong in this category - they don't reduce anyone's economic investment in the partnership since the partnership is getting value (reducing debt) in exchange for the cash payment. One thing I haven't seen mentioned is that you also need to be careful about timing. Non-deductible expenses should be allocated in the same tax year they're incurred, even if the partnership is on a different accounting method for other purposes. Also, make sure your operating agreement is clear about how these allocations work. We had to amend ours because it wasn't specific enough about whether non-deductible expenses follow the same allocation as regular expenses or if they have their own rules.

Question for anyone who's dealt with this before - does having streaming income (even if it's a loss) affect my eligibility for any tax credits? I'm worried about losing my earned income credit since I hear self-employment income can change things.

This is a great discussion! I'm dealing with something similar but with YouTube AdSense revenue. I got a 1099-NEC (not MISC) for about $1,200 from YouTube, and I'm wondering if the same Schedule E vs Schedule C rules apply? My understanding is that 1099-NEC income typically goes on Schedule C and is subject to self-employment tax, unlike the 1099-MISC royalties you're dealing with. But I'm also just doing this as a hobby alongside my regular job, so I'm not sure if the "hobby vs business" distinction matters for tax purposes. Has anyone here dealt with YouTube income specifically, or know if there's a different treatment compared to Twitch royalties?

Do high income celebrities ever leave California to move to states with no income tax? If I was paying millions in state taxes alone, I'd seriously consider moving to Texas or Florida.

This is a fascinating discussion! As someone who works in tax preparation, I can confirm that celebrities like Tom Hanks face incredibly complex tax situations. One aspect that hasn't been mentioned yet is the Alternative Minimum Tax (AMT), which often kicks in for high earners and can actually increase their effective tax rate even further. Also, don't forget about self-employment taxes! If Tom Hanks is operating through a loan-out corporation as mentioned earlier, he might avoid some SE taxes, but if he's treated as self-employed, that's an additional 15.3% on the first $160,200 of income (for 2023). The timing of income recognition is huge too - many actors negotiate to defer portions of their compensation to future years when they might be in lower tax brackets or have moved to more tax-friendly states. It's really a chess game between their financial advisors and the tax code!

One thing I haven't seen mentioned yet is timing - if you received this letter yesterday, you're actually in a good position time-wise. Most IRS verification letters give you 30 days to respond, so you have room to breathe and choose the right approach. I'd recommend starting with the simplest step: look up your specific notice number on IRS.gov/notices to see exactly what response options are available for your particular situation. This will tell you definitively whether online submission is possible for your notice type. If online isn't an option and you're worried about phone wait times, remember that mailing your response (with tracking) is still perfectly valid and often less stressful than dealing with phone systems during tax season. The key is responding completely and on time - the IRS cares much more about getting the right information by the deadline than they do about which method you use to send it.

As someone who's been through this process multiple times, I'd recommend taking a hybrid approach. First, check the notice number online as others have suggested - this gives you the baseline information about your response options. However, don't overlook the power of preparation before choosing your method. Gather all the documents they're requesting first, then scan/photograph everything clearly. This way, if you decide to try the online portal, you'll have digital copies ready. If online doesn't work for your notice type, you already have everything organized for mailing. And if you do end up needing to call, having all your documents in front of you will make that conversation much more productive. One often-overlooked tip: if you're mailing documents, include a brief cover letter that references your notice number and clearly lists each document you're including. This simple step can prevent the "we never received X document" issues that lead to follow-up notices later.