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9 Tax preparer here. Just to add some clarity: The "under $600" confusion is one of the most common issues I see with clients. The $600 threshold only determines whether the PAYER must issue a 1099 form. It has absolutely nothing to do with whether YOU must report the income. All income from any source is legally required to be reported on your tax return, even if it's $5. The IRS computer matching system will catch discrepancies between what's reported by others using your SSN and what you report on your return, regardless of amount.
17 But realistically, would the IRS really come after someone for not reporting a tiny amount like $50 or $100? I mean, they must have bigger fish to fry, right?
9 While the IRS certainly focuses more resources on larger discrepancies, their automated matching system doesn't discriminate based on amount. I've had clients receive notices for discrepancies as small as $83. The issue isn't that they're "coming after you" for small amounts - it's that their system automatically flags mismatches. Once flagged, it can trigger notices, potential penalties, and interest on the unpaid tax. The headache of dealing with IRS correspondence typically far outweighs the small amount of tax you might owe on minor income. Plus, establishing a pattern of accurate reporting helps if you're ever selected for audit for other reasons. Better to report everything properly than risk complications over small amounts.
4 Does anyone know if this applies to stuff sold on Facebook Marketplace too? I sold some old furniture and made maybe $400 total last year. No 1099 forms or anything, just cash and Venmo. Do I seriously need to report that??
10 If you sold personal items for less than you originally paid for them (like used furniture), that's not considered taxable income - it's actually a personal loss. You only need to report income from selling things if you made a profit compared to what you originally paid. For example, if you bought a couch for $800 and sold it used for $300, that's not taxable income because you sold at a loss. But if you bought items specifically to resell them at a higher price, that would be taxable no matter the amount.
My brother is a contractor and I can tell you exactly what's happening here. They're probably reporting much less income than they actually make, and 1099s make that harder to do. That's why they're pushing back so hard. Send a final written notice (certified mail) stating that you'll be filing the 1099s for the full amount as legally required, whether or not they provide W-9s. Include IRS Form W-9 and a prepaid return envelope. State clearly that failure to provide the information may result in them being subject to backup withholding on future payments. Keep copies of everything. If they still don't provide the W-9s, file the 1099s with whatever information you have (name, address, etc.) and indicate they refused to provide their taxpayer ID. The IRS will handle it from there.
Thank you for this insight! This makes so much sense. I sent certified letters yesterday with the W-9 forms and return envelopes. I made it clear that I'll be filing the 1099s regardless. I'm documenting everything carefully. It's frustrating because they did good work, but I can't jeopardize my business by failing to comply with tax laws. I appreciate everyone's advice!
You're doing exactly the right thing. Document everything and proceed with filing. The IRS understands that some contractors try to avoid providing this information. As long as you can show you made proper attempts to collect it, you've fulfilled your obligation. The contractors will likely get notices from the IRS requesting verification of the income. That's their problem to deal with, not yours. Stick to your guns - you're in the right here.
Wait, I'm confused about something - I have a rental property and pay people for repairs all the time. Am I supposed to be collecting W-9s from everyone? Like even the guy who mows the lawn for $50 a week? This is the first I'm hearing about this requirement...
You need to issue 1099s (and therefore collect W-9s) from non-incorporated contractors who you pay $600 or more in a calendar year. So if your lawn guy is getting $50/week and you've paid him more than $600 total for the year, yes, you should get a W-9 from him and issue a 1099. However, you don't need to issue 1099s to corporations (with some exceptions like attorneys) or for personal payments not related to your business. Since rental properties are considered a business activity, services related to them typically require 1099 reporting when over the threshold.
Everyone's talking about the tax benefits, but don't forget about stimulus checks or recovery rebates! If there's another round of those in 2025 for the 2024 tax year (you never know!), having extra dependents could mean more stimulus money. During the last rounds, it was an extra $1400-$1600 per dependent. This is separate from the regular tax benefits and something to consider if you legitimately qualify to claim them. Just make sure you're eligible first - as others said, the living situation makes this complicated.
The key thing everyone's missing here is that your mom not filing taxes doesn't automatically make you eligible to claim your brothers. The IRS looks at who actually has the right to claim them based on the dependency tests, not who chooses to file. Since your brothers don't live with you, you'd need to meet the "qualifying relative" test, which means providing more than 50% of their total support AND they can't be claimed by anyone else who has a stronger claim (like your mom). Even if your mom doesn't file, she still technically has the stronger claim as their parent and primary caregiver. Your $800-1000 monthly support might be substantial, but you'd need to prove it covers more than half of ALL their expenses - housing, food, medical, clothing, education, etc. The IRS will want detailed records showing exactly what your money paid for. My advice: before doing anything, calculate the total cost of supporting your brothers for the year (including the value of housing your mom provides) and see if your contributions truly exceed 50%. If not, you don't qualify regardless of whether your mom files. If yes, get Form 8332 signed by your mom and keep meticulous records of every expense your money covers. Given the audit risk mentioned by others, this might be a situation where paying a tax professional for guidance upfront is worth it to avoid potential penalties later.
This is really helpful advice! I'm wondering though - when calculating that 50% support test, how do you put a dollar value on things like housing that mom provides? Like if she's living in a rental that costs $1200/month and the boys share a room, is that $600/month toward their support? And what about her time as caregiver - does that count as support she's providing? The IRS guidance I've seen online is pretty vague about how to calculate these indirect costs.
lmao good luck understanding that mess. I stared at mine for hours and gave up š¤®
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Look for these key codes on your transcript: 150 means they received your return, 570 is a hold (could be for review or missing info), and 846 is the golden one - that's your DDD! The date next to 846 is when your refund gets deposited. If you only see 570 with no 971 notice code, it might just be a routine review. Check back in a few days - transcripts usually update overnight between Tuesday-Friday.
Amara Adeyemi
Has anyone else noticed that TurboTax seems to be having more technical issues this year? This is the first time I've had problems with them in years of filing.
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Giovanni Gallo
ā¢Actually yeah, I've had weird glitches with TurboTax this year too. The mobile app kept crashing when I tried to upload my W-2 photo, and the website was super slow. Maybe they're having server issues that are affecting their notification system too?
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Natalie Adams
I'm experiencing the exact same issue! Filed through TurboTax on Tuesday and it's now Friday with no acceptance notice. Reading through these comments has been really helpful - sounds like this is much more common this year than in previous filing seasons. I'm going to wait the full 5 days before taking any action, but it's reassuring to know that the transmission confirmation from TurboTax is the important first step. The information about new IRS fraud detection systems causing delays makes a lot of sense too. Thanks everyone for sharing your experiences!
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