Just wanted to add that you should also make sure you have proper documentation for those uneven business expenses you mentioned. The IRS likes to see clear records showing which partner paid for what, especially when expenses aren't split 50/50. Keep copies of receipts, bank statements, and maybe even a simple spreadsheet tracking who paid for what and when. Also, since you're keeping the profits in the business account for future marketing expenses, make sure you're treating that business account properly - don't mix personal and business expenses. It'll make next year's taxes much cleaner and help protect your LLC status if there are ever any legal issues down the road.

I've been using TurboTax Business for my partnership LLC for the past two years and it's handled everything fine. For your situation with $850 in revenue and straightforward expenses, it should work perfectly. The software walks you through Form 1065 step-by-step and automatically generates the K-1s for you and your partner. A few tips that helped me: 1) Make sure you have your operating agreement handy when you start - TurboTax will ask about profit/loss sharing percentages, 2) Enter each expense with notes about who paid for it (the software has fields for this), and 3) Double-check that your EIN is entered correctly in every section - I made that mistake once and it caused filing issues. The pass-through taxation others mentioned is correct - you'll both owe taxes on your share even though the money is sitting in your business account. But honestly, with only $425 each in profit (assuming 50/50 split), your tax liability won't be huge. TurboTax Business costs around $180 but it's worth it for the peace of mind on your first partnership return.

4 For the business name, could I make up something like "John Smith Tutoring Services" or does it need to be officially registered somewhere? I've been tutoring math on the side but never thought about the business name aspect.

Just a heads up for anyone reading through this thread - make sure you keep detailed records of all your tutoring income throughout the year, even if it's just tracking payments in a simple spreadsheet. I learned this the hard way when I couldn't remember exactly how much I made from different students last year. Also, if you're using your car to drive to tutoring sessions, you can deduct either the actual expenses (gas, maintenance) or use the standard mileage rate (65.5 cents per mile for 2023). The mileage deduction can add up quickly if you're driving to students' homes regularly. Just make sure to log your business miles - the IRS likes documentation for vehicle deductions. One more thing - if you're planning to continue tutoring next year and think you might make more than $1,000 in profit, start looking into quarterly estimated tax payments. It's easier to pay as you go than get hit with a big bill and potential penalties at tax time!

Let me provide some clarity on what's happening: • The IRS implemented enhanced verification measures for 2024 filing season • Using an IP PIN validates your identity at submission but doesn't exempt you from secondary reviews • When online verification isn't available after receiving a letter, it indicates your case requires phone verification • This isn't a system malfunction but an intentional security feature • The process typically adds 3-5 weeks to refund processing The best course of action is to call the specific number on your verification letter during non-peak hours (typically before 9am or after 4pm local time). Have your letter, tax return information, and previous year's AGI ready when you call.

I went through this exact situation last year and can share what worked for me. When the online verification option disappeared after I received my letter, I was initially frustrated like many others here. However, I found that calling the IRS early in the morning (around 7:30 AM) significantly reduced my wait time - I got through in about 25 minutes instead of the usual hours-long wait. The representative explained that even with an IP PIN, certain algorithmic triggers can still flag returns for additional verification. It's not a glitch, but rather multiple security layers working independently. She was able to complete my verification over the phone in about 10 minutes by asking me questions about my previous tax returns and current filing. My advice: Don't wait for another letter. Call the number on your verification notice early in the morning, have your Social Security card, driver's license, and last year's tax return handy. The phone verification is actually faster than waiting for the mail process to complete. Given that you're on a fixed income, getting this resolved quickly will get your refund processed sooner.

Important thing nobody mentioned yet - make sure your sister properly reports any taxable portion of her condo sale on her taxes! If she sold a primary residence she lived in for at least 2 of the last 5 years, she likely qualifies for the capital gains exclusion (up to $250k for single filers), meaning she might not owe taxes anyway. The temporary deposit in your joint account doesn't change anything about how she reports the sale. She should receive a 1099-S if the sale was handled by a title company, and she'll report everything on her return using Schedule D and Form 8949 if needed.

Just want to add another perspective here - I work at a credit union and see these situations fairly regularly. The key thing to remember is that banks report cash transactions over $10,000 through CTRs (Currency Transaction Reports), but this is purely for regulatory compliance, not tax purposes. These reports go to FinCEN (Financial Crimes Enforcement Network) and are used to track potential money laundering or other financial crimes. They're not automatically shared with the IRS for tax enforcement purposes, and receiving one doesn't mean you owe taxes or need to report anything additional. Your situation sounds completely normal - family members often use joint accounts for convenience when handling large transactions like real estate sales. As long as the money's source is legitimate (which a documented condo sale clearly is) and your sister reports any taxable gains on her return, you have nothing to worry about. The paper trail you already have (sale documents, deposit records, transfer to her individual account) is perfect documentation if any questions ever arise.

Just a heads up from someone who's been there - regardless of which route you choose, you should really get your EIN asap. I waited until the last minute when we needed to open a bank account for a fundraiser, and the EIN application process took longer than expected. Getting an EIN is free and relatively simple through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Another option worth considering is operating as an unincorporated association initially while you build up funds. You can still get an EIN and open a bank account without formal 501(c)(3) status. The downside is that donations won't be tax-deductible for donors, but for small school fundraisers like restaurant nights, this might not matter much. If you do go this route temporarily, make sure to keep detailed records of all income and expenses. Once you've raised enough to cover the filing fees (either $275 for 1023-EZ or $600 for full 1023), you can then apply for formal tax-exempt status. The IRS allows you to request retroactive recognition back to your formation date if you apply within 27 months of incorporating. This gives you time to see how much funding you actually receive and whether the investment in formal 501(c)(3) status makes sense for your organization's size and goals.