Don't stress too much about this! I accidentally selected "retail" for my SAAS business two years ago and it's never caused any issues. The business category on the EIN application isn't as critical as people make it out to be. The IRS cares more about accurate income reporting than the specific category you select during application.

Great question! I went through this exact same process last year for my SaaS startup. After researching extensively and consulting with my accountant, I selected "Service" for our EIN application. The reasoning is that SaaS businesses are fundamentally providing ongoing access to software functionality rather than selling a tangible product. Even though customers "purchase" subscriptions, what they're really buying is continuous access to your service platform. This puts it squarely in the service category rather than retail, which is typically reserved for businesses selling physical goods or one-time software purchases. The IRS views subscription-based software access as a service offering, similar to how they'd classify other subscription services like consulting or cloud hosting.

OP, ignore everyone saying you need to 1099 absolutely everyone. This is what accountants do to cover themselves - tell clients to over-file rather than risk missing required filings. Here's what you ACTUALLY need to know: - You don't issue 1099s to corporations (get W-9s to verify) - You don't issue 1099s for credit card/third party payments (PayPal, Square, etc) - You need to classify expenses correctly (personal vs business) Your hairstylist at SuperCuts doesn't need a 1099. Your independent hair person who comes to you before shoots probably does. Your accountant structured as a sole prop needs one, but if they're an LLC taxed as a corp, they don't. Don't just blindly issue 1099s to everyone. Get W-9s, understand the rules, and file accordingly.

As someone who just went through my first year of S Corp 1099 filings, I can confirm your accountant is right but there are some nuances that might help reduce your stress. The good news is you don't need 1099s for EVERYONE on that list. If your hairstylist works at a salon that's incorporated, or if you paid any of these vendors via credit card or business payment platforms like Square, those don't require 1099s from you. Here's what saved me time: I created a simple spreadsheet tracking each vendor, how I paid them (cash/check vs credit card), their business structure (got this from W-9s), and total annual payments. This helped me quickly identify who actually needed 1099s versus who didn't. Your friend who's never done this might be flying under the radar, but the penalties for missing 1099s can be substantial ($50-$280 per form depending on how late). Better to be compliant from the start. One tip: for vendors you'll work with regularly, get their W-9 forms upfront when you first hire them. Makes tax season way less stressful than scrambling to collect everything in January.

I'm wondering what tax software people use for reporting this kind of income? I've always just used the free SimpleTax/Wealthsimple Tax but not sure if it handles self-employment stuff well?

One thing I haven't seen mentioned yet is the importance of keeping detailed records from day one. Since platforms like feetfinder handle payments digitally, make sure you're downloading monthly statements and keeping screenshots of your earnings. The CRA can ask for proof of income going back several years if they ever audit you. Also, don't forget about potential business deductions! If you're using your phone for photos, a portion of your phone bill might be deductible. Same with internet costs, any props or clothing you buy specifically for photos, even a portion of your home if you're using a specific room for photo shoots. These deductions can help offset some of the tax burden. I'd also recommend opening a separate bank account just for this income if you're planning to take it seriously. Makes tracking so much easier come tax time, and it looks more professional if the CRA ever has questions.

Anyone else notice the IRS is moving slower than molasses this year?🐌

Pro tip: Don't rely just on WMR (Where's My Refund) tool, it's not always accurate. Your transcript is the real source of truth once it updates. Also check your account transcript, not just return transcript.

Does anyone know if this credit phases out at higher incomes? I make about $150k and sometimes tax benefits disappear for me.

Just wanted to share my experience as someone who was in your exact situation last year! I had two kids (ages 18 and 19) who aged out of the Child Tax Credit, and I was also getting a refund due to overwithholding. I can confirm that claiming the Credit for Other Dependents absolutely increased my refund by the full $1,000 ($500 per kid). The credit reduces your tax liability first, and then any remaining refund from overwithholding gets added on top of that. So yes, it's definitely worth doing the paperwork! One tip: make sure you have all their information ready (SSNs, birth dates, etc.) and double-check that they meet the qualifying criteria. My tax software made it pretty straightforward to add them once I confirmed they qualified. Don't leave that money on the table - it's essentially free money the government owes you for supporting your dependents.