I went through this exact same situation last year with my freelance graphic design work through PayPal! The confusion is totally understandable because PayPal's reporting thresholds and your actual tax obligations are two completely different things. Here's what I learned after consulting with a CPA: You absolutely need to report that $754 as self-employment income on Schedule C, and you'll owe self-employment tax on it (which is about 15.3% for Social Security and Medicare). The fact that PayPal didn't send you a 1099-K is irrelevant - you're still legally required to report all income. The good news is you can deduct those PayPal fees as a business expense! Keep track of all your art supplies, software subscriptions, and any other legitimate business costs. I was surprised to learn I could even deduct a portion of my phone and internet bills since I use them for client communication. For next year, I'd recommend setting aside about 25-30% of each payment you receive for taxes. It makes filing much less stressful when you're not scrambling to find money to pay what you owe. One more tip: if your art income grows to where you expect to owe more than $1,000 in taxes for the year, you'll need to start making quarterly estimated tax payments to avoid penalties. But at your current income level, you should be fine paying annually.

I've been doing freelance web design through PayPal for about 8 months now and went through this exact same confusion! What really helped me was understanding that there are actually TWO separate questions here: 1) Does PayPal have to report your income to the IRS? and 2) Do YOU have to report your income to the IRS? For question 1 - PayPal only reports if you hit their thresholds ($600 for 2024, $20K for 2023). Since you made $754, they didn't report your 2023 income. For question 2 - You're required to report ANY self-employment income over $400, regardless of whether you get a 1099 form. So yes, you need to report that $754. The state tax person was partially right about the $12,950 - that's likely your state's standard deduction threshold for INCOME tax. But federal self-employment tax is different and kicks in at just $400. You'll need to file Schedule C (business profit/loss) and Schedule SE (self-employment tax) with your regular tax return. The good news is those PayPal fees ARE deductible business expenses! Also track any art supplies, software, even a portion of your internet if you use it for business. I'd recommend starting to set aside about 25-30% of each commission payment for taxes going forward. Makes tax time much less stressful!

Does anyone know if requesting a PPIA before your short-term plan expires stops the collections process from starting at all? Or do they still go through some review period where collections could start?

From my experience working with tax debt situations, the IRS typically follows a fairly predictable timeline after payment plans expire, but you definitely don't want to test it. After your short-term plan ends in March, you'll usually have about 30-60 days before they start the formal collection process. They'll send a CP523 notice first, then escalate from there if you don't respond. However, this timeline can vary based on your payment history and the amount owed. I'd strongly recommend getting your PPIA application submitted BEFORE your current plan expires. This keeps you in good standing and prevents the collection clock from starting at all. The PPIA process isn't as scary as it sounds - yes, they need financial information, but they're looking to set up something sustainable, not to make your life impossible. One thing people often overlook: even if you think you can't afford the calculated PPIA payment, you can often negotiate or request a lower amount based on hardship. It's much better to have any formal agreement in place than to wing it with informal payments. The "throw money at it" approach without a formal plan leaves you vulnerable to liens, levies, and continued penalties/interest accumulation. Plus, you lose the legal protections that come with an approved payment plan.

I've been using Chime for tax refunds for the past two years and can share some insights that might help with your situation. The good news is that Chime has been very reliable for government deposits - I typically receive my refund 1-2 days before the IRS scheduled date, similar to what others have mentioned here. Since you're coming from USAA and have that June PCS deadline, I'd recommend a few things: First, file as early as possible once you receive all your tax documents to maximize your buffer time before moving. Second, consider keeping your USAA account active until after your refund processes, just as a safety net during the transition. Third, make sure you're using the account and routing numbers from the direct deposit section in your Chime app - I made that mistake my first year and nearly sent my refund to the wrong place. Given that you're planning 45 days ahead and have already triple-checked your numbers, you're being much more thorough than most people. The combination of early filing and Chime's faster processing should give you plenty of time to resolve any issues before your move. One last tip - enable push notifications for deposits in the Chime app so you'll know immediately when your refund hits, which can be especially helpful during a busy PCS timeline.

I've been using Chime for tax refunds for the past four years and it's been consistently reliable for me. As a fellow military member who's been through multiple PCS moves, I can definitely relate to wanting to plan everything out well in advance! The transition from USAA to Chime for tax purposes should be pretty seamless - both handle government payments well, but Chime typically processes them faster. I usually receive my refund 1-3 days earlier than the IRS estimated date. A few military-specific tips based on my experience: Make sure you update your address with both the IRS and Chime if you get PCS orders that change your timeline, even if you're using direct deposit. I'd also recommend filing as soon as you get your W-2 to maximize your buffer time before the June move. Keep screenshots of your direct deposit info from the Chime app as backup documentation - this has saved me time when I needed to verify information later. Since you're already being thorough with the triple-checking, you should be in good shape. The early deposit timing has actually been helpful during PCS seasons since those unexpected expenses always seem to pop up right when you need the extra funds!

This is a really serious issue that you need to address immediately before filing your taxes. A $7,170 discrepancy where your W-2 shows LESS than what you actually earned is not a small mistake - it suggests your employer may have significant payroll reporting problems. Here's exactly what I'd do: **Step 1: Organize your evidence** - Print out or save PDFs of all your bank statements showing the deposits from this employer. Highlight each payment and total them up so you have clear documentation of the $35,620. **Step 2: Contact payroll department directly** - Don't go through general HR or a manager. Ask specifically for whoever handles "W-2 corrections" or "payroll tax reporting." Be direct: "I need help resolving a discrepancy between my W-2 and actual wages paid. My W-2 shows $28,450 but I received $35,620 in payments." **Step 3: Request their payroll records** - Ask them to pull up your complete payroll history and year-end totals from their system. Often they can spot the error immediately when comparing their records to what was reported. **Step 4: Get a timeline** - Tax season doesn't wait, so ask when you can expect either an explanation or a corrected W-2. Give them about a week max to research and respond. **Step 5: Use Form 4852 if needed** - If they won't cooperate or deny there's an error, file Form 4852 (Substitute for W-2) with your actual income. The IRS will then investigate your employer directly. **Critical**: Never file using the wrong lower amount. Always report what you actually earned, even if you have to use Form 4852. Underreporting income can cause problems for you later. This level of underreporting could mean they're not paying correct employer taxes either, which makes this their compliance problem with the IRS. Most employers will fix this quickly once they understand the implications.

Great question about the Form 4852 process! You can actually file your tax return using Form 4852 without waiting for the IRS to finish investigating your employer. The Form 4852 essentially serves as a substitute W-2 that allows you to report your correct income and meet tax filing deadlines while the IRS handles the employer investigation separately in the background. When you file with Form 4852, you'll attach it to your tax return along with any supporting documentation (like your bank statements showing the actual payments). The IRS will process your return normally and then follow up with your employer about the discrepancy on their end. This way you don't miss any filing deadlines or refund opportunities while waiting for your employer to get their act together. If your employer completely ignores you, that actually strengthens your case for using Form 4852. The IRS instructions specifically mention using this form when "you asked your employer for a corrected or missing Form W-2, but the employer did not provide it." Document your attempts to contact them (emails, call logs, etc.) as this shows you made a good faith effort to resolve it directly first. The IRS takes wage reporting discrepancies seriously, especially when employers are unresponsive. Your employer's lack of cooperation will likely trigger a more thorough review of their payroll tax compliance, which is their problem to deal with, not yours.

Does anyone know if FreeTaxUSA lets you file prior year returns? I've used them for the past couple years and their interface is way easier than some of the bigger names.

For anyone dealing with multiple years of unfiled returns, I'd strongly recommend prioritizing them by which ones might have refunds versus which ones you'll owe money on. As Sofia mentioned, you only have 3 years to claim refunds, so those should be your absolute top priority. I was in a similar situation last year with 4 years of unfiled returns. I ended up using a mix of approaches - FreeTaxUSA for the years that could still be e-filed (super affordable at around $15 per return), and had to paper file the oldest ones. The key is just getting started rather than letting the overwhelm keep you procrastinating. One tip that helped me: gather ALL your tax documents first before you start any filing. Having everything organized upfront made the whole process way less stressful than trying to hunt down missing forms while in the middle of preparing returns.