When I got my CP2000 last year, I used TurboTax to help me figure it out. Does anyone know if there's a specific section in the software that handles these notices? I'm trying to help my mom with hers now.

Yes, you'll definitely get a receipt when paying online! When you use the IRS Direct Pay system, you'll get an immediate confirmation page with a confirmation number after your payment processes. Make sure to screenshot that page and print it out - that's your official receipt. You can also have them email you the confirmation. I'd strongly recommend including a copy of that payment receipt with your response form when you mail it back. The IRS processes payments and correspondence separately, so having that documentation attached helps ensure everything gets properly connected in their system and prevents any follow-up notices claiming non-payment. Also, double-check that you're selecting the correct tax year when making the payment online - this is really important because the payment will be applied to whichever year you select. Good luck with your CP2000!

For your eBay sales, here's what worked for me: download your Annual Financial Summary from eBay (Account Settings > Payments > Reports > Annual Financial Summary). This gives you a breakdown of all your sales for the year. If you're just selling personal items at a loss like old clothes or collectibles, there's generally no need to report this as income since there's no gain. But if you're buying things specifically to resell them for profit, that's considered business income. For documentation, keep screenshots of your eBay selling history, receipts for original purchases if possible, and records of any expenses related to your sales (shipping costs, eBay fees, packaging materials).

The main form you'll use for your eBay sales depends on the nature of your selling: If you're selling things around your house at a loss = nothing to report If you're regularly buying things to resell = Schedule C (self-employment) If you sold collectibles for more than you paid = Schedule D (capital gains) The confusing part is that even without a 1099-K, you still have to report profits. I learned this the hard way last year.

Just my two cents - I put aside 35% of all my 1099 income and it's always been more than enough. Better to have a little extra saved than not enough! Plus if you have leftovers after paying taxes, it's like a little bonus to yourself.

Another thing to consider is tracking your business expenses meticulously from day one! Since you're doing piece work at $2.75 per item, keep records of anything you spend money on for this gig - computer equipment, software subscriptions, internet costs, office supplies, etc. I learned this the hard way my first year doing 1099 work. I was so focused on setting aside money for taxes that I forgot to track my deductible expenses. Ended up missing out on about $800 in deductions because I didn't have proper records. Now I use a simple spreadsheet and save every receipt - it's made a huge difference in reducing my taxable income. Also, if you're working from home for this gig, look into the home office deduction. Even if it's just a corner of your bedroom, you might be able to deduct a portion of your rent/mortgage, utilities, etc. Just make sure that space is used exclusively for work.

FYI - I got audited on exactly this issue in 2023. Be very careful about trying to deduct personal travel with some work mixed in. The IRS agent was particularly focused on the "primary purpose" test. In my case, they disallowed deductions for trips where I had work meetings but couldn't prove the trips wouldn't have happened without those meetings. What worked in my favor was having email trails showing the business meetings were arranged BEFORE booking travel, calendar invites with agenda items, and detailed notes from the meetings showing business outcomes. For remote work days during personal trips, they were much more skeptical, but did allow partial deductions where I had substantial documentation.

The audit experience shared by TommyKapitz is really valuable insight. Documentation is absolutely crucial, especially for self-employed individuals who have more flexibility but also face more scrutiny. For tracking, I use a combination of tools: a simple spreadsheet to log daily work hours during travel, screenshot timestamps of video calls/meetings, and I always send myself summary emails after business calls that include the date, participants, and key discussion points. For expenses, I photograph every receipt immediately and note the business purpose right in the photo. One thing I learned from my CPA is to be conservative and only claim what you can clearly justify. The "would I have taken this trip anyway" test is key - if the answer is yes, then you're looking at partial deductions at best, and you need rock-solid documentation to support even those. The IRS seems to be cracking down on mixed-purpose travel deductions, so erring on the side of caution is probably wise.

The IRS website says VITA helps people who make $64,000 or less. That's referring to AGI, not gross. The whole point of VITA is to help lower-to-moderate income folks who can't afford paid preparers. Your situation with the retirement contributions bringing your AGI way down is exactly how the system is supposed to work! The only concern I'd have is some VITA sites might struggle with multiple investment accounts depending on how complicated they are.

That's frustrating that you experienced that! While the official IRS guidelines for VITA are based on AGI, you're right that individual sites sometimes apply their own screening criteria for practical reasons. Some sites do a quick gross income check during intake because it's faster than calculating AGI on the spot. If someone gets turned away from one VITA site due to gross income, I'd recommend trying another location or calling ahead to explain your situation. Most sites should honor the official AGI-based eligibility once they understand that your retirement contributions bring you well under the threshold. The IRS training materials are clear that it's supposed to be AGI, but implementation can vary by site unfortunately.