One thing nobody's mentioned yet is that if your wife takes this church job, she'll still have to pay FICA taxes (Social Security and Medicare), but how those are handled can be different. For regular employees (non-ministerial staff like your wife would be), the church is required to withhold and pay these taxes just like any other employer. But for ordained ministers, it works differently - they're considered self-employed for FICA purposes and pay self-employment tax instead. Just something to be aware of since churches sometimes get this wrong if they're not familiar with the difference between ministerial and non-ministerial staff tax treatment!

Just a heads up - I'm an accountant and have worked with several religious organizations. Make sure the church is properly classifying your wife as an employee and not as an independent contractor! Some churches mistakenly classify non-ministerial staff as contractors to avoid paying their portion of FICA taxes, but this is usually incorrect for someone in a staff position like production engineer. If they try to pay her without withholding taxes and give her a 1099 instead of a W-2, that's a red flag. She'd end up paying the full self-employment tax (15.3% instead of 7.65%) which would make that pay cut even bigger!

Here's a simple example that might help your coworker understand: Server: Makes $25k in wages + $25k in tips = $50k total income Line cook: Makes $50k in wages = $50k total income Both pay EXACTLY the same in taxes since their total income is identical. The only difference is HOW they earned it, not how it's taxed. What often happens though is servers make MORE total income than kitchen staff. So a more realistic example might be: Server: $20k wages + $40k tips = $60k total Line cook: $45k wages = $45k total In this case, the server pays more in taxes ONLY because they make $15k more in total income, not because they're taxed at a higher rate.

This is such a common misconception in the restaurant industry! I've seen so many BOH staff miss out on potentially higher earnings because they believe this myth about "server taxes." The reality is that the tax code treats all income the same - whether you make $50k from hourly wages or $50k from a combination of wages and tips, your tax liability is identical. What creates confusion is that tipped employees often have more complex payroll situations where taxes are withheld differently, making their paychecks appear smaller even though their total take-home (including cash tips) is usually higher. Your coworker might also be thinking about FICA taxes on tips, but even those are the same rate as regular wages - 7.65% for Social Security and Medicare combined. The only "special" thing about tip taxation is the reporting requirements and allocation rules that ensure proper compliance. I'd suggest showing your coworker actual tax calculations with the same total income from both scenarios. Sometimes seeing the numbers side-by-side is the only way to overcome these persistent industry myths.

i think a lot of the answers here are overcomplicating things. i ran into this exact problem with my etsy shop where i take deposits months before i make custom items. what i did was just report the 1099-K amount on schedule C where it asks for it, but then i adjusted my gross receipts to match what i actually earned under accrual. turbotax let me do this without any issues. been doing it this way for 3 yrs and never had a problem or got audited. just keep good records showing which deposits are for 2026 work vs completed 2025 sales. that's all you really need.

As someone who's been through this exact situation with my consulting business, I can confirm that Jacob's approach is correct and much simpler than it might seem at first. You absolutely should report the 1099-K amount exactly as issued - the IRS matching system will flag any discrepancies there. The key is understanding that reporting the 1099-K doesn't mean you're taxed on that full amount. You report it, then make the appropriate adjustments to reflect your actual accrual-based income. Most tax software handles this smoothly - there's usually a reconciliation section where you can explain the difference. What really helped me was creating a simple spreadsheet showing: - Total 1099-K amount - Amount for completed projects (actual 2025 income) - Amount for deposits on future work (not 2025 income) This becomes your supporting documentation. I've never been audited, but having that clear paper trail gives me peace of mind. The IRS sees this situation constantly with service businesses, so as long as you're consistent with accrual accounting principles and can document the difference, you're handling it correctly. Don't overthink it - report the 1099-K, adjust to your actual earned income, and keep good records. That's really all there is to it.

21 Has anyone here actually calculated if doordashing is worth it after accounting for gas, car maintenance, insurance, and self-employment taxes? I did it for 3 months and when I really added everything up, I was making like $10/hr effective rate even though the app showed $18-20/hr.

Just wanted to share my experience as someone who's been doing both W-2 work and gig delivery for about a year now. The advice about using your W-4 to withhold extra is spot on - I wish I'd known this earlier! One thing I'd add is to keep separate bank accounts if possible. I opened a simple checking account just for my Doordash deposits, and it makes tracking business income and expenses SO much easier at tax time. Even if you're only making $200-300/month, having that clean separation is worth it. Also, don't wait until tax season to start organizing. I made that mistake my first year and spent hours trying to reconstruct my records. Now I take 10 minutes each week to log my expenses and reconcile everything - saves me from the panic later! For your income level, you're probably fine without quarterly payments, but definitely keep an eye on it. If you start making more or pick up additional gig work, you might cross into needing them.

One thing nobody's mentioned yet - if you're close to the end of the year, adjusting your W4 might not make enough difference for this year's taxes. We realized this in October last year and had to make a large estimated tax payment (Form 1040-ES) in January to avoid penalties. Don't wait too long to make your adjustments!

I was in almost the exact same situation last year - dual income household around $150k combined, rental property, and got hit with a $2,800 tax bill that we weren't expecting. What worked for us was having both of us switch to "Married, but withhold at higher single rate" on our W4s. The rental income was the real kicker though. We calculated roughly 22% of our annual rental profit ($1,800 x 12 months minus expenses) and divided that by the number of paychecks remaining in the year, then added that amount to line 4(c) on one of our W4s. It took some trial and error but we ended up with a small refund this year instead of owing. The key is not to overthink it - start with the "married but withhold at single rate" change for both of you, then add extra withholding for the rental income. You can always adjust mid-year if needed.