Question: has anyone dealt with the actual process of cashing these HH bonds? I've heard some banks won't even cash savings bonds anymore, especially the older series. Do you have to mail them somewhere?

Just want to add another perspective based on my experience with my nephew's bonds last year. Since your daughter is 16 and the bonds are in her name, reporting on her return is definitely the way to go given her low income level. One thing to keep in mind - make sure you get the 1099-INT from the Treasury when you cash the bonds. It will break down the taxable interest clearly. For HH bonds that were converted from EE bonds, there can be two components: the deferred interest from the original EE bonds (which becomes taxable now) and any interest earned by the HH bonds themselves. Also, even though your daughter might not technically be required to file if her total income stays under the standard deduction, it's probably worth filing anyway. She'll likely get back any taxes withheld from her summer job, and it establishes a good paper trail for the bond interest reporting. The IRS likes to see consistency, especially with larger amounts like this. The whole process was much simpler than I expected once I understood the rules. Good luck!

Just got those same codes last week! lets hope we both get paid soon

TC 571 is actually a good sign! It means the IRS is releasing a previous hold or reversing an adjustment. Combined with TC 971, you should be getting a notice explaining what happened. I had the same codes last year and got my refund about 3 weeks later. The waiting is brutal but you're probably in the home stretch now. Check your transcript weekly for TC 846 - that's when you'll see your actual refund date!

Has anyone actually been audited over this specific issue? I'm in the same boat (S-corp with rental property, managed by property management company) and my CPA says no W-2 needed either. Just wondering if this is something the IRS actually targets or if it's more theoretical risk?

I'm dealing with the exact same situation and honestly, the conflicting advice is driving me crazy! My S-corp has a rental property that's fully managed by a property management company, and I literally just sign the annual tax forms and pay insurance. That's it. My CPA insists no W-2 is needed since I'm not materially participating in the business operations, but then I read horror stories online about people getting audited and owing back taxes. The gray area nature of this rule is so frustrating. What's really concerning me is that even if my CPA is technically correct, will the IRS see it the same way during an audit? I'm starting to think it might be worth just taking a small salary (maybe $2-3k annually) just to have documentation that I'm following the rules, even if it's not technically required in my situation. Has anyone found any definitive IRS guidance specifically about S-corps with fully managed rental properties? The general "reasonable compensation" rules seem to be written more for active businesses, not passive rental investments.

Called IRS yesterday about this exact thing. They said 4-6 weeks is standard wait time for paper check after DD rejection. But tbh could be faster depending on your location

Same thing happened to me last year. Took about 3 weeks after the rejection for the paper check to arrive. The annoying part is WMR doesn't update very clearly when they switch to paper check - it just keeps saying "being processed" until it's actually mailed. Hang in there, it should come soon since you're already at the 2 week mark!

A warning from someone who learned the hard way - if you're selling on multiple platforms, they ALL count toward that $600 threshold! I was selling on eBay, Mercari, and Facebook Marketplace thinking each platform had its own separate $600 limit. Nope! You have to combine all your sales across all platforms. Also, some payment processors like PayPal or Venmo might send separate 1099-Ks too. I ended up with THREE different 1099 forms for what I thought was a small selling hobby. The IRS computer systems match these forms to your tax ID, so don't forget to report all of them!

I totally get the frustration @Rebecca! I was in the same boat last year - just wanted to declutter and make a few bucks, then suddenly I'm drowning in tax forms. Here's what I wish someone had told me from the start: keep it simple but organized. Create one spreadsheet with columns for: item sold, what you paid for it originally, sale price, shipping costs, and platform fees. That's literally all you need. The good news is you're only taxed on actual profit, not gross sales. So if you bought something for $20, sold it for $35, and paid $3 in fees, you only owe taxes on $12 profit. All those scary 1099 forms just show gross sales - they don't tell the full story of what you actually made. Don't let the complexity scare you away from selling! Just start tracking everything now and you'll be fine next tax season.