Just to add another perspective - I went through this exact situation last year as a freelance graphic designer. The key thing that helped me was creating a simple tracking system right away. I set up a spreadsheet with columns for date, amount, check number, and recipient details. This made it so much easier when tax time came around. One thing I wish someone had told me earlier: get that W-9 form signed when you first start the sublease arrangement, not when you're scrambling in January. I made the mistake of waiting and had to chase down my sublease landlord during the holidays when they were traveling. Also, keep copies of all your cancelled checks or bank statements showing the payments - the IRS loves paper trails. The good news is that once you get organized with the 1099 process, it becomes pretty routine for future years. And honestly, most people are cooperative about filling out the W-9 since they need to report the income anyway.

This whole thread has been incredibly helpful! I'm a freelance marketing consultant who just started subleasing from another business owner, and I had no idea about the 1099 requirements. Reading through everyone's experiences really clarified things for me. One question I haven't seen addressed: what happens if the person you're subleasing from is located in a different state? I'm in California but my sublease landlord lives in Texas. Does this change anything about the 1099-MISC filing requirements or the $600 threshold? Also, do I need to worry about any state-specific reporting requirements on top of the federal 1099? I'm definitely going to request that W-9 form right away based on all the advice here. Better to get organized now than scramble later!

Great question! I went through this exact same confusion when I switched from traditional to Roth 401k contributions a few years ago. The key thing to understand is that the difference shows up in Box 1 of your W2, not somewhere else on your Form 1040. Here's how it works: **Traditional 401k (Code D):** Your $6700 contribution is deducted from your wages BEFORE taxes are calculated. So if your salary is $135k, Box 1 of your W2 would show $128,300 ($135k - $6700). This $128,300 is what goes on Line 1 of your Form 1040 as taxable wages. **Roth 401k (Code AA):** Your $6700 contribution is made AFTER taxes. So Box 1 of your W2 shows the full $135k, and that's what goes on Line 1 of your Form 1040. The reason you notice different tax withholding on your paychecks is because with traditional 401k, your employer calculates withholding on $128,300 of income instead of the full $135k. With Roth, they withhold on the full $135k since you're paying current taxes on that money. So you're paying $6700 × 22% = $1,474 less in current taxes with traditional (assuming 22% bracket), but you'll pay taxes on both the contributions and growth when you withdraw in retirement. With Roth, you pay that $1,474 now but get tax-free withdrawals later. Hope that clears up the mystery!

This is such a comprehensive discussion! As someone who's been helping family members with their taxes for years, I can confirm everything mentioned here is accurate. One additional point that might help newcomers: if you're using tax software and want to see exactly how these contributions affect your return, try running two scenarios - one with your actual W2 data, and another where you manually adjust Box 1 to see what it would look like with the opposite contribution type. Most software lets you do "what-if" scenarios. For example, if you have Roth contributions (code AA) this year, you could temporarily increase Box 1 by your contribution amount to simulate what traditional contributions would have looked like. The difference in your tax liability will show you exactly how much more you're paying in current taxes with Roth vs. traditional. This really helped my sister understand the trade-off when she was deciding which route to take for 2025. She could see the immediate tax savings of traditional vs. the long-term benefit of Roth tax-free growth. The key insight from all these responses is that it's not about finding the difference somewhere else on Form 1040 - the difference is already baked into your W2 Box 1 wages before you even start filling out your tax return!

This is really helpful to see everyone's experiences! I'm in the same boat - my status changed to "STILL being processed" after exactly 21 days too. Based on what I'm reading here, it sounds like this is definitely a meaningful status change that indicates additional review rather than just different wording. I'm curious though - for those who got through to actual IRS agents, did they give you any sense of what triggers these reviews? Is it truly random or are there patterns? I have a pretty straightforward return with just W-2s and standard deduction, so I'm surprised mine got flagged. Thanks for all the insights everyone!

Great question! I've been through this exact same situation twice now. The "STILL being processed" status is definitely a meaningful change - it indicates your return has moved beyond the standard processing queue and into what the IRS calls "extended processing." This typically happens when your return is selected for additional verification, whether that's identity verification, income matching, or review of specific credits/deductions. In my experience, the timeline extends to 6-10 weeks from the original filing date. The key is checking your tax transcript for specific transaction codes that can give you more insight into what's causing the delay. Don't panic though - most of these extended reviews resolve without any issues or additional action needed from you!

I completed my ID verification at the San Diego TAC facility in February. The IRS representative conducted a comprehensive biometric verification process including photo ID comparison and document authentication. They verified my Form 5071C letter against their internal database, confirmed my current and previous addresses, and asked security questions based on my credit history. The entire verification was completed in approximately 22 minutes, and my transcript updated with TC 971 AC 611 exactly 5 business days later, indicating successful verification. My refund was direct deposited 9 days after that.

I just went through this process last month after a similar situation with address changes following my move. The in-person verification is exactly that - you'll meet face-to-face with an IRS employee at the Taxpayer Assistance Center. They're pretty efficient once you have all your documents ready. Bring your government-issued photo ID, Social Security card, and any IRS letters you received about the verification requirement. The agent will review everything, ask you to verify some basic information, and have you sign a form. My whole appointment took about 25 minutes. The good news is that once verification is complete, your refund should process within 1-3 weeks. Given your post-divorce financial situation, this should help get things moving fairly quickly. Just arrive a few minutes early and you'll be fine!

I've been following this discussion closely as someone who went through a similar decision process last year with my marketing agency S-Corp. One thing I'd add that hasn't been mentioned much is the impact on your business banking relationships. When I set up my QSub structure, my bank initially wanted to treat the LLC as a completely separate customer requiring new account applications, credit checks, etc., even though I explained it was a QSub. It took several conversations with their commercial banking team and providing them with copies of Form 8869 to get them to understand the relationship. Eventually they set it up so the LLC accounts were linked to my existing S-Corp business profile, which made things much smoother. Also, regarding state compliance - make sure to check if your state requires any specific language in the LLC's operating agreement acknowledging the QSub election. My attorney included a clause that specifically references the federal QSub status and states that the LLC won't file separate tax returns. This helped avoid confusion later when dealing with various vendors and financial institutions who weren't familiar with QSub structures. The depreciation tracking that others mentioned is definitely important to get right from day one. I set up separate fixed asset schedules for each entity in QuickBooks even though everything flows to one tax return - this makes year-end much easier and provides clear documentation if you ever need to value the businesses separately for loan purposes or potential sale.

This has been an incredibly thorough discussion! As someone who just completed this exact process a few months ago (S-Corp consulting business expanding into rental properties via LLC with QSub election), I wanted to share a few additional practical tips that might help others: **Timing coordination is crucial** - I learned that you want to get your LLC formation, EIN application, and QSub election (Form 8869) all completed before you start any business activities through the LLC. This avoids any messy period where the LLC might be treated as a separate tax entity. **Consider your state's franchise tax implications** - Even with the QSub election, some states still impose minimum franchise taxes or fees on the LLC as a separate legal entity. In my state, this added $300/year that I hadn't budgeted for. **Documentation for lenders** - If you plan to get business loans or mortgages for properties through the LLC, having clean documentation of the QSub relationship from day one makes the underwriting process much smoother. Lenders understand S-Corps but often get confused by QSub structures, so having Form 8869 and clear operating agreement language helps immensely. **Payroll considerations** - If you plan to pay yourself from both businesses, work with your payroll provider early to understand how to structure this. Since it's all one tax entity, you can't have separate payroll tax accounts, but you want clean documentation showing which activities generated which compensation. The liability protection aspect that several people mentioned really can't be overstated - it's probably the biggest advantage of this structure beyond the tax simplification.