Thanks for pointing that out. The agreement we have is more like a promissory note with the house as collateral. We knew we weren't on the deed, and trusted her (plus had the signed agreement). But you're right that in a worst-case scenario, we'd have had to take legal action if she refused to pay. For future reference, would you recommend actually getting on the deed for this kind of arrangement? Or is there a better way to structure it?

For future reference, there are several better ways to structure this. If you want actual ownership, you absolutely need to be on the deed - that's the only thing that legally establishes property ownership. Your name on the deed would make you true partial owners. If you prefer the loan approach (which is simpler), you could use a recorded mortgage or deed of trust. This creates a public record of your loan against the property and gives you much stronger legal protection. If she didn't repay, you'd have a straightforward foreclosure process rather than having to sue based on a private agreement. Either way, for amounts this large, it's worth spending a few hundred dollars on a real estate attorney to structure it properly. The peace of mind and legal protection are absolutely worth it.

This is so frustrating! The government makes you report large deposits of YOUR OWN MONEY coming back to you? It's none of their business if my family pays me back money I lent them. The whole banking system is designed to treat everyone like criminals.

Thanks for the tip about Form 1096! I wasn't aware I needed to file that as well. Is there a deadline for submitting that form that's different from my regular tax filing?

The deadline for filing Form 1096 along with all your 1099-NEC forms to the IRS is January 31, 2026 for the 2025 tax year. This is earlier than your personal tax return deadline (April 15) because the IRS needs time to process these forms and match them against what contractors report on their returns. If you've already sent 1099-NECs to the government as you mentioned, hopefully you included the 1096 with them. If not, you should file it as soon as possible even if it's late. The penalties for late filing start at $50 per form if you're less than 30 days late, and increase the longer you wait.

TurboTax does a decent job with Schedule C. It asks you questions about your business expenses and suggests categories based on your answers. For contractor payments, it specifically asks if you paid independent contractors and guides you to put those on Line 11. It also reminds you about 1099 requirements. I found it pretty helpful for basic Schedule C stuff, but for more complex situations like deciding if something is truly "advertising" versus another category, you might still need to do some research on your own.

Thanks for the info! That's reassuring to hear that TurboTax guides you through the contractor payments part. I'll give it a try this year instead of stressing about categorizing everything perfectly beforehand.

What about liens? I heard they can put a lien on your house or property if you don't pay. How long before they do that?

Liens are definitely a possibility, but they typically don't happen immediately. The IRS generally sends multiple notices before filing a tax lien. Usually, you'll receive several billing notices over a period of months. If you've set up an installment agreement and are making your payments on time, the IRS typically won't file a lien. However, if you owe more than $10,000 and don't set up a payment arrangement, a lien becomes much more likely. The timeline varies case by case, but it's usually not something that happens within the first couple months of non-payment.

I completed an Offer in Compromise last year. It's legitimate but NOT easy to get approved. They do a thorough financial analysis of your assets, income, and expenses to determine your "reasonable collection potential." They only accept offers that are equal to or greater than what they think they can collect from you. I owed about $22k and settled for $9k, but I had to prove genuine financial hardship and limited assets. The application process took almost 9 months and required extensive documentation. Those "pennies on the dollar" ads you hear are very misleading.

OMG THANK YOU!! That was exactly it!! I just went back and checked, and somehow I had checked "Yes" to the question "Can someone else claim you or your spouse as a dependent?" I must have misread it while rushing through. After fixing that one box, all my child tax credits immediately showed up! You just saved me $8,000! Seriously, I can't thank you enough. I've been stressing about this for days.

So glad that fixed it for you! It's such a simple mistake but it has huge consequences. I did exactly the same thing last year and nearly lost my mind trying to figure out what was wrong. The way they word those questions can be so confusing, especially when you're trying to get through your taxes quickly.

Unfortunately that's just how the tax law works. The IRS only cares about the age on December 31st of the tax year. My daughter turned 17 on December 28th and I lost the full $2,000 credit for her. But don't forget you can still claim the $500 Credit for Other Dependents!

This is super helpful! Can I ask roughly what you paid for each type of professional? And did you notice a big difference in the amount of tax savings as you "upgraded" to more specialized help?

For the bookkeeper and tax preparer combo, I paid about $80/month for bookkeeping and $350 for tax preparation, so roughly $1,310 annually. They mainly just organized things and filed correctly, but didn't offer much strategic advice. The Enrolled Agent/tax consultant cost me about $1,800 annually but found an additional $4,200 in deductions the first year - home office, mileage, and several business expenses I didn't realize were deductible. Definitely a worthwhile upgrade. My CPA costs about $3,200 annually but has structured my business to save approximately $11,000 in taxes through strategic planning, retirement contributions, and helping me choose the right business entity. As your business grows more complex, the potential tax savings generally increase enough to justify the higher fees.

How do you handle quarterly estimated tax payments with this approach? That's the part I find most confusing with my side business.