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Slightly related but different question - do companies use the same $600 threshold for reporting to state tax agencies? I've got income from three different states and I'm confused about what might show up where...
This is such a common confusion point! Yes, you absolutely need to report that $450 even without a 1099-NEC. The threshold only applies to the company's obligation to send YOU the form, not their reporting to the IRS. I learned this the hard way when I started freelancing. I kept meticulous records using a simple spreadsheet - date, client, amount, and description. Even saved screenshots of payment notifications from PayPal/Venmo/etc. The key thing to remember is that the IRS can match payments reported by companies to what you declare, regardless of the dollar amount. So even if you think a $450 payment is "too small to matter," it could still trigger a notice if there's a mismatch. My advice: create a simple tracking system now for any future freelance work, and definitely include this $450 on your Schedule C. The peace of mind is worth way more than any small tax you'll owe on it!
I had a similar issue and found out I needed to look at the ACCOUNT transcript specifically, not the RETURN transcript. They show different information! The return transcript just shows what you submitted, while the account transcript shows all the actions the IRS has taken. Make sure you're looking at the right one!
This was my issue too! I kept looking at the Return transcript wondering where my refund info was. The Account transcript is the one with all the codes everyone is talking about.
Exactly! The Return transcript is basically just a summary of what you filed, while the Account transcript shows the actual processing status and any adjustments made by the IRS. It's especially important this year with all the unemployment tax adjustments happening. The Account transcript will show if they've made changes to your refund amount due to the unemployment tax exclusion that was passed after some people had already filed.
Just wanted to add another perspective - if you're seeing a much smaller amount than expected, check if your state taxes were withheld from your federal refund. This happened to me and I was so confused until I realized the IRS had applied my federal refund to outstanding state tax debt I didn't even know about. You can see this on your account transcript as a code 766 "credit to your account" followed by a code 767 "credit applied to another tax period/form." The difference between these two amounts would be what was sent to your state for back taxes. Also, since you mentioned unemployment income - if you filed early before the unemployment tax exclusion was passed, your transcript might show adjustments related to that. Look for codes starting with "29" which indicate additional assessments or refunds related to those changes.
This is really helpful! I never thought about state tax debt being taken from my federal refund. How would I even know if I owe back taxes to my state? And regarding the unemployment tax exclusion - I did file in early February before that was passed. Should I expect to see automatic adjustments on my transcript, or do I need to file an amended return?
Have you tried these alternative approaches? • Contact Taxpayer Advocate Service (they can help when normal channels fail) • Request your Account Transcript online instead of waiting for return processing • Visit local IRS office in person (appointment required) • Check if your state has a tax agency that can confirm receipt of federal return Do any of these sound feasible with your schedule? Many parents I know have had success with the TAS route when dealing with paper returns.
I'm dealing with the exact same frustrating situation! Filed my paper return on February 15th and it's radio silence from the IRS. Like you, I'm juggling work and family obligations and can't spend entire days trying to get through to them on the phone. It's incredibly stressful not knowing if they even received it or if there's an issue. I've been checking "Where's My Refund" obsessively but it still shows no information available. Reading through these responses gives me some hope that others have eventually gotten through - might have to try some of these suggested approaches since the standard waiting game clearly isn't working for any of us paper filers this year.
Don't forget about state R&D credits too! Many states offer their own version on top of the federal credit. We're in California and actually got a bigger benefit from the state credit than the federal one last year. Also, if you're a startup or small business without much tax liability, look into the federal payroll tax offset. You can apply up to $250,000 of your R&D credits against your Social Security payroll taxes instead of income tax. This was a game changer for us when we were pre-profit but spending heavily on development.
This thread has been incredibly helpful! I'm in a similar situation with a 15-person software company and had no idea about the R&D credit until recently. A couple of follow-up questions based on what I've read here: 1. For those who've successfully claimed this - how do you handle the gray area between regular software maintenance vs. qualifying R&D activities? We spend a lot of time fixing bugs and optimizing existing code, but I'm not sure if that counts as "resolving technical uncertainty." 2. The payroll tax offset option sounds perfect for us since we're still growing and don't have huge income tax liability. Is there a specific form or process for electing this option, or does your accountant handle it automatically? 3. Has anyone tried claiming credits for developing internal tools or processes that improve how your team works, or does it need to be customer-facing products? Thanks again everyone - this has been way more informative than anything I found through Google searches!
Ravi Gupta
Filed jointly with my wife late March. Got federal April 15th, PA refund May 23rd. So about 8 weeks for PA, 3 weeks for federal. Pretty normal in my experience.
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Natalie Adams
PA resident here too! Just wanted to chime in that 6 weeks is totally normal for state refunds. I've been filing in PA for about 8 years now and it's always been significantly slower than federal. The state processing times are just much longer - I think it's a combination of older systems and smaller staff compared to the IRS. From what I've seen, if you filed electronically in early April, you're probably looking at another 1-2 weeks max. The "being processed" status is actually good news - it means they have your return and it's moving through the system. If there were any major issues, you would have gotten a notice by now. Try not to stress about it too much. PA is just slow but they do eventually get there!
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