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pro tip: make sure your bank info is correct bc if theres any issues itll get kicked back and delay everything another 6-8 weeks
yeah triple checked everything should be good to go š¤
Congrats Mei! That's awesome news after such a long wait. Code 846 is definitely the refund issued code, so you should see that money hit your account on or around 1/10/25. I know the feeling of waiting almost a year - it's incredibly frustrating but you're finally at the finish line! Make sure to keep an eye on your bank account starting a day or two before that date, sometimes they process a bit early.
I did a single photography job last year for a wedding and wondered the same thing. Ended up having to pay self-employment tax and it sucked. Don't forget you'll need to pay ESTIMATED taxes next year if he does something like this again!! I got hit with a penalty because nobody told me about that rule.
You can avoid the estimated tax penalty if your regular job withholding covers at least 90% of your total tax liability or 100% of last year's taxes (110% if your income is over $150k). Might be worth adjusting your W-2 withholding instead of making separate estimated payments if it's just a small side gig.
I was in a very similar situation a few years back with some freelance web development work I did for a neighbor's small business. The amount was around $3,800, so pretty close to what your husband earned. Even though it felt like "just helping someone out," the IRS treats any income from services as self-employment income regardless of whether it's a one-time thing or an ongoing business. I learned this the hard way when I tried to report it as "other income" initially. One thing that helped me was keeping detailed records of all the expenses related to the project - software licenses, the portion of my home internet used during those work hours, even some office supplies I bought specifically for organizing the project files. These deductions on Schedule C helped offset some of the self-employment tax burden. Also, since your husband's friend didn't send a 1099, make sure to keep any records of the payment (bank deposits, checks, PayPal records, etc.) in case the IRS ever has questions. The lack of a 1099 doesn't mean the income doesn't need to be reported, but having your own documentation makes everything cleaner.
been on hold with irs for 3 hrs today trying to figure out my codes. wish id known about that ai thing sooner ngl
seriously try taxr.ai - beats waiting on hold forever
Congrats on the 846! That's the golden code we all wait for š You should see your refund in your account within 2-5 business days. I remember that feeling of relief when I finally saw mine after months of waiting. Chase usually processes pretty quickly so you might even see it sooner than expected!
Quick tip that helped me: Make sure you're also considering the annual Section 179 expense deduction dollar limit ($1,160,000 for 2025) and the phase-out threshold ($2,890,000 for 2025). These limits apply before you even get to the business income limitation. Also, don't forget that taking Section 179 is optional - you can always just take regular depreciation instead if it makes more sense for your tax situation. Some years it's better to spread the deduction out rather than taking it all upfront.
Is there any benefit to NOT taking Section 179 and just doing regular depreciation? I always assumed taking the full deduction immediately was always better.
There are definitely situations where regular depreciation is better than Section 179. If you expect to be in a higher tax bracket in future years, spreading the deduction out through regular depreciation could save you more in the long run. Another scenario is if your business income fluctuates a lot. If this year is unusually low but you expect more income next year, saving some depreciation for future years might be smart. Also, some states don't fully conform to federal Section 179 limits, so regular depreciation might be simpler for state tax purposes.
Just be careful with how you document this. I took the full Section 179 deduction counting my W2 income last year and got a CP2000 notice questioning it. Had to send in explanations and reference the exact regulation. Make sure you keep excellent records including invoices for all equipment, proof of payment, business use percentage documentation, and placed-in-service dates.
Did the IRS eventually accept your explanation or did you have to pay additional tax? I'm worried about audit risk since I'm in almost the exact same situation.
They eventually accepted my explanation after I provided the supporting documentation and cited Regs. Sec. 1.179-2(c)(6)(iv). The key was being thorough with my response - I included copies of all equipment invoices, my W2, Schedule C, and a detailed letter explaining how I calculated the deduction using both business income and W2 wages. The whole process took about 3 months from receiving the CP2000 to getting it resolved, but no additional tax was owed. Just make sure you have everything documented upfront and reference the specific regulation when you file. Having that paper trail ready makes all the difference if you get questioned.
Liam Murphy
bruh same. filed in march, still processing. this is my villain origin story fr fr
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Luca Russo
Ugh, I feel your pain! I've been waiting since March too and it's so frustrating. The "still processing" message is like a broken record at this point. I tried calling so many times I could probably recite their hold music from memory š Have you tried checking if there are any issues with your return that might be causing the delay? Sometimes it's something simple like a form that needs verification. Hang in there!
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