1 She's from South Korea. We've been looking at the tax treaty but it's really confusing to interpret. There's something about retirement accounts but nothing specifically mentioning HSAs from what we could find.

22 South Korea does have a tax treaty with the US, but you're right that it doesn't specifically address HSAs. Unfortunately, HSAs are relatively unique to the US tax system. The general rule still applies here - if she's a Non-Resident Alien (which it sounds like she is), she's not eligible for an HSA under US tax law regardless of the treaty. The treaty mainly affects taxation of income, dividends, interest, etc., but doesn't create eligibility for tax-advantaged accounts where it doesn't otherwise exist. I'd still recommend getting those contributions distributed from the account to avoid penalties. Once distributed, the tax treaty might affect how those funds are taxed, but it won't make the contributions valid retroactively.

17 Good point! Many people don't realize this. An HSA requires enrollment in a qualified HDHP with specific deductible minimums and out-of-pocket maximums.

How long after a debt is forgiven can they still issue a 1099-C? I had a credit card debt settled 3 years ago and just got a 1099-C for it this year!

There's technically no strict time limit for when a lender must issue a 1099-C after debt forgiveness occurs, but they should generally issue it for the tax year in which the identifiable event (like your settlement) took place. However, many lenders operate on their own internal timelines based on when they officially "write off" the debt in their accounting systems. Receiving a 1099-C three years later is unusual but not unheard of. The challenge now is that you may need to amend previous tax returns if you didn't report the forgiven debt in the year the settlement actually occurred. You should consult with a tax professional about filing Form 1040-X to amend the return for the year when the debt was actually settled, rather than the year you received the late 1099-C.

I tried using Credit Karma for this last year and they don't handle Form 982 very well. Had to switch to TurboTax Deluxe which has a much better walkthrough for the insolvency worksheet and Form 982. Paid like $70 but worth it for the peace of mind since I was dealing with about $23k in forgiven debt.

Oh crap, I didn't even think about state requirements! I'm in California - does anyone know if I need to file something separate for my LLC at the state level?

California requires an automatic 6-month extension for filing your state personal income tax return, so you don't need to file a separate extension form for that. However, you still need to pay any estimated tax you owe by the original due date. For your LLC specifically, California requires an annual LLC tax of $800, which is due by the 15th day of the 4th month of your taxable year (April 15 for calendar-year taxpayers). This payment isn't extended by your personal extension, so make sure you've paid that already if it applies to you.

I've been using QuickBooks Self-Employed for my single-member LLC and it's been great for tracking everything. It even has a tax estimation feature that helps you set aside the right amount each quarter.

What about if my side hustle truly can only be done in certain locations? I make custom furniture and sometimes source special wood when visiting my parents in Oregon. These woods aren't available where I live.

That's a more defensible position. If you can document that you're sourcing materials unavailable in your area, and if this activity is central to your business model, you've strengthened your case for the business purpose of the trip. Keep receipts for the materials purchased, document why these specific materials are necessary for your business, and maintain records showing how these purchases translate into business products and revenue. Remember though - if visiting parents is still the primary reason for timing the trip, you might only be able to deduct the specific business activities (like the extra mileage to visit lumber suppliers) rather than the entire trip cost. The IRS will still look at whether you would have made this trip without the personal component.

I went through one last year for my consulting business. What saved me was having a detailed calendar showing all appointments before the trip was booked, emails setting up meetings, receipts with business purpose noted, and a time log showing how many hours were spent on business vs personal activities. The auditor specifically mentioned that having documentation created BEFORE the trip (proving business intent) was key.

So if I'm understanding right, getting multiple similar 1099s might actually hurt you by making it more likely to be considered self-employment instead of a hobby? That seems backwards - wouldn't more activity make it more hobby-like?

It's actually the opposite - more regular activity in a similar field makes it look more like a business than a hobby. The IRS tends to view consistent income-generating activities as evidence of a profit motive, which is a key factor in the business determination. The logic is that someone with multiple income streams from related activities (like content creation, product reviews, sponsored posts) is demonstrating a pattern of trying to make money in that field, even if each individual activity is small. A hobby is more typically something you do primarily for enjoyment with occasional or incidental income.

There's no specific dollar threshold in the tax code. It's more about the nature of the activity than the amount. That said, from practical experience, smaller amounts are less likely to trigger IRS scrutiny if reported as hobby income.

One thing to consider: even if you classify as hobby income, you still need to report it. Don't make the mistake of thinking small 1099s can be ignored! The IRS gets a copy of every 1099 issued to you.