This is exactly what I'm worried about. I don't want to accuse my customer of anything, but the $9,500 amount seems specifically chosen. How do I protect my business while still maintaining the customer relationship? Should I just tell them I have to file the forms regardless of the payment amount since it's a single debt?

Yes, you should absolutely be transparent with your customer. Explain that since the payments are all related to a single debt, you're required to file Form 8300 regardless of the individual payment amounts. Make it clear this is a legal requirement for your business. If they're legitimate, they'll understand. If they suddenly change their mind about the payment plan or get upset, that's a huge red flag. Remember, filing Form 8300 is just information reporting - it doesn't mean your customer is doing anything wrong, but failing to file when required can result in serious penalties for YOUR business.

I file them regularly for my jewelry business. It's not terrible - basic info about your business, the customer (name, SSN/tax ID, address), and transaction details. You can e-file through the BSA E-Filing System. The trickiest part is knowing WHEN you need to file, not actually completing the form.

What happened after you got hit with the tax bill? Did you ever try to get it corrected or did you just pay it? I'm in a similar situation but with a restaurant that closed down, so I'm not even sure if the owner is still around to issue a corrected form.

I ended up paying it the first year because I didn't know any better. The second year, I filed the SS-8 form proactively and got a determination letter from the IRS saying I was indeed an employee. I took that to the owner, who initially resisted but changed his tune when I mentioned the potential penalties for misclassification. He issued a corrected W-2 for that year. For the previous year, I filed an amended return with the determination letter and got about $1,600 back. Even if your restaurant closed, you can still file the SS-8 and possibly get a determination that helps with your taxes. The owner being gone doesn't prevent the IRS from making a ruling on your status.

Getting paid through Cash App doesn't determine your worker status - that's based on the nature of your working relationship. However, you're right about the reporting change. Cash App (and similar payment services) are required to issue 1099-Ks for accounts receiving over $600 in payments for goods and services. This is separate from whether your employer issues a 1099-NEC or W-2. The IRS may notice if you receive a 1099-K from Cash App but don't report that income, regardless of whether you also get a 1099 or W-2 from the employer. So the income definitely needs to be reported either way, but the classification as employee vs. contractor determines HOW you report it and how much tax you pay.

Thanks for explaining! So if I'm understanding right, I could potentially get both a 1099-K from Cash App AND either a 1099-NEC or W-2 from my employer for the same income? That seems like it would cause confusion with the IRS. How would I make sure I'm not double-reporting the same income?

Doesn't using a PEO create complications with the S-Corp structure though? I heard that can cause issues with how distributions are handled versus salary.

No complications with the S-Corp structure at all. The PEO only handles the employment administration side - payroll processing, tax filings, compliance, etc. You still maintain complete control over your business operations and how you structure your compensation. Your S-Corp still exists exactly as before, and you can still take distributions separate from your salary. The PEO simply handles the W-2 employee portion of your compensation. Actually, many PEOs have specific expertise with S-Corps and can help ensure you're maintaining the proper salary-to-distribution ratio to satisfy IRS requirements while maximizing tax benefits.

You technically can do this, but you need to be careful. The IRS expects regular, reasonable compensation for services performed. Running payroll just once or twice a year with large amounts can raise red flags, especially if you're taking distributions throughout the year.

Did you find any good way to automate the collection of exemption certificates? We're struggling with getting schools to promptly provide their exemption documentation, and it's creating a bottleneck.

We built a simple upload portal as part of our onboarding process where organizations couldn't list events until they uploaded their exemption certificates. We also created state-specific templates with instructions that made it easier for them to provide exactly what we needed. For schools specifically, we found that being very clear about the consequences of not providing documentation (i.e., we'd have to charge their students/parents sales tax) motivated them to respond faster. Most schools already have these certificates on file, so it's just a matter of getting the right person to share them.

Great question about physical presence. While marketplace facilitator laws create nexus for the online sales portion, the physical location of events can indeed trigger additional tax considerations. In some states, there might be amusement taxes, entertainment taxes, or special venue taxes that apply based on where the event physically takes place. These are separate from sales tax on the tickets themselves and may have different filing requirements.

What about staking rewards? Are those taxed when received or when sold?

Staking rewards are generally taxed as ordinary income when you receive them, based on their fair market value at that time. They establish your cost basis for those coins. Then, when you eventually sell those staking rewards, you'll calculate capital gains/losses based on the difference between your selling price and that initial value when received. This is similar to how mining is treated - taxed as income when received, then potentially subject to capital gains tax when eventually sold.

Form 8938 is for "specified foreign financial assets" - the IRS hasn't definitively stated that crypto qualifies for this. Most tax pros are taking the conservative approach and including crypto if it's held on foreign exchanges and meets the threshold. Better safe than sorry with FBAR and 8938 reporting!