Thanks for this info! Just to clarify, my total from all the trial work was about $540 for the year. Does that mean I definitely have to pay the self-employment tax? And is Schedule C-EZ still available? I thought I read somewhere that the IRS discontinued it a few years ago.

Since your total is over $400, you would need to pay self-employment tax on that $540. It's 15.3% which comes out to about $82.62 in additional tax. You're right about Schedule C-EZ - I apologize for the confusion. The IRS did discontinue it after 2019. You'll need to use the regular Schedule C, but with such a straightforward situation and minimal income, it shouldn't be too complicated. Just list each payment as income and any legitimate expenses you had related to earning that income.

Technically you're supposed to report all income regardless of the amount or whether you received a tax form. But realistically speaking, the IRS isn't likely to audit someone over $300. They typically focus on much larger discrepancies. That said, if you're ever audited for other reasons, they could discover this unreported income. Your call, but personally I report everything just to avoid potential headaches later.

Thank you so much for this insider perspective! That makes a lot of sense. I've been keeping all my bank statements, invoices, and copies of the joint venture agreement, so I should have good documentation. I'll go ahead and report it all on my Schedule C as normal self-employment income. Do you think I should also include a note or explanation somewhere on my tax return about why there's no matching 1099-NEC for this income?

You're welcome! Glad I could provide some clarity from the federal side. I wouldn't add a separate explanation to your tax return - there's no good place for that kind of note anyway. However, when you complete Schedule C, there is a question that asks if you received all required Forms 1099. You can answer "No" to that question, which is sufficient. Just make sure you keep all your documentation organized in case of questions later.

OMG yes! I worked with the EPA on a water quality project and they called me a "cooperating technical advisor" instead of a contractor. But when I asked about taxes they just said "consult your tax professional" which wasn't helpful at all. Government speak is like a whole different language sometimes.

Thanks for bringing this up! I hadn't even considered Form 8938. Do foreign properties always count as "specified foreign financial assets" or does it depend on how they're used?

Foreign real estate directly owned by you generally isn't considered a specified foreign financial asset for Form 8938 purposes. However, if your property is held through a foreign entity like a corporation or partnership, then the interest in that entity would need to be reported. That said, you absolutely need to report the income from the property (rental income, farming profits, or capital gains from selling) on your tax return regardless. And if you have foreign bank accounts where you're depositing the income from these properties, those accounts may need to be reported on both Form 8938 and the FBAR if they meet the thresholds.

This is an important point. I messed up my first year in the US because I didn't understand the dual-status alien filing requirements. Had to do an amended return and it was a nightmare. The year you move to or from the US has special tax considerations.

I've been wondering about this too. What level of income would you say justifies paying for professional tax help vs doing it myself for freelance teaching?

That's a really smart point I hadn't considered. We're doing great, but I guess it makes sense to document everything properly regardless. Better to have clear boundaries even when things are good. Did you just write up something informal or did you use a specific format for your agreement?

We didn't have anything formal which is why it became a problem. What I recommend now (after learning the hard way) is a simple document that states: 1) Both parties' names and the property address, 2) The tax year it applies to, 3) The specific percentage split of mortgage interest and property tax deductions, 4) A statement that both parties understand this arrangement and won't claim more than their agreed portion, and 5) Both signatures and the date. It doesn't need to be notarized or anything fancy - just having something in writing helps prevent misunderstandings. You could even email it to each other so there's a digital timestamp. Some couples renew this agreement each tax year if their financial contributions change.

Smart move with the separate account. I was wondering though - does it matter who actually transfers the money to the mortgage company? Like if the payment comes from a joint account but one person set up the automatic payment, does the IRS care about that detail?