How far back should I be looking for these adjustment notices? I had a similar situation but the deposit came nearly 18 months after I filed that year's taxes. Would they really be making adjustments that far out? And what's the best way to get my address updated with the IRS if I've moved?

The IRS can make adjustments going back several years - typically up to 3 years after you filed, but sometimes even longer in certain situations. So 18 months is definitely within their normal timeframe for making corrections or adjustments. The best way to update your address with the IRS is to file Form 8822 (Change of Address). You can also update it on your next tax return, but that doesn't help if they're sending notices now. Alternatively, you can change your address by writing a letter to the IRS that includes your full name, old and new addresses, social security number, and signature. If you've set up an online account at IRS.gov, you may also be able to view some notices electronically even if the physical copies went to an old address.

Yes, the IRS absolutely does request refund returns if they were made in error! My cousin works for a tax firm and sees this all the time. If you spend the money and then get a notice saying it was sent by mistake, you'll still be responsible for returning the full amount. They might work out a payment plan, but they WILL want their money back if it's not actually yours. You should probably start setting aside what you can now just in case.

Is there any way to separate personal payments from business ones on these apps? Like if friends pay me back for dinner through Venmo vs clients paying for services?

Yes, most payment apps now allow you to flag transactions as personal or business. PayPal and Venmo both have this feature - you should use it consistently. The personal transactions shouldn't count toward the 1099-K threshold, but the business ones definitely will. Also, I recommend having separate accounts if possible - one for personal use and one strictly for business transactions. Makes record-keeping much cleaner and helps if you ever face questions about what was business versus personal.

That's actually a really good point I hadn't considered. I've been preferring cash to "avoid the hassle" but my long-term goal is to grow my business enough to get financing for equipment upgrades.

Exactly - when I applied for financing to buy a work truck, the lender wanted to see consistent business income. My payment app history and bank statements showing regular business deposits were crucial for approval. Cash-only would have made that much harder. You should also look into a business banking account if you don't have one already. Many banks offer free business checking for small operations, and it further legitimizes your business when seeking loans or credit.

Does the tax software ask for information about each individual bet, or just the totals from your yearly statement? Also, do you need to keep records of every single bet in case of an audit?

The software typically just asks for your totals, not each individual bet. Usually you'd enter your total winnings and total losses based on the statements from your sportsbetting platforms. As for records, yes, you should definitely keep documentation of all your bets in case of an audit. The IRS requires "adequate records" for gambling activities, which means either a betting log or statements from the platforms showing all your activity. Most tax professionals recommend keeping these records for at least 3 years after filing (the standard audit window), though some suggest 6 years to be extra safe.

That's a good point! I received a 1099-K from one platform but nothing from another, even though I definitely won money on both. Does that mean the second platform didn't report my winnings to the IRS?

Thanks so much for sharing your experience. That's actually really reassuring. Did you file yourself or use a tax professional? I'm debating whether I should try to DIY this or if it's worth paying someone at this point.

I started trying to DIY it using one of the major tax software programs, but got stuck on how to handle some of my 1099 business expenses. I ended up hiring a CPA who specializes in late filings, which cost me about $350 but was totally worth it. She found several deductions I would have missed on my own, which saved me more than her fee. Plus she knew exactly how to request the payment plan and advised me on the penalty abatement request. If your situation involves 1099 income with business expenses, I'd definitely recommend getting professional help. If it was just W-2 income, you could probably handle it yourself.

Also worth noting that you can't e-file prior year returns (after a certain point). You'll have to print and mail them. Make sure to send it certified mail so you have proof of when you filed it!

Damn, hadn't even thought about state tax differences. I'm in Texas so I think we don't have state income tax, but I'll double check. Does anyone know if there are any other gotchas I should watch out for with crypto taxes?

You're lucky being in Texas then! No state income tax means you only need to worry about the federal side of things. Another gotcha to watch for is the wash sale rule situation. Currently, crypto isn't subject to the same 30-day wash sale rules as stocks, which means you could technically sell your altcoins for the tax loss, then immediately rebuy them if you still want to hold them long-term. The IRS could change this rule in the future, but for tax year 2025, you're still able to do this. Just make sure you actually execute the sale - moving coins between your own wallets doesn't count as a taxable event.

This is so true. Friend of mine tried to "forget" about $8k in crypto gains and got absolutely hammered with penalties. The exchanges are definitely reporting to the IRS now - this isn't the wild west anymore.