2 Do you need to include the client's info anywhere on the form? I don't even have the business address for the guy who ghosted me, just a name and phone number he no longer answers.

15 You don't need to include the client's information when reporting income without a 1099. The key part is accurately reporting the income amount. On Schedule C, you'll report the total income received, and there's no requirement to list individual clients or their contact information. If this was your only freelance client for the year, you can use a basic description of the work in the "business name" field like "Freelance Marketing Services" - or if you had multiple clients, something like "Various Marketing Clients" works fine. The IRS is mainly concerned that you're reporting all income, not the specific details of who paid you.

11 Ugh, I learned this the hard way too. Got slapped with penalties my first year. For 2024, the estimated payment due dates are April 15, June 17, Sept 16, and Jan 15 (2025). Mark your calendar now!

Do we know which states will be included when they eventually expand? I'm in Texas so we don't have state income tax anyway, but curious about the rollout plans.

The IRS hasn't announced specific states that will be included in future Direct File expansions. The rollout will likely depend on which states are willing to partner with the federal system, so it will vary. For Texas residents like yourself, you're actually in a good position since you don't have state income tax to worry about. Direct File is already a complete solution for you. The taxpayers who have to deal with this two-step process are those in the 41 states plus DC that have income tax filing requirements.

Thanks for the tip! I wish I'd known this before paying for TurboTax. Will definitely check Colorado's website for next year. Did you have to re-enter all your information or was there a way to import data from your federal return?

Not a dumb question at all! For tax purposes, the nature of the service generally doesn't matter - all self-employment income gets reported on Schedule C. The IRS doesn't treat "phone service" income differently than tutoring or other services. What DOES matter is properly classifying whether you're an employee (W-2) or independent contractor (1099), and ensuring you keep good records of business expenses that could be deductible. You might also need to look into quarterly estimated tax payments if your side income is substantial.

Thanks for clarifying! That makes me feel better. One follow-up question - do I need to be super specific about the nature of the service when filling out Schedule C, or can I just put something general like "consulting services"?

Thanks for pointing that out! I definitely plan to report the income properly. I was mainly trying to figure out the timing (this year vs. next) and what forms I'd need. Sounds like I should probably just provide my SSN now and deal with it on this year's taxes instead of waiting. Really appreciate everyone's advice!

You're making a smart choice! It's always better to handle tax situations promptly rather than letting them linger. And yes, providing your SSN now would be the proper approach - you'll get the correct documentation (likely a 1099-NEC), which will make reporting much simpler. One other tip: since this is self-employment income, keep track of any related expenses that might be deductible. Even for a small amount like $850, deductions can still help reduce your tax liability a bit. Good luck with your taxes!

That's really interesting about the "detached and disinterested generosity" definition. How would the IRS even determine if there was an expectation of something in return? Seems pretty subjective. Would they look at things like whether the gift-giver had cases before the court?

The IRS would look at the relationship between the parties, the timing of the gifts, and any pattern of behavior that might suggest the transfers weren't purely generous. They consider factors like whether the giver had business before the recipient (in this case, cases before the court) and whether the amounts seem disproportionate to their personal relationship. You're right that it's subjective and often difficult to prove. The burden would be on the IRS to demonstrate that the transfers weren't genuine gifts. For high-profile situations, they might examine communications between parties, the history of their relationship, and whether the recipient took actions that benefited the giver after receiving the gifts. But these cases are complex and rarely straightforward.

Do you know what the threshold is for gifts that Supreme Court justices have to disclose? $2.4 million seems WAYYY above any reasonable threshold. And what happens if they don't disclose properly? Any actual consequences?

Did you have to get a separate business bank account and strictly separate personal vs business expenses? That part seems complicated.

Yes, keeping separate accounts is absolutely essential. I have a dedicated business checking account, savings account, and credit card that I ONLY use for business expenses. This creates what accountants call a "clean separation" between personal and business finances. This separation is critically important when you have an S-Corp to avoid having your corporate veil pierced in case of legal issues. It also makes bookkeeping much easier and helps prove to the IRS that you're operating a legitimate business. Mixing personal and business expenses is a huge red flag that can trigger audits.

I use Justworks for my S-Corp and it's been amazing. They handle all payroll taxes, compliance filings, and even offer health insurance options that are better than what I could get as a tiny business. It costs a bit more than basic payroll ($49/month per employee) but the time savings and reduced stress are worth it.