I'm also cycle 05 and verified about 10 days ago through ID.me. Reading through everyone's experiences here, it seems like the timing really varies even within the same cycle. What's been helpful for me is checking my transcript early Friday mornings since that's when cycle 05 typically updates. I've noticed that some people are getting their 846 codes faster this year compared to 2023, but like Mateo mentioned, I'm trying not to get my hopes up too much. Has anyone else noticed if the method of verification (phone vs ID.me) actually makes a difference in processing speed? The IRS agent I spoke with wasn't clear on that detail.

I'm cycle 05 and verified through ID.me exactly 9 days ago. Still refreshing my transcript every morning like it's my job! 😅 What I've found helpful is tracking the actual update days - @Aisha Khan's highway analogy really resonates with me. I've been keeping a simple log of when other cycle 05 folks get their 846 codes to see if there's a real pattern. So far, I'm seeing most people get theirs between days 10-16 after verification, with Thursdays/Fridays being the most common update days. @Ethan Taylor's 12-day timeline gives me hope since I'm almost there! Has anyone else noticed if having direct deposit vs. paper check affects when the 846 code appears? I know it doesn't change the actual refund timing, but curious if it impacts transcript updates.

One thing nobody mentioned yet - you need to track your inventory carefully even with dropshipping. Even though Printful handles fulfillment, the IRS considers you the seller. I use a simple spreadsheet with: - Date of sale - Product cost (what Printful charges you) - Sale price (what the customer pays) - Platform fees (Amazon's cut) - Shipping costs - Net profit This makes filing Schedule C WAY easier and helps you calculate your true profit for self-employment tax purposes. You don't want to overpay by calculating tax on your gross sales!

One thing to consider is setting up as an LLC and electing S-Corp taxation once you're consistently profitable. I did this with my dropshipping business last year. The main benefit is that you can pay yourself a reasonable salary and take the rest as distributions, which aren't subject to self-employment tax. Saved me about 15% tax on a significant portion of my income. Obviously you'll want to wait until your business is consistently making at least $30-40k profit before this makes sense due to the additional costs of payroll services and state LLC fees.

You might also want to look into setting up a SEP IRA or Solo 401(k) for retirement. As a 1099 contractor, you're eligible for these self-employed retirement accounts which let you put away WAY more than regular IRAs. This won't help with last year's taxes, but could significantly reduce your tax bill going forward. With a Solo 401(k), you can contribute up to $22,500 as an "employee" for 2023 PLUS an additional 25% of your net self-employment earnings as the "employer" (up to combined limits). These contributions are tax-deductible and reduce your taxable income.

One thing I haven't seen mentioned yet is keeping a mileage log if you drove your own car for any gigs. Even if you took Uber most of the time, any personal vehicle use for work can be deducted at the standard mileage rate (65.5 cents per mile for 2023). Also, don't forget about smaller expenses that add up - things like phone chargers, portable batteries, or even hand sanitizer if it was required for your gigs. These might seem minor but they're legitimate business expenses if purchased specifically for work. Since you owe $7k, you might want to look into making quarterly estimated tax payments for this year to avoid owing a big chunk again. The IRS expects self-employed folks to pay as they go rather than all at once in April. You can set up payments through EFTPS or pay online to avoid penalties next year.

I completely understand your confusion and concern about this unexpected deposit! Based on all the helpful experiences shared in this thread, it's clear that "TCS TREAS 449" deposits are actually quite common and almost always legitimate. As a tax professional, I can confirm that this code is specifically used by the Treasury Department for official tax refunds and credit adjustments. Given that you filed in February and already received your regular refund, this is most likely the result of an automated review where the IRS recalculated one of your credits and found you were entitled to more money. The most commonly adjusted credits include the Child Tax Credit, American Opportunity Tax Credit, Earned Income Credit, and Premium Tax Credit. The amount of $837.42 seems very reasonable for this type of adjustment. My recommendation would be to log into your IRS online account at irs.gov first - this will give you immediate answers about what triggered the adjustment. You can view your account transcript there which will show exactly what the payment represents. This is much faster than calling the IRS or waiting for an explanation letter to arrive. While it's always prudent to verify before spending unexpected money, you can feel confident that Treasury 449 deposits are legitimate. The IRS has been conducting systematic reviews of returns and frequently finds that taxpayers didn't claim all the credits they were entitled to. You should receive a CP notice in the mail within 1-3 weeks explaining the adjustment, but checking online will give you peace of mind right away. Don't stress about this - it sounds like the IRS found additional money you were rightfully owed, which is actually great news!

I completely understand your confusion about this unexpected deposit! As a newcomer to this community, I can see from all the helpful responses that "TCS TREAS 449" deposits are actually quite common and usually good news. Based on everyone's experiences shared here, this code is specifically used by the Treasury Department for legitimate tax refunds and credit adjustments. Since you filed in February and already got your regular refund, this is most likely the result of an IRS review where they found you qualified for additional credits you didn't fully claim. The amount of $837.42 seems very reasonable for a credit adjustment. Common ones include the Child Tax Credit, American Opportunity Credit, or Earned Income Credit - all of which the IRS frequently recalculates after processing returns. My suggestion would be to check your IRS online account first at irs.gov - you can view your account transcript there which will show exactly what this payment is for. This is much faster than calling or waiting for a letter. Based on all the positive experiences shared here, you can probably stop worrying and feel confident this is legitimate money you're entitled to keep! The IRS has been doing lots of these systematic reviews lately and often finds people didn't claim everything they were owed. It's actually nice when they find extra money for us instead of the other way around!

Forgetting all the tax stuff for a sec... curious what website platform you're using to sell hats? I'm trying to start something similar but can't decide between Shopify and WooCommerce. Any recommendations?

This is such a comprehensive discussion! As someone who just went through setting up tax handling for my small business, I wanted to add one more perspective that might help. Consider reaching out to your state's Small Business Development Center (SBDC) - they often have free consultations specifically for tax questions like this. I met with one of their advisors and they walked me through exactly how to handle promotional items in my state, plus they gave me templates for tracking different types of transactions. The advisor also mentioned that some states are getting stricter about use tax enforcement, especially for online businesses, so it's definitely worth getting this right from the start. They emphasized keeping detailed records of promotional giveaways since those are often the transactions that get scrutinized during audits. For what it's worth, I ended up going with the approach Anna mentioned - buy everything tax-exempt with my resale certificate, then self-assess use tax on promotional items. It's been working well and my accountant approved the process when I had my books reviewed. Good luck with your hat business! The tax stuff seems overwhelming at first but once you get a system in place it becomes routine.