How detailed did you get in your non-willful statement? I'm worried about saying too much vs too little. Did you mention specific years or accounts, or keep it more general?

I was pretty specific but concise - about one page single-spaced. I mentioned when I opened each account, why I opened it (moved abroad for work in 2018, needed local banking), and why I didn't know about the reporting requirements (no international tax experience, used regular tax software that never prompted me about foreign accounts). I avoided making excuses but clearly explained my background and why the oversight was genuine. I included specific moments like when I first learned about FBARs and my immediate actions afterward. The IRS seems to appreciate this level of detail as it supports your case for non-willful conduct.

I used TaxAct for my amended returns and then the FinCEN online system for the FBARs. It was doable but required a lot of research. The regular tax software doesn't have great guidance for the Streamlined procedures specifically. If your situation is complex (multiple accounts, business interests, investments), I'd probably get professional help. For basic bank accounts, you might be able to DIY.

Thanks for this! Do you know if I need to do anything special to prove my income since I won't have a 1099? Should I download all my transaction history from the app as proof?

Yes, definitely download and save all your transaction history from the payment app. I recommend exporting it to a spreadsheet if that option is available, and categorizing each transaction (income vs. deposits that will be returned, etc). For tax filing purposes, you don't need to submit proof of income with your return, but you absolutely should keep those records for at least 3 years in case of an audit. Also make sure you're tracking all your business expenses with receipts - things like needles, jewelry, gloves, cleaning supplies, and even a percentage of your phone bill if you use it to schedule clients. Good record-keeping can save you a lot in taxes through legitimate business deductions.

I used TurboTax last year for my dog walking business which also uses payment apps. It worked pretty well - there's a self-employment section that walks you through entering income and expenses, even without a 1099. Just make sure you get the Self-Employed version, not the basic one.

Thanks for this clarification - that makes a lot of sense. I think what I was trying to understand is more about the timing of purchases and legitimate ways to reinvest in the business. Definitely not looking to do anything sketchy or illegal! So for example, if I'm planning to buy that embroidery machine anyway, buying it in December vs January could make a tax difference?

Exactly right! That's legitimate tax planning. If you're going to buy that $5,500 embroidery machine anyway, and you've had a profitable year, purchasing in December lets you deduct it from this year's income (assuming you place it in service before year-end). Remember too that reinvesting profits in your business (buying new equipment, upgrading systems, purchasing inventory) naturally reduces your taxable income because these are legitimate expenses or depreciable assets. This is the legal and proper way to "reduce" taxable income - by growing your business with real expenses, not manufacturing fake ones.

This is great advice! What system do you use to track your materials? I've been trying to figure out a good inventory management approach for my small leather goods business.

How did you come up with that $60-75 figure? Is there a simple calculation to determine the right extra withholding amount?

It's a rough estimate based on the tax brackets. When you have a second job that makes about 25-30% of your main job's income (like the $17k vs $58k in this case), you're typically looking at withholding an extra 22% of the second job's income (since that income is "stacked" on top of your main income and falls into your highest marginal tax bracket). $17,000 × 22% = $3,740 extra tax needed per year. Divide by number of pay periods (usually 26 if biweekly) = about $144 per paycheck. But you can withhold less if your second job is already withholding something, which is why I suggested $60-75 as a starting point. The IRS Withholding Calculator will give you a more precise figure based on your specific situation.

You're correct that it all gets reconciled when you file - you're not evading taxes by having multiple jobs. The issue is just that you might end up with a large tax bill instead of getting a refund. If the amount you owe is large enough (generally over $1,000), you might also face underpayment penalties from the IRS.

Do you know if the donations would affect the basis in our partnership interests? We've been told conflicting things.

Charitable contributions do reduce your basis in the partnership. When the partnership donates property, each partner's basis is reduced by their share of the partnership's basis in the donated property - not by the deduction amount that flows through. This basis reduction is important to track because it affects your gain/loss calculation when you eventually sell your partnership interest. If you don't properly reduce your basis, you could understate your gain (or overstate your loss) on sale, which would be a problem if audited.

Yes, I've done this! For partnership donations, the partnership completes Form 8283 and attaches it to the partnership return. Then each partner also attaches a copy to their individual return. Make sure you complete Section A for items valued under $5,000 and Section B for items over $5,000. Section B requires a qualified appraiser's signature, which can be a pain to arrange. Also, if any single item is worth over $500, you need a detailed description including condition and how you established fair market value.