Can you really put it on line 8z though? I thought all self-employment income HAD to go on Schedule C regardless of the amount? That's what my friend who does accounting told me.

For very small amounts without expenses, the IRS has allowed this simplified reporting method. If you're claiming expenses though (like mileage), you absolutely need Schedule C. I should clarify though - the "proper" way is Schedule C, and that's what most tax pros will recommend to be 100% compliant. The line 8z approach is more of a practical solution for tiny amounts where you're not claiming deductions. Schedule C is definitely the correct technical answer for any self-employment income.

The chances of being audited for missing $180 are extremely low, but technically yes, you're supposed to report all income. The IRS generally has bigger fish to fry than chasing tiny unreported amounts, but it's still not the right approach. Maybe report it correctly this year?

Thank you! This makes perfect sense and matches what I was expecting the formula would be! I've been driving myself crazy with spreadsheets trying to figure this out. So basically, the formula is proportional to where you fall in the phase-out range, and the multiplier changes based on the contribution limit. That would explain why the TIAA calculator was giving different results than my calculations using the 0.3 factor from 2022.

Exactly! The IRS documentation just hasn't caught up with the contribution limit increases. The key insight is that the phase-out is designed to be linear across the MAGI range, so you need to adjust the multiplier whenever the contribution limit changes. It's frustrating that they don't explain this clearly, but at least now you can plan appropriately for your 2023 and 2024 contributions. And remember this formula will likely change again whenever they next increase the contribution limits!

Good point! Do you know if the Saver's Credit can be claimed for Roth IRA contributions? If I end up putting some money in Roth because I'm in the traditional IRA phase-out range, can I at least get the Saver's Credit for those contributions?

This is really helpful! Is this something I need to manually override in TurboTax? Or is there a specific section where I should be entering this information?

In TurboTax, you need to look for the section about "home sale" or "sale of home" and there should be questions about how long you owned and used the home. When it asks why you sold before meeting the 2-year requirement, select "divorce" or "unforeseen circumstances." If you can't find this option, you might need to use the "form view" rather than the interview format. Look for Form 2119 in TurboTax. If you're still having trouble, the "Help" search function in TurboTax and searching for "partial exclusion" should guide you to the right section.

This! When I got divorced last year, my accountant made this exact point. Each person files their own portion. Your gain would be even smaller if split properly.

Thank you for pointing this out! I think this might be part of the problem because I was trying to figure out how to split everything in TurboTax and wasn't sure if I was doing it right. So I should be reporting only half of everything - half the purchase price, half the selling price, and half of all the associated costs?

That's a good point about the business vs. hobby classification. I'm definitely making a consistent profit when you factor in the cash back, and I've been doing this for about 2 years now. Do you think I need to register as an actual business in California, or is just filing Schedule C enough?

Filing Schedule C is enough for federal tax purposes, but California may have additional requirements. If you're operating as a sole proprietor (just yourself), you typically don't need a formal business registration with the state unless your local county/city requires business licenses for your type of activity. However, if your annual gross receipts are over $100,000, you might need to register for a seller's permit with the California Department of Tax and Fee Administration, even for gold coins. I'd recommend checking with your county clerk's office about any local business license requirements as they vary by locality. Better to be compliant from the start than face penalties later. Given the nature of dealing with valuable items like gold coins, being properly registered might also give your customers more confidence.

This is incorrect. Cash back on purchases is considered a discount or rebate, not reportable income, even if it exceeds $600. Banks only issue 1099s for referral bonuses, sign-up bonuses, or interest income - not for cash back on purchases. The IRS views cash back as effectively reducing the purchase price.

Thank you so much for this suggestion! Would reporting them to the IRS interfere with my ongoing case with the department of industrial relations? I'm definitely going to call them about the W-2 issue.

Not at all - these are completely separate issues being handled by different agencies. The IRS is concerned with tax compliance (providing W-2s), while the department of industrial relations handles wage theft and payment issues. You should absolutely pursue both avenues simultaneously. In fact, the pressure from multiple agencies often motivates employers to resolve issues faster. The IRS penalties for not providing W-2s can be significant, which might get their attention in a way your individual requests haven't.

This is good advice. I actually took screenshots of all communications with my former employer when they wouldn't give me my W-2. The IRS never questioned my Form 4852, but I was prepared just in case.