What thresholds should we watch for? Is it the same for all states or does it vary? I'm selling on Etsy and about to expand to Amazon.

The thresholds vary significantly by state. Most common is $100,000 in sales or 200 transactions in a calendar year, but some states have lower thresholds, especially for marketplace sellers. When you expand to Amazon, your nexus footprint will likely increase because of their fulfillment centers. If Amazon stores your inventory in a state, many states consider that physical nexus regardless of sales volume. The good news is Amazon handles sales tax collection in all states, but you may still need business registrations.

I switched from spreadsheets to QuickBooks Online last year and it's been a game changer. Has specific settings for marketplace sales and can track which platform collected tax vs. which sales you need to handle yourself. Bit expensive but worth it for the time saved at tax time.

Should I update my daughter's name with the Social Security Administration to match her legal name? She got married last year but hasn't changed her SS card yet, but we filed with her married name.

Yes, your daughter should definitely update her name with the Social Security Administration to match her legal married name. Filing taxes with a name that doesn't match SSA records can potentially cause issues long-term, even if it works out this year. The process is pretty straightforward - she'll need to complete Form SS-5, provide proof of identity, and documentation of the legal name change (marriage certificate). It's best to do this before next tax season to avoid any potential matching problems in the future.

Different tax software has different validation rules. Some are super strict while others just check the basics before submitting. I use TurboTax and it only warns you but still lets you submit with potential name mismatches.

Thanks for sharing your experience! I dug up my award letter, and it says the stipend is "in recognition of your contribution to the university's summer research program" and mentions my "participation in research activities." No specific hourly requirements, but it does mention the expectation that I would present my research at the end of summer symposium. Would that lean more toward earned income or other income based on your experience?

That language falls somewhere in the middle, honestly. "In recognition of your contribution" suggests compensation for services, which points toward earned income. However, without specific work requirements beyond presenting at a symposium, it's not as clear-cut as having defined responsibilities or hours. If you decide to treat it as earned income, I'd definitely keep that award letter and documentation about the research you performed. From my experience with the audit, they really focused on the specific wording of my award documents. Another consideration - if the stipend amount is relatively small, treating it as other income and forgoing the EITC might be the safest approach. The potential audit hassle might not be worth the benefit, especially since you'd likely still owe self-employment tax if you claim it as earned income.

This is solid advice! Universities sometimes have tax information pages on their websites specifically addressing how to handle various types of stipends, fellowships, etc. Worth checking your school's financial aid or student employment website.

How much do the penalties end up being if the IRS determines you filed incorrectly? I've been told by several ERTC companies that "there's no downside" to applying even if I'm not sure I qualify.

There can absolutely be a downside! The penalties can include repayment of the full credit amount plus a 20% accuracy-related penalty, interest on the repaid amounts, and potentially a 75% penalty for fraudulent claims in worst-case scenarios. These ERTC companies claiming "no downside" are being dishonest. They get their commission upfront, while you're left dealing with the IRS for years if there's an audit. The IRS has explicitly made ERTC abuse an enforcement priority, so the risks are very real. Only file for quarters where you truly meet the eligibility requirements and can document it.

What tax software are you guys using to handle the amended returns? I've been using TurboTax Business but it doesn't seem to have good support for 941-X forms.

Thanks so much for this detailed breakdown! For the cost of production method, would I divide my total mining costs by the number of tokens received to get a per-token basis? Also, when you say "discount for time" for the first market value approach, how would I calculate that?

Yes, you would calculate a per-token basis by dividing total mining costs by the number of tokens received. This gives you a consistent cost basis across all your mined tokens. For the time discount with the first market value approach, you'd apply a reasonable discount rate to account for the time between mining and market listing. Many tax professionals use something like 15-30% annual discount rate to reflect the significant risk of pre-market assets. So if the token was first listed at $10 but you mined it a year before listing, you might use a basis of $7-8.50 per token. However, in your case, the cost of production method is likely the cleaner and more defensible approach since you have those records. Just make sure to include all legitimate costs: electricity, proportional equipment depreciation, and even a reasonable value for your time if you were actively managing the mining operation.

Dangerous thinking there my friend. The IRS might not know immediately, but blockchain is permanent. When you eventually sell on an exchange that reports to the IRS (which most do now), they can see the history. If you suddenly sell tokens you supposedly never had, that raises red flags. Plus, deliberately hiding income is tax evasion, which can mean serious penalties or worse. Not worth the risk just to save a bit on taxes. Better to report properly even with no market value at the time.