That works until the IRS comes asking why you're receiving money from your partners that isn't being reported as income. Cash transfers between individuals over a certain amount get flagged. Plus OP mentioned this could grow to $200k territory - definitely not something you want to handle informally at that point.

Good point about the potential growth. I was just thinking about the current amount. You're right that once you start moving larger sums of money between individuals, the IRS starts to take notice. I still think for the current small amount, informal handling might be fine, but you're absolutely right that they should establish proper structures now if they're anticipating growth to $200K. Setting things up correctly from the beginning is much easier than trying to correct issues later, especially with the IRS involved.

I was thinking the same thing. "Too many W-9s" isn't a real issue. You don't "use up" W-9s. Something doesn't add up with their reasoning.

Would filing Form 8919 cause problems for future tax returns if the SS-8 determination takes a long time? I've heard those can take 6+ months to process. Also, since we have literally zero documentation (no emails, texts, or anything in writing about employment), would this approach even work?

Filing Form 8919 won't directly cause problems for future returns, but if the SS-8 determination eventually comes back not in your favor, you might need to file an amended return and pay the additional self-employment tax plus potential interest. It's a bit of a gamble. With zero documentation, your case for employee classification is definitely weaker. The SS-8 form asks about specific factors like who controlled the work schedule, provided tools/equipment, determined how the work was done, etc. If the answers to these questions indicate contractor status, or if you can't provide any supporting evidence, the determination might not go your way. For only $2,100, the Schedule C route might be simpler unless you have strong verbal evidence of employee status.

This is absolutely true! I was misclassified last year and after adding up all my legitimate expenses (mileage, portion of phone bill, home office, supplies), I actually ended up with less tax liability than if I'd been properly classified as an employee. Just make sure you have documentation for everything in case of an audit.

Should I write my SSN on the check? I heard that's what you're supposed to do but it feels weird writing my full social on something going through the mail.

Yes, you should write your SSN on the check - but only the last four digits for security. Also include the tax year (2022) and write "Form 1040" on the memo line. This helps the IRS properly apply your payment if it gets separated from your return. Writing this info on the check is actually a security measure to ensure your payment gets credited to the right account, so don't skip this step even though it seems counterintuitive.

Thanks for this detailed breakdown! This helps a ton. I'll definitely send it certified with tracking. Do you think I should wait for them to bill me for the penalties or should I call them after sending the return to see what the total is?

Just wait for them to bill you for the penalties. There's no need to call them proactively - it'll just waste your time with their long hold times. They'll automatically send you a notice with any additional amount due, and you'll have time to pay it. If you don't receive anything within 3-4 months after sending your return, then you might want to call to confirm everything was processed correctly. But most likely, you'll either get a small bill for penalties or nothing at all if they decide the amount is too small to pursue.

Wait, that 3rd point seems to contradict what the first comment said. So if I have $4,000 in just dividends and interest, and nothing else "unearned," I might not need the form? Can you explain more?

There's actually a simplified method for reporting a child's income on a parent's return that can be used instead of Form 8615 in certain circumstances. This is Form 8814, "Parents' Election to Report Child's Interest and Dividends." The requirements are pretty specific though. Your unearned income must be only from interest, dividends, and capital gain distributions, AND be less than $12,000. Also, you can't have made any estimated tax payments or had any federal tax withheld, and no advance child tax credit payments can have been made. You also must be under 19 (or under 24 if a full-time student).

Yes, capital gains from stock trades are considered unearned income for Form 8615 purposes. So your $2,800 in stock gains plus $300 in interest would total $3,100 in unearned income, which exceeds the $2,400 threshold for 2025 filing season. Since you're 20, a student (I'm assuming), and claimed as a dependent, you would need to file Form 8615. The portion of your unearned income that exceeds $2,400 would be taxed at your parents' tax rate rather than yours.

1 This is really good to know - we have some Tesla stock that's up quite a bit. Do all charities accept stock donations though? And is it complicated to do?

4 Not all charities can accept stock directly, but many of the larger ones do. For smaller charities, you can use a donor-advised fund (like at Fidelity, Schwab, or Vanguard) as an intermediary - you donate the stock to the fund (getting your tax deduction immediately) and then grant the cash to any charity later. The process isn't too complicated. If donating directly to a charity, you'll need to get their brokerage information and fill out a transfer form with your broker. For a donor-advised fund, you just open an account and follow their transfer instructions. The whole process usually takes less than a week. Just be sure to complete it well before the end of the tax year - I'd recommend finishing any stock transfers by early December to be safe.

22 Is the mileage deduction the same as the business mileage rate or is it different for charity work?