Oh man, I completely forgot about state filings! I'm in California - do you know if they have different forms or deadlines than the federal?

California is actually one of the toughest states for S-corps. You need to file Form 100S, and they have an $800 minimum franchise tax that you have to pay even if your business lost money. The deadline typically matches the federal (March 15), but the penalties for late filing can be significant. You should also check if you need to file a Statement of Information with the Secretary of State (Form SI-200) - that's separate from tax filings but required for corporations, usually due annually.

Is there any safe harbor provision for this? Like if it's your first year in business?

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?

Do you need to include any kind of documentation or proof of the survey income when you file? Or do you just report the total amount? I'm worried about getting audited.

You just report the total amount on your tax forms - no need to attach any documentation when filing. But you should absolutely keep records (payment screenshots, spreadsheet of earnings, withdrawal confirmations) for at least 3 years in case of an audit. Don't stress too much about audits - they're rare, especially for simple returns with modest income. The key is being honest about reporting ALL income and having reasonable documentation to back it up if ever questioned. My spreadsheet plus screenshots of payment summaries from each site has been more than sufficient for the past 5 years.

I combine all my "opinion-based" work on one Schedule C. The business code I use is 541910 for "Marketing Research and Public Opinion Polling" which covers surveys and user testing. If your activities are all related to giving opinions and testing, one Schedule C is fine. If you have very different activities (like surveys + selling crafts), then separate them.

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! 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?