$1500 sounds way more reasonable than what I was quoted! Did they provide written documentation of their findings that you could use if you were ever audited?

Yes, they provided a comprehensive memo documenting their research and conclusions for each state. The document included citations to specific statutes, regulations, and rulings that supported their position. They also included a matrix showing taxability by state with color coding for high/medium/low risk areas. This became our "reasonable cause" defense documentation in case of audit, which protects against penalties (though not the underlying tax if you're found to owe it).

Voluntary disclosure agreements (VDAs) can be incredibly helpful if you think you've had past exposure. Most states limit the lookback period to 3-4 years instead of their full statute of limitations, and they'll typically waive penalties. They're relatively straightforward to set up - you can even apply anonymously through a representative in most states until you have certainty about the terms. I'd suggest starting with the states where you have the most sales before they find you through audit or data mining.

Did you claim any tax credits like earned income or child tax credit? Those automatically delay processing until at least mid-February because of the PATH Act.

No tax credits like that. Just a standard return with a W-2 and mortgage interest deduction. Nothing complicated! That's why it's so annoying - my husband's return is actually more complex than mine with business income and he gets his refund in like a week. Meanwhile I'm over here waiting 6+ weeks every year for my simple return. Makes zero sense.

I filed Jan 29 and still waiting lol. So much for the "file early" strategy working for everyone 😂

Thanks for this advice! I just contacted the company and you're exactly right - they have a policy of only issuing 1099-NECs for amounts over $600 per project, and I had several smaller projects that added up to the missing amount. They confirmed I should still report everything. How specifically do I add this to my tax return? Is there a specific line or form for "income not reported on 1099-NEC"?

You'll report all your self-employment income on Schedule C, regardless of whether it was on a 1099 or not. There's not actually a separate line for "income not reported on 1099-NEC" - I was simplifying a bit there. The total income you report on Schedule C should be everything you earned from your business, and the IRS doesn't actually require you to break out what was or wasn't on a 1099 on this form. If you're using tax software, there's usually a section where you enter 1099-NEC information, but there should also be a way to add additional self-employment income. Just make sure your total Schedule C gross receipts equals all the money you received from your business activities.

The basics haven't changed much but the standard deduction amount increases slightly each year. The bigger difference might be that you didn't claim as many business deductions? Also, your income from other sources could affect it. Self-employment taxes are pretty consistent at around 15.3% of net business profit.

That's technically tax evasion though. The IRS doesn't care what payment method you use - income is income. Your friends are still supposed to report that money as taxable income, and you're supposed to deduct it properly as a business expense with documentation.

I mean, I'm just sharing what most creators do in practice, not saying it's 100% by the book. You're right that technically all income should be reported. I guess a better suggestion would be to keep payments under the $600 threshold when possible if you want to minimize paperwork, but still document everything properly on your end so you can deduct those expenses. Even if you don't issue a 1099, you can still claim those payments as legitimate business expenses with proper documentation.

That's not how it works. If you're paying someone for services or work they've done for your business, it's not a gift - it's compensation. The IRS looks at the nature of the payment, not what you call it. Calling business payments "gifts" to avoid taxes is misrepresentation that could get you in trouble.

You HAVE to use your residential address on the BOI form. I tried using my business address and my application got rejected. Had to resubmit with my home address. The whole point of this law is transparency about who actually owns these companies, so they're strict about it.

Well that sucks but thanks for the info. I guess I'll have to use my home address then. Just feels like a privacy invasion when I've been so careful about keeping my home address separate from my business for so long.

For existing companies formed before January 1, 2024, you don't need to report company applicant information at all - just the beneficial owners. If your LLC was formed in 2020, you only need to report yourself as the beneficial owner, not your accountant who helped set it up. If your LLC had been formed after January 1, 2024, then yes, you would need to include your accountant as a company applicant since they filed the formation documents for you.

Thank you so much! That's a huge relief - my accountant retired and moved to Florida so I wasn't sure how I was going to get all his information for the filing.