This has been such an informative discussion! I'm in a very similar situation - received about $1,800 through Apple Pay last year from selling some old tech equipment, friends paying me back for concert tickets and group meals, and a couple small amounts from babysitting for neighbors. Reading through everyone's experiences has really helped me understand the key distinction between personal transactions versus actual income. The tech equipment sales were definitely at a loss (sold my old laptop and gaming console for way less than I originally paid), and the friend reimbursements were clearly just people paying me back - so those don't sound taxable based on all the great advice here. But those babysitting payments were actual compensation for services, so I should report those on Schedule C even though they were small amounts. I had no idea there wasn't a minimum threshold for reporting self-employment income - that's such important information! The clarification about the current $20,000 AND 200 transactions threshold still being in effect has been really helpful too. I was getting so much conflicting information online about whether the $600 threshold had already taken effect. I'm definitely going to start keeping much better records going forward. Maybe I'll start adding quick notes to my transactions as they happen - "Mike's share of dinner" or "babysitting for the Smiths" - anything to avoid this stress next year! Thanks to everyone for sharing their knowledge and experiences.

This entire discussion has been incredibly reassuring! I'm in almost the exact same boat as the original poster - received about $2,100 through Apple Pay last year and was completely stressed about potential tax implications. Like so many others here, most of my transactions were personal - friends paying me back for shared Uber rides and group dinners, selling some old textbooks and electronics from college (definitely at a huge loss compared to what I originally paid), and a few small payments for dog-walking services for neighbors. Reading through everyone's responses has really helped clarify the key distinction between personal transactions versus actual business income. The textbook/electronics sales and friend reimbursements clearly aren't taxable since they were personal transactions and sales at a loss. But I should definitely report the dog-walking payments on Schedule C since those were actual payments for services, regardless of the small amounts. The information about the current $20,000 AND 200 transactions threshold still being in effect (not the $600 threshold) was particularly helpful - I was seeing so much conflicting information online and getting really confused about what rules actually applied. I'm absolutely going to start keeping better records going forward. Maybe a simple note system like others suggested - "Jake's half of dinner" or "dog-walking for Mrs. Chen" - anything to avoid this anxiety next year! Thanks to everyone for sharing their experiences and knowledge. This community has been such a lifesaver for navigating these confusing payment app tax situations!

This thread has been incredibly insightful! I'm coming at this from a slightly different angle - I actually started the EA certification process about 6 months ago but have been questioning whether it's the right path for my goals. Like many of you, I'm primarily interested in optimizing my own tax situation (I have two LLCs and am considering various business expansions), but I found myself getting bogged down in all the client representation procedures that don't really apply to my situation. The amount of time I was spending on memorizing IRS procedural deadlines for client cases felt like a distraction from learning the actual tax strategies I needed. The discussion about AI tools like taxr.ai and the hybrid approach is making me reconsider my strategy. I'm already several hundred hours into EA study, but honestly, I've learned more practical, applicable information from this conversation than from weeks of exam prep materials focused on representation procedures. I think I might pivot to trying these targeted resources while putting the EA certification on pause. If the AI tools can help me analyze my specific business structures and identify optimization opportunities, that immediate value might be exactly what I need rather than pushing through months more of general certification study. Has anyone else switched approaches mid-stream like this, or am I overthinking the sunk cost of time already invested in EA prep?

I've been lurking in this community for a while and this discussion really resonates with me. I'm currently a mid-level manager at a tech company but have been building a side consulting practice and looking at real estate investments. The tax complexity is overwhelming and I find myself in that same cycle of not knowing what questions to ask my CPA. What strikes me about this thread is how many people are in similar situations - we're all knowledge-seeking business owners who want to optimize our taxes but don't necessarily need to become practitioners. The EA path seems like overkill for our goals, especially when you consider the ongoing CPE requirements just to maintain a credential we won't use professionally. The hybrid approach discussion here has been eye-opening. I hadn't considered AI tools for tax strategy, but given how sophisticated these systems have become in other domains, it makes sense they'd be valuable for tax analysis too. The ability to upload your actual documents and get specific advice rather than generic information seems like a game-changer. I'm particularly interested in the LLC to S-corp analysis capabilities mentioned. I've been putting off that decision because getting clear guidance on the break-even point for my specific income situation has been difficult. Having a tool that could model different scenarios based on my actual financials would be incredibly valuable. Think I'll give taxr.ai a try before committing to the EA certification path. Thanks for sharing all these perspectives!

Has anyone mentioned state taxes yet? Remember you'll need to handle those too! Some states have different rules for dependents filing their own returns.

Just wanted to add something that might help with your photography business - make sure you're tracking ALL your business expenses from day one! Things like camera equipment, editing software subscriptions, travel to photo shoots, even a portion of your phone bill if you use it for business calls can be deductible. I started a small videography business at 19 while my parents still claimed me, and I wish someone had told me to keep better records earlier. Even small expenses add up and can significantly reduce your taxable self-employment income. Get a separate bank account for your photography business if possible - it makes tracking so much easier come tax time. Also, don't forget about potential business use of your home if you do editing work there. You might be able to claim a home office deduction even while living with your parents, though the rules are pretty specific about exclusive business use of the space.

Letter 86C is definitely a relief! I remember getting one last year and being so confused by the official language, but it really is just their way of saying "all good, no issues found." One thing I'd recommend is setting up text alerts with your bank if you haven't already - that way you'll know the moment your refund hits. The IRS website also has a "Where's My Refund" tool that updates pretty regularly once they issue the letter. Hang in there, you're almost at the finish line!

Letter 86C is definitely a good sign! I went through this exact same situation last year and was panicking for no reason. The letter basically confirms they've completed their review and found no issues with your return. From my experience, once you receive the physical letter, your refund should be direct deposited within 10-21 days (mine took about 14 days). Pro tip: make sure your banking info is correct on file because any delays there could slow things down. You're almost done with this whole process - the hardest part (the waiting and worrying) is basically over!

Quick question about this - does this same rule apply for state taxes too? My husband and I file separately for federal but jointly for state because our state has better credits for joint filers.

I've been following this thread and wanted to share my experience as someone who went through almost exactly the same situation. My spouse and I had been filing separately for about 6 years, with me itemizing (due to high medical expenses and charitable donations) while my spouse took the standard deduction. Like you, we never received any notices from the IRS, so I assumed we were doing everything correctly. It wasn't until I mentioned our situation to a CPA friend that I learned about the "both must itemize if one itemizes" rule for married filing separately. What really opened my eyes was when we finally did a comprehensive comparison of filing jointly vs. separately (with both of us itemizing correctly). We discovered we had been overpaying by about $1,800 annually! The joint filing gave us access to credits we couldn't claim when filing separately, and even though our combined income pushed us into a higher bracket, the overall tax was still significantly lower. The lesson I learned is that tax situations change over time - income levels, deduction amounts, tax law changes - and what made sense years ago might not be optimal anymore. I'd strongly recommend doing that side-by-side comparison before this year's filing deadline. You might be surprised by the results!