Anyone know if this applies the same way for Schedule SE 2023? My husband and I are in similar situation but neither of us hit the $160,200 limit individually although together we go over. Am I understanding right that we'll both owe the full 12.4% SS tax on our side hustle income? That seems so unfair when couples who have one high earner wouldn't pay this!

I've been a tax preparer for 15 years and this is one of the most common misconceptions I see with married couples who both have self-employment income. The key thing to remember is that Schedule SE is NOT affected by your filing status - it's always calculated individually. Even though you file a joint return, Social Security benefits are earned individually, so the taxes that fund them are also calculated individually. Each spouse needs their own Schedule SE, and line 8A should only include that person's individual W-2 wages, never the combined amount. One tip: if you're doing this yourself, make sure you're using the correct wage base limit for the tax year you're filing. It increases almost every year due to inflation adjustments. Also, don't forget to claim the deduction for the employer portion of self-employment tax on your joint return - that's one place where filing jointly actually helps you!

My husband and I went through something similar with his parents. Make sure your accountant checks with you before filing! Our new accountant filed it as a rental property without telling us (after we had discussed it wasn't) and we ended up having to file an amended return. One option might be to increase the rent to meet the 80% threshold if your in-laws can afford it, then gift some money back to them separately if you want to effectively subsidize their housing. But talk to a qualified tax professional about this approach first!

I'm dealing with a similar situation where I'm renting to my brother at below market rate. After reading through all these responses, it sounds like the key issue is whether you're charging at least 80% of fair market rent. At $850 vs $2000 market rate, you're only at about 42%, so you'd definitely fall under the personal use/hobby loss rules. This means you can report the rental income but your deductions would be limited to that income amount - you couldn't create a loss to offset other income. The advice about potentially raising the rent to meet the 80% threshold is interesting, but make sure any gifting arrangement is done properly to avoid gift tax issues. The annual gift tax exclusion for 2024 is $18,000 per recipient, so you'd need to stay within those limits. Your previous accountant's conservative approach was probably the safest way to handle it. Better to be cautious with the IRS than risk an audit over aggressive deductions on a family rental situation.

Just to add onto what others have said - make sure you're keeping meticulous records. For my LLC, I created a simple spreadsheet that tracked: - Date of purchase - Vendor/merchant - Amount - Business purpose - Who paid (me or my partner) - Date of reimbursement This helped tremendously when our tax time came around. Our accountant said the key is being able to show the clear business purpose for each expense. As long as they're legitimate business expenses and properly documented, the LLC can deduct them regardless of whether they were initially paid from personal funds.

I just went through this exact scenario with my consulting LLC! The good news is that proper expense reimbursements are totally legitimate and the LLC can still deduct them. Here's what worked for me: 1. Create detailed expense reports for each reimbursement showing the business purpose, date, amount, and vendor 2. Keep all original receipts 3. Have the LLC formally approve and pay the reimbursements (don't just transfer money informally) 4. Record everything properly in your books - the LLC records the expense and the reimbursement as separate transactions The key distinction is that these are reimbursements for legitimate business expenses, not distributions or loans. As long as the expenses would have been deductible if paid directly by the LLC, they remain deductible when reimbursed. One thing to watch out for - make sure you're not double-deducting. The LLC takes the deduction, not you personally. And get those reimbursements processed before year-end if you want the deductions this tax year! Your accountant should be able to confirm all this when they're back, but you're definitely on the right track with your thinking.

If the nonprofit isn't issuing 1099s, they're probably breaking the law themselves. Any business that pays a contractor $600+ in a year is required to file a 1099-NEC. Maybe you should let them know they could get in trouble too? This seems super sketchy for a nonprofit especially.

I'm a tax preparer and I see this situation fairly often. You're absolutely right to report the income regardless of whether you receive a 1099 - that's the law and it's the smart thing to do. Here's what many people don't realize: the IRS has increasingly sophisticated data matching systems. Even without a 1099, they can cross-reference your reported income with things like business expense deductions, lifestyle indicators, and yes, banking activity during audits. They also have agreements with state agencies that might have records of your work. The nonprofit telling you they "have no plans" to file a 1099 is concerning - they're legally required to issue one for payments over $600 to contractors. This could indicate poor record-keeping that might actually make them MORE likely to get audited, not less. My advice: Report the income, keep excellent records of all payments received (bank statements, invoices, contracts), and document any business expenses you can legitimately deduct. If you're audited, having organized records will make the process much smoother. The peace of mind from doing things correctly is worth way more than any short-term tax savings from underreporting.

Just went through something similar and want to make sure you know that amended returns are MUCH slower to process. Mine took almost 16 weeks! The IRS says to allow up to 20 weeks for amended returns vs. the normal 21 days for regular returns. So if you're expecting additional refund money, don't count on seeing it anytime soon.

Don't beat yourself up too much about this - it's actually the tax preparer's responsibility to ensure all your documents are included. Since you mentioned you gave them all your paperwork, this is on Jackson Hewitt, not you. The silver lining is that with $2,200 in federal withholding on that missing W-2, you'll likely owe very little additional tax, if any. In fact, depending on your tax bracket, you might even get a bigger refund once you file the amendment! File Form 1040-X as soon as possible to get ahead of any IRS notices. And definitely contact Jackson Hewitt about covering any fees or penalties since this was their error. Most reputable tax prep companies will make it right when they mess up. Keep all your documentation showing you provided complete paperwork to them.