Just want to add - my son's first 1099-NEC came in at around $900 last year too and I checked with my CPA. If the 1099-NEC is the ONLY income they have, you might qualify to use Form 8814 to report it on your return instead of filing separately. But there are income limits and other restrictions.

Adding to the great advice here - one thing that caught me off guard with my daughter's first 1099-NEC was the quarterly estimated tax payments for the following year. If your son continues working and expects to earn more than $1,000 in net self-employment income next year, he'll need to start making quarterly payments. Also, consider opening a separate savings account for him to set aside about 25-30% of his earnings for taxes. At 16, this is a perfect time to teach him about tax planning and budgeting. My daughter now automatically transfers a portion of every payment she receives into her "tax account" - it's become a great habit that will serve her well as she gets older. The self-employment tax can be a shock for teens who aren't used to seeing money come out of their paychecks, so preparing him for that reality early is helpful!

Sometimes I've found that withholding a bit extra from my W-2 job is easier than dealing with quarterly payments for small self-employment income. You can file a new W-4 with your employer and just add an additional amount to be withheld from each paycheck. Way less paperwork than tracking and submitting quarterlies.

Just wanted to add another perspective for anyone in a similar situation - if your side gig income is truly inconsistent like yours, consider keeping a simple monthly tracking spreadsheet. I learned this the hard way when my freelance writing income jumped unexpectedly one quarter and I suddenly owed way more than expected. What I do now is track my monthly self-employment income and multiply by 15.3% (self-employment tax rate) plus my marginal tax rate to estimate what I should be setting aside. If I hit the point where I'm on track to owe more than $1,000 for the year, I either make a quarterly payment or increase my W-2 withholding like others mentioned. The inconsistency actually works in your favor right now since you're staying under the thresholds, but having a system in place will save you stress if your income grows. Better to be prepared than scrambling to catch up on payments later!

When I started my first "real" job after college, I accidentally marked exempt on my W4 too. It's an easy mistake to make! The way I handled it was to immediately fix my W4 with HR and then have extra withholding taken out for the rest of the year to try to catch up. If you can afford it, you could increase your withholding for the remainder of 2025 to offset some of what you'll owe. On your W4, there's a line that lets you specify additional withholding from each paycheck. This won't solve the whole problem, but it might reduce the amount you need to pay when you file.

Is anyone going to mention that the employer is partially at fault here? I work in HR and we're supposed to verify that people claiming exempt actually qualified for exempt status the previous year. Like if you had a tax liability last year, you technically can't claim exempt this year. There are specific requirements for claiming exempt status.

lol the irs is such a clown show these days. theyre so backed up they probably wont even look at ur return til 2027 🤡

Just went through something similar last year. The IRS did request documentation for my child care credit during correspondence audit. Even without original receipts, I was able to piece together proof using bank statements, credit card records, and a signed statement from my daycare provider confirming the amounts and dates. Also had to provide Form W-10 info for the provider. It was stressful but manageable if you can show a clear payment trail. The key is being proactive about gathering alternative documentation now.

My friend tried deducting his real estate courses last year and got audited! The IRS disallowed the deduction because they said his education was preparing him for a "new trade or business" since he only owned one rental property at the time. Just be careful and document everything!!

The key distinction that tripped up your friend's situation is really important for everyone to understand. The IRS looks at whether you're already operating as a business versus preparing to enter a new business. With just one rental property, it can be harder to establish that you're already running a legitimate rental business operation. In your case with 2 duplexes over 3 years, you have a much stronger position to argue you're already in the rental business and the MBA courses are maintaining/improving existing skills. The fact that you're already paying taxes on rental income and have multiple properties helps establish this as an ongoing business activity. However, I'd still recommend being very conservative and only claiming the portions of courses that directly relate to your current landlord activities. Document how specific course modules connect to tasks you already perform - like tenant screening, property maintenance planning, financial analysis of your existing properties, etc. Avoid claiming anything that looks like it's preparing you for real estate development, commercial property acquisition, or other activities you're not currently doing.