Does anyone know if there's a way to see how close you are to the $600 threshold on PayPal? I've been selling some stuff from around the house and I'm not sure if I'm tracking it correctly.

This is really helpful information everyone! I'm in a similar situation with my small online business. One thing I'd add is that it's worth keeping detailed records of all your transactions throughout the year, not just when tax season comes around. I use a simple spreadsheet to track each PayPal payment as it comes in, noting whether it's for goods/services or personal, the amount, and what it was for. This makes it so much easier to calculate your totals and prepare for taxes, whether you hit the $600 threshold or not. Also, don't forget that if you do cross the threshold and receive a 1099-K, you can still deduct legitimate business expenses against that income - things like materials, shipping costs, PayPal fees, etc. So even if you get the form, your actual taxable income might be much lower than the gross amount reported.

That's definitely your refund! You're reading it exactly right - that -$12,430 is money the IRS owes YOU. Those negative numbers threw me off when I first started looking at transcripts too, but they clearly state at the top that minus signs are credits. Your breakdown is perfect: $2,277 in withholdings + $4,799 in other credits + $5,354 EIC = $12,430 total refund. With your processing date of 2/24 and no penalties or interest, everything looks clean and should deposit within 21 days. That Earned Income Credit really boosted your refund - Head of Household with 5 exemptions worked out great for you! The "Where's My Refund" tool should update soon with your deposit date. Congrats on the nice refund! 💰

Your transcript is showing exactly what you want to see! That -$12,430 is absolutely your refund - the IRS clearly states that minus signs represent credits, so this is money coming back to you. Your breakdown is spot-on: the three credit amounts ($2,277 withholding + $4,799 credits + $5,354 EIC) total your refund perfectly. With a processing date of Feb 24th and zero penalties/interest, your return went through cleanly. That Earned Income Credit really made a difference with your Head of Household status and 5 exemptions! Since everything processed smoothly, expect your deposit within 21 days (around mid-March). The "Where's My Refund" tool should update soon with your specific deposit date. Congratulations on the solid refund - that's a nice chunk of change heading your way! 🎉

Has anyone dealt with state tax treatment of these charitable annuity distributions? My federal return was fine but my state (CA) didn't seem to recognize the charitable aspect and taxed the full distribution.

This is a really complex area that trips up a lot of people! I went through something similar last year with my non-qualified annuity. One thing I learned that might help - make sure you understand which portion of your distribution is taxable gain versus return of your basis (the money you originally put in). For non-qualified annuities, only the earnings portion is taxable, not your original contributions. So when you're calculating how much to exclude from taxable income due to the charitable contribution, you need to work with the taxable portion only. Your annuity company should provide documentation showing this breakdown. Also, definitely keep detailed records of the direct payment arrangement with your annuity company. I had to provide a letter from them confirming they made the payment directly to the charity per my instructions. The IRS wants to see that clear paper trail showing you never had constructive receipt of the funds.

You're absolutely correct in your understanding! With only $78 in unearned income, your daughter has no filing requirement since it's well below the $1,250 threshold for dependents with unearned income. And you're right that you don't need to report this anywhere on your MFJ return. Form 8814 is only used when you *choose* to report your child's unearned income on your return instead of filing separately for them - but this is only an option when the child actually has a filing requirement in the first place. Since your daughter doesn't need to file, Form 8814 isn't relevant to your situation. The IRS will receive the 1099 under your daughter's SSN and will see that the income is below the filing threshold, so everything is handled automatically on their end. No action needed from you at all - you can breathe easy knowing you're handling this correctly!

Great question and you've got the right understanding! With just $78 in unearned income, your daughter is well below the $1,250 filing threshold for dependents, so no return is required for her. And since there's no filing requirement, there's nothing you need to report on your MFJ return either. One thing to keep in mind for future years - as that UTMA account grows and generates more income, you'll want to track when you might hit those thresholds. The $1,250-$2,300 range requires filing but no kiddie tax, and above $2,300 is when the kiddie tax rules kick in. But for now with $78, you're in the clear! It's also worth noting that even though you don't need to report anything, the IRS will still receive the 1099 information under your daughter's SSN. They'll see it's below the threshold and no further action is expected. So you can file your return with confidence knowing you're handling this correctly.

Has anyone used TurboTax for filing taxes as a consultant? I've always used it for my W-2 job but not sure if it's good enough for consulting income or if I need something more powerful?

Great discussion everyone! As someone who went through this exact decision process last year, I'd add that timing really matters. I started as a sole proprietor and waited until my quarterly estimated taxes hit around $5,000 before forming an LLC. One thing that helped me was tracking my actual business expenses for a few months first - things like software subscriptions, home office costs, professional development, etc. Once I saw how much I was spending on legitimate business expenses, it became clearer whether the LLC structure would be worth it. Also, don't forget about state-specific benefits. Some states offer better liability protection or tax advantages for LLCs that might tip the scales even if the federal tax treatment is similar. Worth checking with your state's business filing office or a local tax professional who knows your state's rules. The key is not to rush into it just because it "sounds more professional" - make the decision based on your actual financial situation and growth projections.