Has anyone ever been audited on this specific issue? I'm in the same boat (S Corp with about $275k in assets) and I've been scared to take distributions beyond my salary because I'm worried about triggering an audit.

This is exactly the situation I was in last year! One thing that really helped me was understanding the difference between your stock basis and your AAA (Accumulated Adjustments Account). Even though you've paid taxes on the S Corp profits over the years, if you've taken distributions along the way, those reduce your basis. Here's what I learned: your basis starts with your initial investment ($4k in your case), then increases with your share of S Corp income each year, and decreases with distributions you've already taken. So if your S Corp made $400k in profits but you took $396k in distributions over the years, your basis would still be around $4k. The key is getting an accurate calculation of your current basis before taking any large distribution. If you take distributions above your basis, the excess gets treated as capital gains (typically 15-20% tax rate depending on your income). Not the end of the world, but you want to plan for it. I'd definitely recommend working with a CPA who specializes in S Corps to run the numbers before you make any moves. They can help you optimize the timing and amount to minimize the tax hit.

This thread has been absolutely fantastic! As someone who just hired a house cleaning service for the first time, I was completely stressed about potential tax obligations. Reading through everyone's experiences and the consistent professional advice has been so reassuring. What really helped me understand this was seeing how the "personal vs. business" distinction is the key factor, not the dollar amount or whether someone is an independent contractor. Since I'm paying for cleaning services for my personal residence (not a business property), no 1099 is required regardless of how much I pay annually. The IRS language about payments made "in the course of your trade or business" that keeps being referenced throughout this discussion makes it crystal clear. Personal household services simply don't fall into that category, which is why the $600 threshold that applies to business contractor payments isn't relevant here. I'm also going to follow the advice about keeping simple payment records (dates, amounts, payment method) even though it's not required for tax compliance. It seems like good practice for budgeting and could provide helpful documentation if any questions ever arise later. Thanks to everyone who shared their knowledge and experiences - this discussion should definitely be saved as a reference for anyone dealing with household service tax questions!

This has been such a comprehensive and helpful discussion! As someone who was initially confused about this exact same issue, I really appreciate how everyone broke down the key distinction between personal and business expenses. What I found most valuable was learning that the IRS language specifically mentions payments made "in the course of your trade or business" - and since household services for your personal residence clearly don't fall into that category, no 1099 is required regardless of the amount. It's reassuring to see this principle apply consistently across so many different scenarios shared here. I'm definitely going to start keeping simple payment records for my household services too, not for tax compliance but for budgeting and peace of mind. It seems like such a small effort for potentially big benefits down the road. Thanks to everyone who shared their expertise and real-world experiences - this thread should be a go-to resource for anyone dealing with household service tax questions!

I tried TurboTax's import feature last year and it was kinda hit or miss. Got my main W2 from my full-time job but completely failed to import anything from my side gig. My bank's 1099-INT imported fine but Robinhood's forms didn't. Just don't go in expecting it to import everything automatically. You'll probably still need to enter some stuff manually. And ALWAYS double-check the imported values against your paper forms. I caught a few errors last year where the imported numbers didn't match my actual documents.

Great question! As someone who just went through this process myself, I can confirm that TurboTax's import feature is pretty solid but definitely not perfect. Since you mentioned ADP specifically - you're in luck! ADP is one of the major payroll providers that works well with TurboTax's direct import. You'll need your ADP login credentials, and the W2 should import automatically once it's available (usually by late January). For Fidelity, they're also well-supported for importing 1099s. Your investment income forms should come through without issues. The student loan interest (1098-E) import depends on your loan servicer - the big ones like Navient, Nelnet, and Great Lakes typically work fine. One tip: even when everything imports correctly, definitely review all the numbers against your paper/PDF copies. I caught a small error in my imported 1099-DIV last year that would have cost me a few hundred dollars in incorrect taxes. Also, if some forms don't import, don't panic! The manual entry in TurboTax is pretty straightforward and walks you through each field. Good luck with your first solo tax filing!

Also worth noting - if you do find out you have debts that will be offset, you can sometimes set up payment plans to avoid losing your entire refund. I had success calling the agency that held my debt directly and working out a deal before filing. They were actually pretty reasonable about it.

Pro tip from someone who got burned twice: also check if you owe anything to your state's Department of Labor for unemployment overpayments. Those can sneak up on you and they don't always show up in the federal system right away. Found out the hard way when they grabbed my state refund first, then my federal one got hit too for a different debt. Now I check everything before filing - federal, state, and local if your city does income tax.

This is really helpful information everyone! I've been using Payoneer for my freelance work too and had no idea about the $600 threshold change. One thing I'm still unclear on - when the 1099-K gets issued, does it show the gross payment amounts or the net amounts after Payoneer's fees? For example, if a client sends me $1000 but Payoneer takes a $30 fee, does the 1099-K show $1000 or $970? This could make a difference in how I track my actual income versus what gets reported to the IRS. Also, does anyone know if there's a way to see a preview of what will be on your 1099-K before it gets issued? I'd love to reconcile my records ahead of time rather than being surprised when tax season comes around.

Thanks for all the detailed information everyone! As someone who's been using Payoneer for international freelance work, this thread has been incredibly helpful in understanding the new reporting requirements. One thing I want to emphasize for anyone just reading this - even though the 1099-K reporting might seem scary at first, it's actually not changing your fundamental tax obligations. If you've been properly reporting your worldwide income (like the original poster mentioned they were doing), you're already on the right track. The key is just making sure your records are detailed enough to explain any discrepancies between what Payoneer reports and your actual taxable income. Keep documentation for things like personal transfers, expense reimbursements, and any non-income transactions that might inflate the 1099-K amount. I'd also recommend reaching out to Payoneer directly (or using one of the services mentioned here if you can't get through) to understand exactly what they're including in your 1099-K before tax season hits. Better to sort out any confusion now than to scramble in April!