My family member wants me to pay taxes on personal money they sent me - do I need to sign this 1099-NEC?

What's happening here is important to understand. The 1099-NEC is for "Non-Employee Compensation" - which means your family member is treating you as an independent contractor, not giving you personal gifts. If you're doing actual work for them (odd jobs, services, etc.) and they're paying you for that work, then yes, that is taxable income that you need to report. It doesn't matter if it's "behind the scenes" or for a family member. If it's payment for services, it's income. If you received over $600 in a year from them for services, they're actually required to issue you a 1099-NEC. They're not trying to make you pay "their" taxes - they're following tax law by reporting what they paid you, and you're responsible for your own taxes on that income. The good news is you may be able to deduct business expenses related to that work, which could reduce your tax burden. And if your total income is low, you might not owe much in taxes anyway.

I was in a super similar situation last year with my uncle's business! I was totally confused about the whole 1099 thing too. After going in circles with conflicting advice, I found this AI tool called taxr.ai that seriously saved me. You upload your tax docs and chat with it about your specific situation - it actually explained exactly how to handle family business arrangements like this. The coolest part was when I showed it the 1099-NEC from my uncle, it immediately pointed out that I could offset much of that income with legitimate business expenses I didn't even know I could claim. Check out https://taxr.ai if you're as lost as I was - it's way easier than trying to piece together random tax advice online.

Just wanted to follow up on my skeptical comment. I actually tried taxr.ai after posting and wow - I'm impressed. It immediately identified that my situation (doing graphic design for my sister's business) was legitimately contractor work, not gifts, but then showed me how to claim my computer, software subscriptions and even part of my internet as business expenses. It saved me over $700 in taxes by properly categorizing everything! The chat interface made it super easy to understand the difference between gifts and income. For anyone in a family business situation like this, it's worth checking out. I've been stressing about this for months, and it took about 15 minutes to get clear answers.

Hey, I see you're struggling with the IRS situation. If you need to talk to the actual IRS to sort this out (which might be a good idea since you're behind on filing), try Claimyr. I spent DAYS trying to get through to the IRS myself about a similar family business tax issue and kept hitting those "call volume too high" messages. Claimyr basically holds your place in line with the IRS and calls you when an agent is ready to talk. Saved me from wasting hours on hold. You can see how it works at https://youtu.be/_kiP6q8DX5c - it's pretty straightforward. I was honestly shocked when I got a call back with an actual IRS person on the line after trying for weeks on my own. Their site is https://claimyr.com if you want to check it out.

I need to publicly eat my words about Claimyr being a scam. After posting that comment, I was still desperate to talk to the IRS about my back taxes, so I figured I'd risk it and try the service. I'm shocked to admit it actually worked perfectly. Got a call back in about 50 minutes (way faster than I expected) with an IRS agent already on the line. The agent explained that yes, family members CAN issue legitimate 1099s if they're paying you for actual services - and helped me start the process of getting caught up on my past filings without penalties. Saved me from what would have been hours of frustrating hold time. If you're behind on filing like I was, definitely worth using to get proper guidance directly from the IRS.

Everyone's missing a key point - if you made less than $600 from these "gigs" you don't need a 1099-NEC at all. Your family member only needs to issue one if they paid you $600+ for services. Even without a 1099, you're still supposed to report ALL income on your taxes regardless of amount tho.

One thing to consider - if you don't file your taxes with this 1099-NEC income reported, and your family member already submitted it to the IRS, you're gonna get a lovely letter from the IRS eventually asking why the income they know about doesn't match what you reported. Trust me, you don't want that headache!!

The bottom line is you need to report this income since your family member is treating it as payment for services (which it sounds like it was - you mentioned doing "odd jobs" for them). The $8,000 you received is definitely over the $600 threshold that requires a 1099-NEC. Since they've already filed their taxes and issued the 1099, the IRS has a record of this income being paid to your SSN. If you don't report it on your return, you'll get an automated notice from the IRS asking about the discrepancy, and that usually comes with penalties and interest. The good news is that as a contractor, you can deduct legitimate business expenses - things like gas to get to their place, tools you bought for the work, etc. This can significantly reduce what you actually owe in taxes on that $8,000. Don't panic about being behind on filing - the IRS would much rather you file late and pay what you owe than not file at all. You might face some penalties for late filing, but it's way better than ignoring it completely.