Unemployed for 5 years, does my husband need to pay taxes for 2025?

Thank you for your response! I had no idea about the $400 threshold for self-employment tax. Does this mean we'd need to file amended returns for previous years? I'm worried about potential penalties if we've been doing it wrong.

Technically speaking, you should file amended returns (Form 1040-X) for any year where your husband earned more than $400 from self-employment. The IRS generally allows you to amend returns from the past three years. Regarding penalties, they're typically based on the amount of tax owed. The good news is that if you voluntarily file amended returns before being contacted by the IRS, you may qualify for reduced penalties. Interest on unpaid taxes, however, generally can't be waived and accrues from the original due date of the return.

Did it help with figuring out if you needed to amend previous returns too? I'm in a somewhat similar position but worried about opening a can of worms with the IRS by suddenly reporting income that wasn't reported before.

How does this AI thing know tax law better than a real accountant? Seems sketchy to trust a computer program with something as serious as tax advice where mistakes could lead to audits.

It absolutely helped with the amendment question. The system reviewed my specific situation and provided guidance on which years needed amending based on the statute of limitations and the amount of potential liability. It even generated a risk assessment that helped me decide which returns were worth amending. The AI is actually backed by tax professionals who validate the guidance it provides. It's not replacing accountants - it's more like having immediate access to organized, personalized tax information. The recommendations are based on actual tax code and regulations, and they provide references to the specific IRS publications that apply to your situation. I found it more thorough than my previous accountant who missed some deductions my husband qualified for as a self-employed person.

Wait, how exactly does this service work? Does it somehow jump the line or just sit on hold so you don't have to? I've been trying to reach someone about my tax situation for weeks.

Yeah right. There's no way this actually works. The IRS phone system is completely broken - I refuse to believe some random service can magically get you through when millions of people can't even get past the busy signal. Sounds like a scam to me.

It doesn't jump the line - it essentially waits in the queue for you. Their system calls the IRS and navigates through all those annoying menu options, then holds your place in line. When they detect that an agent is about to pick up, they call your phone and connect you directly to the IRS agent. Basically saves you from having to sit by your phone on hold for hours. It's definitely real - the IRS doesn't know or care that there's a service holding your place in line. From their perspective, it's just a normal call that waited its turn. I was skeptical too, but after wasting an entire day on hold myself, I figured it was worth a shot. The relief of actually speaking to someone who could help with my situation was worth it.

That's really good advice! What kind of documentation would be acceptable for cash jobs? Most of his work is for neighbors who just pay cash, no invoices or anything formal.

For cash jobs, create your own simple invoice system - even a notebook where you write down the date, customer name, service provided, and amount paid is better than nothing. Some people use apps like Square or PayPal for small jobs which automatically creates a record. The key thing the IRS wants to see is consistency and reasonableness. If you can show a regular pattern of work and income that matches the lifestyle you report on your taxes, that goes a long way. For expenses, keep ALL receipts for anything related to the work. Home improvement stores, gas, work clothes, tool repairs - these can all potentially be deductible depending on how they're used. Just make a note on each receipt what job it was for.

Self-employment tax is currently 15.3% of net earnings (12.4% Social Security + 2.9% Medicare). On $4,000 of net income, that would be about $612 in self-employment tax. However, you can deduct half of that on your 1040, which slightly reduces your income tax. But remember, you'll likely have deductible expenses that reduce your net income. If your husband spent money on tools, supplies, transportation to jobs, etc., those costs can lower the taxable amount significantly. Sometimes with proper expense tracking, the taxable income might be much lower than the gross income.

Thanks! That's helpful to know. I didn't realize I could deduct expenses against that income. I was worried about owing a big chunk of that $4k, but if I can deduct the gas, tool repairs, and other expenses, it might not be so bad.