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In most cases, you would not need to file a tax return if your total income (not including SSI) is less than $400.   You would first want to analyze if it actually is a business.  If you are expecting your income to be that low, it leads to the thought that it MIGHT be a hobby (you can Google something like "IRS business vs hobby").  If it is a business, then if your business PROFIT (after expenses) is $433 (give or take $1, depending on rounding) or more, you will likely need to file a tax return to pay self employment tax.    If you need to file a tax return, you'll need to also analyze if your parents are eligible to claim you as a dependent, and if they are, make sure that is mentioned on your tax return.

Thank you very much for your reply.  He is 24 and was in school for 5 months this year.  He will be doing internships and then returning to school next May.  He will not earn more than $3000 and will be staying in Florida for the remainder of 2025.  From what I read if I provide support, in school at least 5 months, and he earns less than $5200 in 2025 I can claim him as a qualifying relative.  If I do not claim him I do not know if he is eligible to be a Florida resident, seems like they have strict requirements.  Do you think I am able to not claim him and he does not pay NJ taxes?  If so I would have to see which way works out better financially.  His job has been using his Florida address and withholding taxes accordingly so if I file in NJ for him he will have to pay UI/DI/FLI as well.  Thank  you very much again for your advice.

You are generally correct that this kind of adjustment is considered a non-taxable discount or price adjustment.  The only time it would be taxable is if you get more back than you paid.  For example, if you paid $300, get a refund and keep the product, that is not taxable because the company is allowed to give you the product for free and that does not become taxable income to you.  However, if you ended up with a free product, your $300 back, and another $100 gift card, the $100 gift card is technically taxable income (you got back more than you paid). 

@Divideby7 wrote: Thank you for the detailed explanation, this is very helpful and insight. I need to check the fees associated if i keep it as is, but i was targeting to do a full conversion and paying the taxes. I wanted to follow up and ask if i should pay the estimated taxes when i do the conversion say around Oct month or should i pay the taxes when i doing taxes next year. I ask since i am expecting some tax credits due to solar program. Also isnt the 12k in taxes an estimate and the actual taxes will be based on my gross income levels for the year?   In general, you are correct that your tax is calculated on your tax return.  However, the IRS wants you paying into the system over the whole year (by some combination of withholding from your job and making estimated payments), so if you owe money at the end of the year, you can be assessed an underpayment penalty going all the way back to the beginning of the year, even if you pay in full with your tax return.     OK, here's the problem.  The IRS assumes your income is earned evenly over the whole year, even if it is not, and they want to see payments applied evenly over the whole year.  That means that if you do a Roth conversion in October, for which $12,000 is due, they want to see a $3000 estimated tax payment made before April 15, June 15, September 15, and January 15, 2026.  You haven't made those payments, so you can be assessed a penalty even if you pay the full $12,000 when you make the conversion.     There are 4 ways to avoid the penalty for underpayment. 1. Make the estimated payment in full when you perform the conversion.  Then, on your tax return, go to the special situations page and choose to calculate a penalty, even if the program does not think you owe one.  Use the Annualized Income method, this is a calculation to show the IRS that your income was not evenly earned over the whole year, but your payments were appropriate to the amount of income in each quester.    2. Owe no income tax when you file because your solar credit is larger than the tax bill from the conversion.  If you are expecting a $12,000 (or more) solar credit, so that you don't show tax on your tax return, you should not be penalized for not making an estimated payment.   3. Have $12,000 withheld from your conversion. The IRS assumes that withholding is also spread out evenly over the year even if it is not, so you won't look under-paid.  To complete the conversion, send the $12,000 that you set aside for taxes to the Roth IRA instead of the IRS as a tax payment.  Tell the Roth IRA this is a rollover.  They don't need to know or care that it is part of the other rollover, that gets worked out on your tax return.  (If you have $55K, you convert $43K because you have $12K withheld for taxes, but then you deposit $12K as a separate rollover, then it all works out.)   4. Do the conversion in January 2026.  The tax payments will be due in 4 quarterly estimated payments, $3000 each in April, June, September and January 2026.  Here, the "IRS assumes income is spread out" rule works in your favor.  If you owe $12,000 tax on a conversion in January, the IRS will be quite happy to see the payments spread out, and you can invest the money in the mean time to earn a little extra interest.   Now, if you are expecting a solar credit to offset the tax on the conversion, you will want to do #1 or #2, #3 and 4 don't make sense in that situation.  If your solar credit will be less than the $12,000, then you should make a partial estimated payments when you do the conversion and then let the credit cancel out the rest of the tax. 

Thank you for the detailed explanation, this is very helpful and insight. I need to check the fees associated if i keep it as is, but i was targeting to do a full conversion and paying the taxes. I wanted to follow up and ask if i should pay the estimated taxes when i do the conversion say around Oct month or should i pay the taxes when i doing taxes next year. I ask since i am expecting some tax credits due to solar program. Also isnt the 12k in taxes an estimate and the actual taxes will be based on my gross income levels for the year?

Thanks, RJS!  I confirmed with the financial institution that the UTMA accounts of my 2 dependents are under their SSN's.  Nonetheless, the 1099's came through in the TurboTax import because the UTMA accounts are linked to my account.  I will delete them.  I hadn't realized, but now understand, that I can claim the 2 dependents even with them filing separately.  I will look more closely into the options for next year.  

net them but turbotax does not handle excess business loss. you may need to file form 461 - see below https://www.irs.gov/pub/irs-pdf/i461.pdf instructions  https://www.irs.gov/pub/irs-pdf/f461.pdf form      Who Must File File Form 461 if you’re a noncorporate taxpayer (including a trust subject to tax under section 511) and either (i) your net losses from all of your trades or businesses are more than $305,000 ($610,000 for taxpayers filing a joint return), or (ii) you would report a loss of more than $152,500 on any one of Form 461, lines 1 through 8.

Did you ever get this resolved? I have the same situation. Switched from MFS to MFJ for 2021 and they took the amount from line 11 and said it was additional tax assessed even though that is what my wife had already paid. I was supposed to get $4222 refunded and now they say I owe them $1483. It is ridiculous. I cant even get any of these clowns from the IRS on the phone. I am stuck at this point. To top it off, they NEVER notified me of any errors on my amendment. I filed it in February 2024 and didn't receive a thing until June 2025. 

I have a Schedule K-1 (Form 1065) with a code AJ in box 20. I also have the 2 pieces of information (Aggregate Business Activity Gross Income, and Aggregate Business Activity Total Deductions) associated with the code AJ. However where in Turbo Tax can I enter these numbers? The software does not ask for these numbers even though I selected AJ from the dropdown box for box 20. Any help will be appreciated. Thank you!

You have already paid (or will pay) taxes on your original 300 so any refund, rebate, or credit you receive is only a return of your own money you've already paid taxes on  and is not taxable. It doesn't matter how you receive it - cash, check, credit card or Amazon gift card, etc.  

And....you mention a "letter" but have provided no information about that letter or what the letter said.  TurboTax gets no information from the IRS after you file your tax return, so no one at TurboTax knows about a letter you received.  Provide some details--but please no personal information like SSN, etc.

IDENTITY PIN     If you have a 6 digit PIN issued to you by the IRS you need to enter it in order to e-file.  Go to Federal>Other Tax Situations>Other Return Info>Identity Protection PIN and enter the six-digit PIN.       https://www.irs.gov/identity-theft-fraud-scams/retrieve-your-ip-pin

It is too late to request an extension for a 2024 tax return.  That had to be done by April 15, 2025.   If you mean that you began to prepare a 2024 return and now you cannot find it, you can use the account recovery tool to find your return.     Many people have multiple TT accounts and forget how to access them.  Log out of the account you are in now.     https://ttlc.intuit.com/turbotax-support/en-us/help-article/account-management/many-intuit-accounts-turbotax/L9aVfKS1Z_US_en_US?uid=ll5g6zcx Account Recovery