Hey Sydney! I totally understand your confusion - I was in the exact same boat when I first started working after high school. The tax system definitely isn't intuitive, and they don't teach you this stuff in school! Just to clarify the basics: that federal withholding in Box 2 is essentially money your employer sent to the IRS throughout the year as estimated payments toward your tax bill. Whether you get it back depends on whether you overpaid or underpaid your actual tax liability. With your $24k income, you'll owe federal tax on roughly the amount over $13,850 (the 2023 standard deduction), so about $10k of your income will be taxable. If your employer withheld more than what you actually owe on that $10k, you get the difference back as a refund. The Social Security and Medicare taxes (FICA) are completely separate - those are fixed percentages that fund those specific programs and never come back as refunds, regardless of your income. That Social Security benefits question that stumped you is probably just asking whether anyone in your household receives SS benefits or if you might be claimed as a dependent on someone's return - it's routine screening that affects certain credits but isn't as complicated as it sounds. Getting professional help for your first return is honestly the smartest move! They'll sort out any complications and help you understand the process. Don't be afraid to ask lots of questions during your appointment - understanding your first return will make future years so much easier. Good luck this weekend!

Sydney, your questions are so relatable! I was in almost the exact same situation when I filed my first tax return - fresh out of high school, working my first real job, and completely baffled by all those boxes on my W-2. Everyone has given you great explanations about how withholding works, but I wanted to add something that really helped me understand it: think of Box 2 as money you've already "lent" to the government throughout the year. At tax time, you calculate what you actually owe them, and if you lent them more than necessary, they pay you back the difference. At your income level around $24k, there's a really good chance you overpaid and will get a nice refund! The Social Security/Medicare stuff (FICA) that shows up in boxes 4 and 6 is different - that's like paying into a long-term savings account that you can't access until you retire or become disabled. It's not part of your income tax calculation at all. Your decision to get professional help is absolutely the right call! When I tried doing my taxes online that first year, I got so frustrated with all the confusing questions that I almost gave up entirely. Having someone walk you through it in person makes such a difference. One thing I wish I had known: don't be afraid to ask your tax preparer to explain anything that doesn't make sense. They're used to working with first-time filers and won't think your questions are silly. Understanding your first return will make you feel so much more confident about taxes going forward. Good luck with your weekend appointment!

I'm a newcomer here but wanted to share my recent experience since it might help. I went through almost exactly what you're describing - made about $7,200 doing various gig work (food delivery, some freelance design) and was totally confused about the tax implications. Everyone here is absolutely right about the $400 threshold for self-employment tax. I learned this after initially thinking I might not owe anything since my income seemed "small." The 15.3% SE tax definitely adds up - I ended up owing about $1,100, which was a shock since I hadn't set money aside. What really helped me was understanding that this isn't just a "penalty" for being self-employed - it's literally your Social Security and Medicare contributions. When you have a regular job, you pay 7.65% and your employer matches it. When you're self-employed, you pay both halves, hence the 15.3%. A few practical things that made the process easier: - I opened a separate savings account for taxes after the fact (wish I'd done it earlier!) - Used a simple expense tracking app to photograph receipts going forward - Set up quarterly payments for this year based on what I expect to make The learning curve is steep but manageable once you understand the basics. And don't forget about that deduction for half your SE tax - it's not huge but every bit helps when you're dealing with an unexpected tax bill!

Welcome to the community! I just went through this exact situation with my side business last year, and I can definitely help clear up the confusion. You absolutely do need to pay self-employment tax on your $6,400 income. Your friend who told you there's no SE tax under $7,000 was mixing up different tax thresholds. The $400 minimum for self-employment tax is correct and completely separate from regular income tax rules. Here's what you're looking at: - Self-employment tax: 15.3% on your $6,400 = roughly $980 - Federal income tax: $0 (since you're under the $13,850 standard deduction) The 15.3% covers both your Social Security (12.4%) and Medicare (2.9%) contributions. When you're an employee, you only see 7.65% deducted from your paycheck because your employer pays the other half. As self-employed, you pay both portions. The good news is you can deduct half of your SE tax (about $490) as an above-the-line deduction, which reduces your adjusted gross income even while taking the standard deduction. For next year, definitely start setting aside 20-25% of each payment for taxes. I learned this the hard way! Also, since you'll likely owe over $1,000 again, you should set up quarterly estimated payments to avoid underpayment penalties. Don't forget to track small expenses - even things like work gloves, cleaning supplies, or business use of your phone can add up to meaningful deductions that reduce your net SE income. Good luck with your filing!

I've been following this thread and wanted to share something that might help everyone dealing with this situation. I work as a tax preparer and see this split coverage scenario frequently, especially with blended families or when parents have employer coverage but put kids on Marketplace plans. The most common error I see is people trying to prorate their household income between the different policies - DON'T do this! Your household income and Federal Poverty Line percentage stays the same across all policies. You're only allocating the premium amounts, SLCSP, and advance premium tax credits in Part IV. Also, a critical point that hasn't been mentioned yet: if you received advance premium tax credits for both policies during the year, you absolutely must reconcile BOTH on Form 8962. I've seen taxpayers think they only need to report one policy and then get hit with Notice CP75C from the IRS demanding repayment of the unreported advance credits. One more tip - if your situation is really complex (multiple job changes, coverage gaps, etc.), consider filing for an automatic 6-month extension. Form 8962 mistakes can be expensive to fix, and it's better to get it right the first time than deal with amended returns and potential penalties later.

I've been through this exact situation and want to emphasize something that really helped me understand the process: think of Form 8962 as having two distinct phases. Phase 1 (Part IV) is where you handle the split coverage by allocating each policy's amounts separately. Phase 2 (Part III) is where you bring everything together for the final reconciliation using those allocated amounts. The key insight that clicked for me was realizing that even though you have multiple policies, you're still filing as ONE tax household with ONE income level. The allocation in Part IV is just accounting for the fact that your premium tax credits were split across different insurance policies during the year. A practical tip: when you're working through Part IV, lay out all your 1095-A forms side by side and work through them month by month. Don't try to do annual totals first - the monthly approach helps you catch coverage gaps or overlaps that could affect your calculations. Also, keep in mind that if either policy had coverage changes during the year (like adding/dropping dependents), you'll need to account for those changes in the specific months they occurred. This is where many people get tripped up, so take your time with the month-by-month details. The good news is that once you get Part IV completed correctly, Part III follows the same process as any other Form 8962 - just using your allocated amounts instead of the raw 1095-A figures.

I can't stress enough how important it is to start making estimated quarterly payments going forward, even if you've missed them this year. Based on your $42K income, you'll want to calculate roughly 25-30% of your net profit and divide that by four for your quarterly payments next year. One thing I haven't seen mentioned yet is that you may want to consider opening a separate business checking account if you haven't already. This makes tracking business expenses SO much easier come tax time, and it shows the IRS you're treating this as a legitimate business rather than hobby income. Also, for 2025, consider setting aside money from each payment you receive - I usually recommend 25-30% into a separate "tax savings" account. This way you won't be caught off guard next year. The quarterly due dates are January 15th, April 15th, June 15th, and September 15th, so mark your calendar now! Don't beat yourself up about not knowing this stuff - the transition from W-2 to 1099 work is a learning curve that catches everyone off guard. The fact that you're asking these questions now means you're already ahead of where I was my first year!

Your situation is definitely stressful, but you're not completely screwed! Many first-time 1099 contractors go through exactly what you're experiencing. Here's the reality: whether you get a refund depends on several factors beyond just having 1099 income. The main things working in your favor: those $3,800 in business expenses will reduce your taxable income, and you might qualify for tax credits like the Earned Income Tax Credit depending on your total income and filing status. Don't limit yourself to just the laptop and internet - think about any other work-related expenses like software subscriptions, office supplies, mileage for work trips, or even a portion of your phone bill. Yes, you'll likely owe some money since no taxes were withheld and you missed quarterly payments, but the underpayment penalties aren't as catastrophic as they might seem. The IRS calculates them as interest on what you should have paid throughout the year. My advice: start gathering ALL possible business expense receipts now, and seriously consider using tax software specifically designed for self-employment or consulting with a tax professional who understands 1099 situations. For your first year, the peace of mind and potential tax savings from professional guidance often far outweigh the cost. Also, start setting aside 25-30% of your future 1099 payments for taxes - this will save you from this stress next year!

Just want to add that the threshold for receiving a 1099 from these platforms has changed. Underdog and PrizePicks now issue a Form 1099-MISC if you win $600 or more in a calendar year. But even if you don't receive a form, you're still legally obligated to report ALL winnings. Also, watch out for the sessions reporting requirement. Each time you log in and play could potentially be considered a separate session. So don't just report the net amount for the year - you technically need to report each winning session separately.

One thing I haven't seen mentioned yet is the importance of keeping your account statements from these platforms for at least 3 years after filing. The IRS can audit gambling income up to 3 years after you file, and they're particularly scrutinizing fantasy sports platforms now. I'd also recommend setting aside about 25-30% of your winnings throughout the year for taxes, especially if you're not having taxes withheld from other income. Getting hit with a big tax bill plus penalties for underpayment can be brutal. Another tip: if you're consistently profitable, consider making quarterly estimated tax payments. The IRS expects you to pay as you earn, not just at the end of the year. Missing this can result in underpayment penalties even if you pay your full tax liability by April 15th.