Does anyone know if staking rewards need to be reported even without a 1099? I have both trading losses and staking income and not sure how to handle that on FreeTaxUSA.

I went through this exact same situation last year with FreeTaxUSA and crypto losses without 1099-Bs. A few things that helped me get through it: 1. You definitely need to report everything - losses are actually good for you tax-wise since you can deduct up to $3,000 against ordinary income and carry forward any excess. 2. For the manual entry pain, I found it easier to group transactions by coin type and date ranges. FreeTaxUSA allows summary entries as long as you keep detailed records. 3. Double-check your cost basis calculations - I initially missed some fees that should have been included, which would have increased my deductible losses. The whole process took me about 3 hours but was worth it for the tax benefit. Make sure to save all your CSV files and transaction records in case the IRS has questions later. Good luck finishing your return!

honest question- has anyone here ever actually been audited over crypto? i have like 150+ trades and im not doing all that work just to report a $12 loss lol

I get the frustration, but definitely report those losses! Even though it's only $4.50, here's why it's worth it: 1) Those losses can offset future crypto gains - if you make money on crypto next year, you can use this year's losses to reduce your tax bill 2) Unreported crypto transactions are one of the IRS's focus areas right now, and they're getting better at tracking this stuff 3) The penalty for not reporting can be way more than the hassle is worth For 30-50 trades, honestly just bite the bullet and use one of the crypto tax tools mentioned here. I had a similar situation last year and it took maybe 20 minutes total with the software vs the days I was dreading doing it manually. The peace of mind is worth way more than the small cost of the software. Plus, establishing good record-keeping habits now will save you massive headaches if you get more into crypto in the future. Trust me on this one!

Has anyone used TurboTax to report forex losses? I tried entering mine but the software keeps asking me for a 1099-B which I don't have for my forex trades.

For your $135 forex loss, you'll most likely report it on Schedule D and Form 8949 since you only made a few trades as a casual investor. You'll need to list each trade with the date acquired, date sold, proceeds, and cost basis. If your broker doesn't provide a 1099-B (which is common for forex), you'll need to track this yourself. The good news is that your loss can offset other capital gains, and if you don't have any gains, you can deduct up to $3,000 against ordinary income. Any excess carries forward to future years. Make sure to keep detailed records of all your trades including currency pairs, amounts, exchange rates, and dates. The IRS expects you to report all trading activity even without official broker forms.

Great thread! I've been doing similar work and wanted to add one more consideration that helped me a lot - quarterly estimated tax payments. Since you're making around $9k profit and this is contractor income, you'll likely owe self-employment tax on top of regular income tax. The IRS expects you to pay taxes throughout the year, not just when you file. If you plan to continue this work next year, consider setting aside about 25-30% of your actual profit ($9k) for taxes and making quarterly payments. This prevents you from getting hit with underpayment penalties and makes tax time much less stressful. I use the IRS Form 1040ES to calculate my quarterly payments. Since this is your first year, you won't owe penalties for this year, but definitely something to plan for going forward if you continue the business.

This has been such a helpful discussion! I'm dealing with a similar situation as a freelance graphic designer who also handles print production - I get 1099s that include both my design fees and the printing costs I pass through to clients. Reading through everyone's experiences has really clarified the process for me. One thing I wanted to add that I learned from my CPA is the importance of keeping your business and personal expenses completely separate, especially when you're dealing with large material costs like this. I opened a dedicated business checking account and business credit card specifically for all my freelance work. This makes it much easier to track legitimate business expenses and creates a clear paper trail if you ever need to substantiate your deductions. Also, if you're buying expensive components regularly, consider whether any of them qualify for Section 179 depreciation or bonus depreciation if they're equipment you'll use across multiple projects (like specialized tools or testing equipment). Sometimes it's more advantageous tax-wise than expensing everything immediately. The advice about reseller permits and quarterly payments is spot-on too. It's amazing how much money you can save and how much stress you can avoid by getting these systems in place early!

I've been dealing with this exact same issue and wanted to share what I learned after consulting with a tax professional. The key insight is that Schedule AI is designed to prevent overpayment of estimated taxes when your income is uneven throughout the year. When you annualize qualified dividends and capital gains using the same factors (4x for Q1, 2.4x for Q2, 1.5x for Q3, 1x for Q4), you're maintaining the correct proportion between ordinary income and preferentially-taxed income. This is crucial because qualified dividends and long-term capital gains are taxed at lower rates (0%, 15%, or 20% depending on your income level). If you don't annualize these amounts properly, you could end up with the wrong tax calculation. For example, if you received most of your dividends in Q4 but don't annualize them in earlier quarters, your Q1-Q3 calculations would show a higher proportion of ordinary income, leading to higher estimated tax requirements. One practical tip: if you're missing quarterly dividend data, most brokerages have this information in your account history online, even if they only mail annual statements. You can also call them directly - they should be able to provide dividend payment dates for tax purposes.

This is exactly the guidance I needed! I'm dealing with a complex situation where I had significant capital gains in Q2 and Q3, plus quarterly dividend payments that vary quite a bit in amount. One thing I'm still unclear on - when using the Qualified Dividends and Capital Gain Tax worksheet for each period on Schedule AI, do I need to recalculate the tax bracket thresholds as well? For example, if I'm annualizing my income by 4x for Q1, do the 0%/15%/20% capital gains tax brackets also get adjusted, or do I use the standard annual thresholds? Also, for anyone else struggling with this, I found that keeping a simple spreadsheet tracking dividend payment dates throughout the year makes the Schedule AI calculations much easier. Most dividend-paying stocks have predictable quarterly payment schedules, so you can even plan ahead for next year's estimated payments. The IRS really should provide clearer examples of how to handle this situation in the instructions. It's such a common scenario for anyone with investment income but the guidance is pretty sparse.