Don't feel embarrassed about not knowing this stuff - the tax system is deliberately confusing and nobody teaches it in school! I wish someone had explained this to me when I was starting out. One thing I'd add to all the great advice here is that you should definitely prioritize filing your 2022 return ASAP since you only have until April 2025 to claim any refund from that year. After that deadline passes, you lose that money forever. Also, keep in mind that even if you think you didn't make "enough" to file taxes, you should still file if you had any taxes withheld from your paychecks. I know people who skipped filing because they thought their income was too low, but they were leaving hundreds of dollars on the table in refunds. Start with the most recent year (2024) to get familiar with the process, then work backwards. You've got this!

Omar, you're definitely not in trouble for not filing! The IRS actually doesn't penalize you for filing late if you're owed a refund - they just hold onto your money until you claim it. Here's what I'd recommend as your action plan: 1. Start by gathering all your W-2s from the past few years (check old mail, contact previous employers if needed) 2. File your 2024 return first using free software like IRS Free File - this will help you understand the process 3. Then work backwards and file 2023, 2022 (remember, you only have until April 2025 for 2022!) 4. For any missing W-2s, you can get wage transcripts directly from the IRS website The process really is much simpler than it seems, especially with just W-2 income. The software asks you questions in plain English and does all the calculations. You'll likely be pleasantly surprised by how much you get back - many people in retail/food service jobs get substantial refunds because of how withholding works with variable hours and the Earned Income Tax Credit. Don't let another year go by! You've probably got hundreds or even thousands of dollars waiting for you.

As a newcomer here, I just want to say thank you to everyone who contributed to this discussion! I'm in my first year of full-time employment and was completely baffled when the IRS withholding calculator told me to put my $6,000 in 401k contributions on line 4a as "other income." Like the original poster, this seemed totally backwards to me. After reading through all these responses, I checked my paystub and confirmed that my employer is already reducing my federal taxable wages by the exact amount of my 401k and health insurance premiums. This means they're handling the withholding calculations correctly, and I don't need to make the adjustment the calculator suggested. It's really reassuring to see so many people had the same confusion and that there's such a clear way to verify what's actually happening with your specific payroll situation. The advice about checking your paystub first before making any W4 changes based on the calculator is invaluable. I almost made what could have been a costly mistake by blindly following the calculator's recommendation without understanding my employer's payroll system first. This community has been incredibly helpful for someone just starting to navigate all these tax and benefit decisions!

As someone who works in employee benefits administration, I wanted to add some context about why this confusion is so widespread. The IRS withholding calculator was designed to be a catch-all tool, but it can't possibly know the nuances of every employer's payroll system. Most large employers use sophisticated payroll software (like Workday, ADP, or Paychex) that automatically calculates federal withholding AFTER subtracting pre-tax deductions. This is called "post-deduction withholding" and it's the industry standard. Your 401k, HSA, health insurance premiums, and other pre-tax items are removed from your gross pay before any tax calculations happen. The calculator's recommendation to add these amounts on line 4a essentially assumes your employer might not be doing this correctly, which is why it seems backwards. It's trying to "fix" a problem that probably doesn't exist in your payroll system. Before making any W4 changes, always look at your paystub. If "Federal Taxable Wages" or "Fed Tax Wages" is less than your gross pay by the amount of your pre-tax deductions, your employer is already handling everything properly. In that case, ignore the calculator's advice about line 4a - you'd just be creating unnecessary overwithholding. This is honestly one of the most common misconceptions I see employees struggle with during benefits enrollment season!

Don't overthink the terminology. "Freelancer" is just a common term people use, but for tax purposes, you're either an employee (W-2) or an independent contractor (1099-NEC). The key factors are: - Who controls when and how you work - Whether taxes are withheld from your pay - If you receive benefits - Whether you work for multiple clients - If you use your own equipment If clients pay you directly without withholding taxes, you're almost certainly an independent contractor and need to set aside money for taxes yourself!

Since you've made $7,200 in freelance income this year, you'll definitely need to report this as self-employment income regardless of whether you call it "freelancing" or "independent contracting" - they're the same thing tax-wise. Here's what you need to know: 1. You'll file Schedule C (Profit or Loss from Business) to report your website design income and any business expenses 2. You'll also need to file Schedule SE to calculate self-employment tax (Social Security and Medicare taxes) 3. Since you've earned over $400 in self-employment income, you're required to pay self-employment tax 4. Consider making quarterly estimated tax payments for next year to avoid penalties Keep track of all business expenses like software subscriptions, equipment, home office costs, etc. - these can reduce your taxable income. And yes, any client who paid you $600+ should send you a 1099-NEC form, but you must report all income even without the form.

This thread has been incredibly helpful! I'm in a similar situation as the original poster - had some good luck with sports betting apps this year and realized I have no idea what I'm doing tax-wise. One question I haven't seen addressed: what happens if you have a really good year gambling but then lose most of it back in the following tax year? Like if I win $15,000 in 2024 but then lose $12,000 of it in early 2025, I still have to pay taxes on the full $15,000 for my 2024 return, right? Those 2025 losses can't offset the 2024 winnings? Also, for anyone using the betting apps - do they automatically send you tax forms at the end of the year if you hit certain thresholds, or do you have to request your win/loss statements? I've been pretty lucky on FanDuel and DraftKings but haven't gotten any tax documents yet. Thanks to everyone who's shared their experiences here, especially about the record-keeping requirements. Definitely going to start taking screenshots of everything going forward!

Something I want to add that hasn't been covered much - if you're gambling across multiple platforms and casinos, you'll want to consolidate all your records early in the process rather than waiting until tax time. I made the mistake of keeping separate logs for each app and casino, thinking I'd combine them later. Come April, I had scattered records across 4 different betting apps, 2 casinos, and a bunch of handwritten notes from poker games. Trying to reconcile everything into one coherent picture was a nightmare, especially when some dates didn't match up between my bank statements and my gambling logs. Now I update one master spreadsheet every week with all activity from all sources. It takes about 15 minutes but saves hours of headache later. I also take a photo of any physical tickets or receipts immediately and upload them to a dedicated folder on my phone. The key is building the habit before you really need it. When you're having a good run and winning regularly, it's easy to think you'll remember everything or that you'll "figure it out later." Trust me - you won't, and it becomes exponentially harder to reconstruct accurate records as time goes on.

The timing confusion you're experiencing is really common! Since you spent the money in 2023 but didn't start generating income until 2024, you'll want to take the startup cost deduction on your 2024 tax return. The IRS considers your business to have "begun operations" when you first started providing services and earning income, not when you incurred the expenses. So you can deduct up to $5,000 of your startup costs directly on your 2024 return, and the remaining $2,200 would need to be amortized over 15 years starting in 2024. Don't amend your 2023 return - that would actually be incorrect since your business wasn't considered "active" yet according to IRS definitions. Make sure to keep all your receipts from 2023 as documentation for these startup expenses, even though you're claiming them in 2024. The key is when your business began operating, not when you paid for the expenses.

This is such a great question and the answers here are really solid! I went through the exact same confusion with my consulting business last year. One thing that might help clarify - the IRS Publication 535 has a section specifically on startup costs that breaks down the timing rules pretty clearly once you know what to look for. The key phrase is "begins business operations" which they define as when you start the activities for which your business was organized - so in your case, when you first started doing paid photography work in 2024. Even though you spent the money preparing in 2023, the deduction goes on your 2024 return. Also worth noting - keep excellent records of all those 2023 expenses because if you ever get audited, you'll need to prove both the amount and that they were legitimate startup costs. The IRS can be pretty strict about what qualifies versus what they consider personal expenses or regular business costs.