You're absolutely right to be cautious about those numbers! Yes, since you don't have earned income, your standard deduction as a dependent would be limited to $1,150 for 2024. With $750 in gambling winnings, you'd have $750 - $1,150 = $0 taxable income, so you shouldn't owe any federal income tax. However, the key question is whether FanDuel withheld any taxes from your winnings. If they did withhold federal taxes (which they sometimes do for larger winnings), that's where your refund would come from - getting back taxes that were withheld but not actually owed. Check your 1099-MISC from FanDuel in box 4 to see if any federal income tax was withheld. If there's an amount there, that's likely what FreeTaxUSA is showing as your potential refund. If box 4 is blank or $0, then you probably won't get a refund but you also shouldn't owe anything either. Make sure when you're in FreeTaxUSA that you've selected "Someone can claim you as a dependent" so it calculates everything correctly with the limited standard deduction!

Perfect! It sounds like you've got everything figured out now. Just to add one more thing for peace of mind - since you and your fiancé are in this situation where he's claiming you as a dependent, you might want to keep good records of your respective tax filings in case the IRS ever has questions. It's pretty straightforward when done correctly (which it sounds like you're doing), but having documentation that shows he meets the requirements to claim you as a qualifying relative dependent, and that you filed correctly as someone who can be claimed, just helps if there are ever any questions down the road. Congrats on the FanDuel win and getting that $180 back! Sounds like you'll be filing correctly and everything will work out smoothly.

The Statistical Determination System (SDS) and Discriminant Function System (DIF) that the IRS uses for audit selection doesn't include refund distribution methods in its algorithm. The correlation between advances and audits that some people perceive is likely because both are more common among early filers with EITC claims, not because one causes the other.

I completely understand your anxiety about this! As a fellow freelancer who's been through the advance process, I can share that your worry is normal but likely unfounded. The key thing to remember is that tax advances are purely a financial product between you and the lender - they have zero impact on IRS audit selection algorithms. Your meticulous record-keeping is actually your biggest asset here. The IRS audits based on red flags in your actual return data (unusual deductions, income ratios, etc.), not on how you chose to receive your refund. Since you've got your 1099s organized and business expenses tracked, you're already ahead of most taxpayers. One thing that helped ease my mind was understanding that even if you do get selected for review (which is statistically unlikely), having good documentation makes the process much smoother. The horror stories you hear are usually from people who didn't keep proper records, not from people like us who stay organized. Keep doing what you're doing with the documentation, and try not to stress about the advance - it really is just a non-factor in audit risk!

One additional strategy to consider is the potential for a partial exclusion even if you don't meet the full 2-year requirement. If you have to sell before completing 24 months due to unforeseen circumstances (job change, health issues, etc.), you may still qualify for a partial Section 121 exclusion based on the time you did live there as your primary residence. Also, don't forget about the tax implications of your current primary residence. If you've lived there for more than 2 years and it has appreciated significantly, you might want to consider which property has more potential gain that could benefit from the exclusion. Sometimes the math works better to keep the rental as rental and sell the current primary residence first, then do the conversion strategy later. Given your overtime income situation, another factor is timing the sale to occur in a year when your regular income might be lower (maybe a year with less overtime), which could help you stay under the NIIT threshold and potentially in a lower capital gains tax bracket. Tax planning for real estate sales really benefits from looking at the bigger picture across multiple tax years.

As someone who's been through multiple property sales and conversions, I'd strongly recommend getting a tax professional to run the actual numbers before making your decision. While the advice here about the Section 121 exclusion and your friend's suggestion is generally sound, your specific situation has several moving parts that could significantly impact which strategy is actually best. Consider that you'll need to factor in: 1) the actual appreciation amounts on each property, 2) how much depreciation you've claimed/should have claimed on the rental, 3) your income projections for the next few years, and 4) the carrying costs of holding properties longer. The "obvious" choice isn't always the most profitable when you run real numbers. Also think about your personal situation - living in a rental property for 2+ years to save on taxes sounds great in theory, but make sure it's practical for your lifestyle. If the rental is smaller, in a less desirable location, or would significantly impact your quality of life, the tax savings might not be worth it. Sometimes the best financial decision includes factors beyond just minimizing taxes. That said, with current property values, the potential tax savings from the primary residence exclusion could easily be $40,000-80,000+, which is definitely worth the effort to analyze properly.

Has anyone used FreeTaxUSA for reporting Twitch income? TurboTax keeps trying to charge me for the self-employment version even though I just need to file a Schedule E for royalties.

This is exactly the kind of confusion I had when I first started getting 1099s from my side income! The distinction between royalties and self-employment income is really important and can save you money. Just to add to what others have said - since you're operating at a net loss, make sure you keep detailed records of all your streaming-related expenses (equipment, software subscriptions, games, internet upgrades, etc.). Even though you're reporting on Schedule E for the royalty income, you can still deduct ordinary and necessary expenses against that income. Also, don't let TurboTax upsell you into the self-employment package if you don't need it! The basic version should handle Schedule E just fine. If your tax software is pushing you toward Schedule C, it's probably because it's seeing "1099" and assuming it's all self-employment income, but as others have explained, the 1099-MISC Box 2 royalties are different. One last tip - keep good documentation about the hobby vs. business question. The IRS looks at factors like whether you're trying to make a profit, how much time you spend on it, and whether you have the expertise to make it profitable. Since you mentioned you're still in the "costs money" phase, documenting your efforts to grow the channel and become profitable could be helpful if this ever comes up.

I'm a bit confused. What exactly is Box 14 used for on a W-2? Is that even taxable income?

I actually work in payroll and see this situation fairly often! When box 14 has a tiny amount but box 1 is blank, it's usually something like a final expense reimbursement, a small bonus adjustment, or even a rounding error from benefits calculations that got processed after your last regular paycheck. The key thing is to look at what's written next to that 6 cents in box 14 - there should be a description or code. If it just says "Other" with no explanation, you can definitely enter $0 in box 1 for TurboTax. Sometimes you need to go into the advanced W-2 entry mode rather than the simplified version. If TurboTax keeps rejecting it, try FreeTaxUSA or Credit Karma Tax - they tend to be more flexible with unusual W-2 situations. You shouldn't have to paper file for something this minor!