Has anyone tried both FreeTaxUSA and TaxHawk? I keep hearing they're basically the same company/software but with different pricing?

Thanks for sharing this detailed comparison! I'm actually in a similar boat with Michigan taxes. I started with TurboTax but their fees were getting ridiculous, so I've been looking at these cheaper alternatives. Your experience with 1040.com's Michigan forms issue is really helpful to know about. I was about to give them a try since they advertise free state filing, but if their forms aren't ready yet that's a dealbreaker for me. I need to file early this year. The W2 PDF import feature on FreeTaxUSA sounds like a game changer. I have multiple W2s from different jobs this year and manually entering all that data is always such a pain. Even with the occasional OCR error you mentioned, that would save me a ton of time. $19 total for federal and state really isn't bad at all when you compare it to what the big names charge. I think I'll skip 1040.com for now and go straight to FreeTaxUSA based on your review. Thanks for saving me the headache!

Side note: Even if your CPA won't budge, YOU are the one signing your tax return, not them. The signature line says "Under penalties of perjury, I declare..." so ultimately it's your responsibility. If you have reasonable basis for your position (which it sounds like you do), you can override your CPA. They work for you, not the other way around. Either they file it the way you want with proper support, or you find someone who will. Just document your reasoning and keep support for your position in case of audit. Tax positions don't have to be 100% certain to be valid - they just need substantial authority.

Miguel, I completely understand your frustration! I went through something very similar last year with my beach condo rental. My CPA was also insisting on Schedule C treatment, but after doing my own research and getting a second opinion, I was able to demonstrate that Schedule E was the correct classification for my situation. The "substantial services" test is really the key here. From what you've described - providing furniture, parking, and basic essentials - that sounds more like typical rental property amenities rather than hotel-like services that would trigger Schedule C treatment. I'd strongly recommend getting that second opinion from a CPA who specializes in rental properties. Bring documentation of exactly what services you provide versus what you don't (no daily cleaning, no meals, no concierge services, etc.). The difference between paying SE tax and not paying it is significant enough to justify the cost of a consultation. Also keep in mind that if you do end up needing to switch CPAs over this issue, it's not necessarily a reflection on their overall competence - some practitioners are just more conservative or less familiar with the nuances of short-term rental taxation. The important thing is getting the classification right based on the actual facts of your situation.

Just a word of caution - if your wife is on F1 and working on campus, her employer might incorrectly continue to treat her as FICA-exempt even after she becomes a resident for tax purposes. Many university payroll systems automatically exempt all F1 students from FICA without checking their 5-year exemption status. If this happens and you know she should be paying FICA (either due to the MFJ election or because she's passed the 5-year substantial presence exemption), you might need to file Form 843 to pay those taxes separately. Otherwise, you could face penalties later if the IRS catches this discrepancy during an audit.

This is a great discussion with lots of helpful insights! I wanted to add one more consideration that hasn't been mentioned yet. If your wife does end up being considered a resident alien (either through the substantial presence test as Javier mentioned, or through the MFJ election), make sure to also consider the impact on any tax treaty benefits she might currently be claiming. Many tax treaties have provisions that exempt students from US tax on certain types of income (like fellowship or scholarship income), but these benefits are typically only available to nonresident aliens. Once she becomes a resident for tax purposes, she may lose access to these treaty benefits. This could be particularly important if she receives any scholarship money beyond tuition and required fees, as that income might become taxable when she transitions to resident status. You'll want to factor this into your overall calculation of whether MFJ makes financial sense. Also, don't forget that if you do make the MFJ election, you'll need to continue making it every year until you formally revoke it or her status changes naturally. It's not a year-by-year choice once you start.

Has anyone actually been audited over this? I've been deducting my gym membership for years as a 1099 dance instructor and never had a problem. I figure as long as it's not a crazy amount and I'm not claiming other suspicious deductions, the IRS has bigger fish to fry.

Thanks for sharing your experience, Jasmine - that's exactly the kind of real-world outcome people need to hear about. For anyone considering this deduction, it's worth noting that even if you have a legitimate business case, you need to be prepared to defend it with solid documentation if audited. The fact that fitness is required for your job doesn't automatically make gym memberships deductible - the IRS still applies the "personal benefit" test pretty strictly. If you do decide to take this deduction, I'd recommend: 1) Keep a detailed log showing gym usage specifically for work-related fitness (not general health) 2) Document any specific fitness requirements in your referee contracts 3) Consider whether you'd have the membership anyway for personal reasons 4) Maybe consult with a tax professional if the deduction is substantial The potential tax savings might not be worth the audit risk and hassle for everyone, especially if it's a borderline case.

Has anyone actually been audited over this specific issue? I'm wondering if the IRS even cares which schedule we use as long as we're accurately reporting all income and paying the appropriate taxes? Seems like so much anxiety over something that might not matter to them...

I've been dealing with this exact same confusion for my vacation rental property! After reading through all these responses, I'm leaning toward trying one of the tools mentioned here to get some clarity. The thing that's really frustrating me is that I've talked to two different CPAs and gotten completely opposite advice. The first one said Schedule E because "it's just a rental property," but the second one said Schedule C because I provide amenities and spend significant time managing it. What really concerns me after reading Sadie's comment is the self-employment tax difference. That 15.3% extra on Schedule C income is huge - for someone like Heather with $38,000 in rental income, that could be an extra $5,814 in taxes! But if you're supposed to file Schedule C and don't, the penalties could be even worse. I think I'm going to try reaching out to the IRS directly using that Claimyr service Muhammad mentioned. Getting it straight from the source seems like the only way to avoid all this conflicting advice from tax professionals who can't seem to agree on basic interpretations of the same IRS publications. Has anyone else noticed that this whole debate seems to have gotten more confusing in recent years? I swear when I first started renting my place out 3 years ago, everyone just used Schedule E without question.