11 Has anyone here used both FreeTaxUSA and TurboTax for self-employment? I've heard TurboTax has better guidance for contractors but it's so expensive. Is FreeTaxUSA really good enough for handling all the 1099 stuff?

As someone who just went through this exact situation last year, I can confirm that FreeTaxUSA handles 1099 income really well. The key thing to remember is that you're looking for the "Self-Employment Income" or "1099-NEC" section under Income, not the old 1099-MISC section. Even if you never receive the official 1099-NEC form from your client, you absolutely must report that $4,875. Keep records of all payments - bank deposits, PayPal transfers, checks, whatever you have. The IRS cares about the income you earned, not whether you got the paperwork. One thing that caught me off guard my first year: make sure you understand that you'll owe self-employment tax (about 15.3%) on top of regular income tax. FreeTaxUSA calculates this automatically, but it can be a shock if you're not expecting it. For next year, consider making quarterly estimated payments to avoid a big tax bill. Also, start tracking every business expense now! Software subscriptions, art supplies, computer equipment, even a portion of your phone bill if you use it for work calls. These deductions can really add up for graphic designers.

One thing nobody's mentioned - if you received a W-2G form from the casino for your winnings, those amounts MUST be reported on your tax return regardless of your overall losses. I learned this the hard way. Proper procedure is: 1. Report ALL gambling winnings as income (including amounts on W-2G forms) 2. Itemize and deduct your losses (up to the amount of winnings) on Schedule A If you didn't do it this way on your original return, the IRS computer system will flag the discrepancy between the W-2G they received and what you reported. That's probably why you got the letter.

Based on everyone's advice here, it sounds like you have a solid case for resolving this issue. The key points I'm seeing are: 1. You need to respond within the 30-day deadline mentioned in your IRS letter 2. Gather all your documentation: casino player statements, your phone notes log, bank/credit card statements showing gambling-related transactions 3. Be transparent that you misunderstood the reporting requirements - you should have reported the W-2G winnings as income and then deducted losses on Schedule A Since you mentioned you're "freaking out" about this, I'd recommend taking a systematic approach. Start by organizing all your documentation chronologically, then draft a clear response letter explaining your net loss position with supporting evidence. The good news is this seems like a common misunderstanding rather than anything fraudulent, and the IRS generally works with taxpayers who provide proper documentation and respond in good faith. Many people here have successfully resolved similar situations, so while it's stressful, it's definitely fixable. If you're still feeling overwhelmed after gathering your documentation, consider consulting with a tax professional who has experience with gambling tax issues - they can review your response before you submit it to make sure everything is properly formatted and includes the right supporting evidence.

Does anybody know if the IRS charges interest when they owe YOU money? Like if they're taking forever to process a refund or in this case where they discovered they owe more. Seems only fair since they charge US interest when we owe THEM...

This is actually more common than you'd think! The IRS has gotten much better at automatically catching missed credits and deductions in recent years. With married filing jointly and kids as dependents, my first guess would be that you either missed or miscalculated the Child Tax Credit, Additional Child Tax Credit, or potentially the Earned Income Credit if your income falls within the qualifying range. The fact that they're processing an 8x larger refund suggests it's probably one of the major credits rather than just a simple math error. Don't panic - if the IRS is giving you more money, they've already done the math and verified it on their end. I'd definitely wait for that explanation letter before calling. It will break down exactly what they adjusted and why. Once you have that letter, you can compare it line-by-line with your original return to understand what happened. If everything checks out (which it probably will), then you can breathe easy knowing you legitimately qualified for more money than you originally claimed. The only thing I'd be cautious about is making sure you don't spend the money immediately just in case there's some kind of error that needs to be corrected later, but honestly, IRS adjustments in the taxpayer's favor are usually pretty solid.

Just to share my experience - I had a similar situation last year but my LLC had about $200 in expenses and no income. I called the IRS and after being on hold forever, they told me I definitely needed to file an amended return with Schedule C showing the loss. They said even though it wouldn't change my tax situation much, it was important for their records to show the business activity. The agent was actually pretty nice about it and said as long as I filed the amendment within a reasonable time, there wouldn't be penalties since I wasn't underpaying taxes.

I went through this exact same situation two years ago with my dormant LLC! The stress was real, but it turned out to be much less dramatic than I expected. Here's what I learned: Yes, you technically should file an amended return (Form 1040-X) with Schedule C showing the zero activity. Even though there's no tax impact, the IRS wants documentation that the LLC exists and had no activity rather than just ignoring it completely. The good news is there are no penalties when you're not underpaying taxes. I filed my amendment about 6 weeks after realizing my mistake, and it was processed without any issues or additional fees. Just make sure to clearly indicate on the Schedule C that this was a business with no activity during the tax year. One tip: keep good records going forward. Even if your LLC continues to have zero activity, you'll want to document that fact each year so you don't forget again. It's much easier to include a zero-activity Schedule C from the start than to amend later!

According to the SBTPG FAQ page (https://taxpayer.sbtpg.com/hc/en-us/articles/360001672771-When-will-I-receive-my-refund-), "Once your refund has been funded, it typically takes 1-2 business days for your bank to make the funds available to you." Have you checked with your bank to see if they're showing a pending deposit? Sometimes customer service can see incoming ACH transfers before they post to your account.

Same exact situation here! SBTPG showed funded yesterday around noon and I've been obsessively checking my account every few hours since then. It's reassuring to see so many others confirming this is normal - I was starting to wonder if something went wrong. Based on what everyone's saying, sounds like I should see it by tomorrow morning. The waiting game is the worst part, especially when you have bills due! Thanks for posting this question - definitely helped calm my nerves knowing I'm not alone in the SBTPG limbo.