Has anyone noticed that FreeTaxUSA sometimes has issues with the 8606 form? Last year I had to manually enter some stuff because it wasn't calculating my basis correctly after a conversion.

This is a really common mistake! At $95k income, you're definitely above the deduction threshold if you're covered by a workplace retirement plan. The correct approach is: 1. Don't take the Traditional IRA deduction - you're not eligible 2. File Form 8606 to report your $3,200 as a non-deductible contribution 3. Report the conversion to Roth on your return The reason your tax software is behaving this way is because you can't do both - either it's a deductible contribution (which you're not eligible for) OR it's a non-deductible contribution that requires Form 8606. Since you converted immediately, there shouldn't be any taxable gain on the conversion itself. You'll get a 1099-R next year showing the distribution, but since you're properly reporting the non-deductible basis on Form 8606 this year, the conversion won't be taxable. Think of it this way: you put in post-tax money ($3,200), so when you convert that same post-tax money to Roth, there's no additional tax owed. The 8606 is crucial because it tells the IRS "hey, I already paid taxes on this money.

As someone who's been doing content creation for a few years now, I can confirm that both expenses you mentioned are likely deductible if you're treating this as a legitimate business. For the pedicures/manicures: Since your feet are literally the product in your content, these fall under "ordinary and necessary" business expenses. The key is documentation - keep receipts and note which services were specifically for content creation vs. personal maintenance. I recommend creating a simple spreadsheet linking each service to specific content/photoshoots. For the Surface tablet: If you're using it exclusively (or nearly exclusively) for your business, you can deduct the full purchase price using Section 179 or depreciate it over time. Since you mentioned it's basically only used for taking photos and posting content, you're in great shape here. Pro tip: Start tracking your business expenses in a dedicated app or spreadsheet right now. Include date, amount, purpose, and how it relates to your income-generating activities. This will make tax time so much easier and give you confidence if you're ever questioned about deductions. Also consider other potential deductions you might be missing: portion of your phone bill, internet costs, props/backgrounds, lighting equipment, storage/cloud services, and even a portion of your home if you have a dedicated space for content creation.

Great question! As someone who works in tax preparation, I can tell you that both of these expenses can potentially be deductible, but the key is establishing a clear business purpose and maintaining proper documentation. For your pedicures and manicures: Since your feet are the focal point of your content and directly generate income, these treatments can qualify as ordinary and necessary business expenses. However, you'll need to distinguish between basic maintenance (personal expense) and treatments specifically for your content creation (business expense). Keep detailed records showing which services were done specifically for photoshoots or content creation. For your Surface tablet: If you're using it exclusively or primarily for your business activities (taking photos, editing, posting), you can likely deduct the full cost. You can either take the full deduction in the year of purchase using Section 179 or depreciate it over several years. Some important tips: - Keep all receipts and maintain a business log - Consider opening a separate business bank account - Track the percentage of business vs personal use for any shared items - Document your content creation schedule to show the business connection Since this is your first year with significant income, I'd also recommend consulting with a tax professional who can review your specific situation and ensure you're maximizing deductions while staying compliant.

One thing to consider is setting up as an LLC and electing S-Corp taxation once you're consistently profitable. I did this with my dropshipping business last year. The main benefit is that you can pay yourself a reasonable salary and take the rest as distributions, which aren't subject to self-employment tax. Saved me about 15% tax on a significant portion of my income. Obviously you'll want to wait until your business is consistently making at least $30-40k profit before this makes sense due to the additional costs of payroll services and state LLC fees.

Don't forget about the home office deduction if you're running this from home! Since you're doing dropshipping, you likely have a dedicated workspace for managing orders, customer service, and business operations. You can either use the simplified method ($5 per square foot up to 300 sq ft) or calculate the actual expenses method. For most small dropshippers, the simplified method is easier - just measure your workspace and multiply by $5. Also, keep track of business use of your phone and internet. If you use your personal phone 50% for business (checking orders, customer calls, etc.), you can deduct 50% of your phone bill. Same goes for internet if you're managing your store from home. One more tip: start keeping a mileage log if you drive anywhere for business purposes - bank deposits, picking up supplies, meeting with vendors, etc. The 2025 mileage rate is 67 cents per mile, which adds up quickly. These deductions alone could save you hundreds on your tax bill, especially when you hit those higher-earning quarters.

My wife's name was misspelled on our joint return last year (Maria vs Mariah). We did nothing about it and still got our refund on time with no issues. I think people get way too stressed about minor stuff like this. The IRS has bigger problems than hunting people down over a typo lol.

I actually had the exact same issue with my name last year - Aleksandre vs Alexandre! What a coincidence. I ended up calling the IRS using that Claimyr service someone mentioned earlier (after wasting 2 hours on hold the traditional way first). The agent I spoke with said that as long as the first letter and general structure of the name are the same, and your SSN matches, it typically won't cause processing delays. She did recommend that I make sure my tax preparer uses the correct spelling next year though, because repeated discrepancies over multiple years could potentially flag your account for additional scrutiny. The agent was able to add a note to my file about the spelling variation, which gave me peace of mind. My refund came through right on schedule, so I think you should be fine. But definitely worth getting it on record with them if you can get through!

Great that you found those 1099s! Just to add another perspective - since you're a student with relatively low income, make sure you're not missing out on any refundable credits. Even if you don't owe taxes after the standard deduction, you might still be eligible for refunds through credits like the Earned Income Tax Credit (EITC) if you qualify. Also, keep good records of these stipend payments and any related expenses. If the stipends were for research, volunteer work, or educational activities, there might be deductions you can claim that could offset some of that income. The key is making sure everything is properly documented and reported - which sounds like you're on the right track now that you have the 1099s!

Great question about research expenses! For grad students with research stipends, expenses directly related to your research activities may indeed be deductible, but it depends on how the stipend is classified and your specific situation. If your stipends are considered taxable income (which sounds likely based on the 1099s), you might be able to deduct unreimbursed research expenses as business expenses on Schedule C if the research work is considered self-employment. This could include travel, materials, equipment, and other necessary expenses. However, if you're considered an employee of the university/organization (even as a student), the rules are different and many of these expenses may not be deductible under current tax law. Since research stipend taxation can be quite complex for grad students, especially with the interaction between stipends, scholarships, and potential employee status, I'd recommend getting specific guidance. You could try using one of the tax analysis tools mentioned earlier in this thread, or consider speaking directly with someone at your university's financial aid office - they often have experience with how different types of student payments are treated for tax purposes. Keep detailed records of all your research-related expenses regardless - you'll need them if you do qualify for deductions!