I appreciate all the detailed responses here! Based on what I'm reading, it sounds like filing 2023 first is definitely the safer approach. The technical point about prior year AGI verification for e-filing is particularly compelling - I'd rather not deal with rejection codes and delays. One follow-up question: since my 2023 return is now quite late, should I expect any specific complications during processing? I'm wondering if late-filed returns get flagged for additional review or if they generally process at the same speed as on-time filings. Also, given that I mentioned having investment gains, are there any special considerations for capital gains reporting on late-filed returns that I should be aware of? Thanks again for all the guidance - this community has been incredibly helpful!

As a newcomer here, I want to echo what others have said about filing 2023 first, but also share a practical tip that helped me when I was in a similar situation. When you do file your 2023 return, consider using certified mail if you're paper filing, or keep detailed records if e-filing. Since it's late, having proof of submission date can be crucial if any questions arise later. Also, if you owe money on the 2023 return, you might want to pay any taxes due immediately when filing to minimize additional interest charges. The IRS continues to charge interest on unpaid balances even after you file the return. I learned this the hard way when I delayed both filing AND payment - the interest really adds up over time!

Has anyone used MileIQ app for tracking? I've been using it for about 6 months and it automatically tracks my drives and lets me swipe left for personal or right for business. Wondering if the logs it generates are sufficient for tax purposes?

Great question! You're definitely on the right track with tracking both mileage and meals. Just wanted to add a few practical tips from someone who's been through several tax seasons with similar deductions: For your mileage log, what you're doing is solid, but consider adding the specific business purpose for each trip (like "client consultation," "project delivery," etc.). The IRS likes to see WHY the trip was necessary for business. Also, keep your odometer readings consistent - some people get tripped up by forgetting to record the ending mileage. One thing I learned the hard way: if you're meeting clients at restaurants, make sure you're actually discussing business during the meal. The IRS can be picky about meals that are purely social vs. those with a legitimate business purpose. I always jot a quick note on the receipt about what we discussed. Since you're new to this, consider setting up a simple system now - maybe a dedicated folder for receipts and a consistent format for your mileage log. It'll save you tons of time come tax season. And definitely keep everything for at least 3 years in case of an audit!

For anyone curious about the whole process, I just wanted to share that Michigan's energy draft system has been around for years and it's actually pretty reliable once you understand how it works. The reason they use these special drafts instead of regular checks or direct deposit is because it ensures the funds go specifically toward heating costs, which is the whole point of the Home Heating Credit program. One thing I learned from talking to my utility company rep is that they actually prefer these energy drafts over regular payments because they process them differently in their system - it shows up as a state assistance credit rather than a regular payment, which can be helpful for your account history if you ever need to reference it later. The 7-day window they give you is pretty accurate too - in my experience over the past few years, I've received mine anywhere from day 5 to day 7, never longer. If you're past day 10 and still haven't received anything, that's when I'd recommend calling the Michigan Treasury customer service line to check on it. Also worth noting that if you move before using your energy draft, you'll need to contact Michigan Treasury to get it reissued to your new address - they won't forward it through regular mail forwarding services since it's considered a financial instrument.

As a newcomer to this whole process, I just want to say how helpful this thread has been! I'm in a similar situation - my Home Heating Credit claim just switched to "completed" status yesterday (Feb 9th) with the same "energy draft issued" message. Reading through everyone's experiences has really put my mind at ease about what to expect. The timeline breakdown and practical tips like taking a photo of the draft before submitting it are exactly what I needed to know. It's also reassuring to hear that the portal not showing the dollar amount is totally normal - I was starting to worry there was some kind of error with my application. Thanks to everyone who shared their real-world experiences with this process. It's so much better than trying to decode the official government explanations! Now I know to watch for that plain white Treasury envelope in the next few days and have a good understanding of how to handle it when it arrives. This community is awesome for helping newcomers navigate these confusing systems! 🙌

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.

Question for those who've filed late S corp elections - if I file Form 2553 now (August 2024) requesting an effective date of January 1, 2024, do I need to file my 2024 quarterly estimated tax payments based on S corp tax treatment or still as a single-member LLC until the election is approved?

I went through this exact situation last year and can confirm that the late S corp election relief is definitely available, but there are a few important details to get right that I wish someone had told me upfront. First, when you file Form 2553 for the late election, make sure you're requesting the effective date as January 1, 2024 (not your LLC formation date in September 2023). The S corp election can only be effective from the beginning of a tax year, so even though you formed the LLC in September 2023, your earliest possible S corp effective date would be January 1, 2024. Second, since you mentioned you've been paying yourself a reasonable salary and taking distributions, make sure you have all those payroll records organized. The IRS will want to see that you've been consistently operating as an S corp, including proper payroll tax withholdings and quarterly 941 filings. If you haven't been doing formal payroll with withholdings, you might want to get that straightened out before filing the election. The reasonable cause statement doesn't need to be overly complex - I kept mine to about 3-4 sentences explaining that I was unaware of the deadline and that my regular tax advisor was unavailable. The key is showing you had good faith intent to elect S corp status from the beginning of the tax year. One last tip: include copies of your LLC operating agreement and any documentation showing you intended S corp treatment (like board resolutions about salary, etc.) to strengthen your case. Good luck!