Great advice in this thread! One thing I'd add - make sure you're keeping detailed records of ALL your income, not just what shows up on payment apps. I learned this lesson with my freelance work when the IRS asked for documentation during a review. Keep screenshots of payments, transaction histories, and any correspondence with buyers. Also, don't forget about potential business expenses! If you're buying props, lighting, or even specific nail polish/pedicures for your photos, those could be legitimate deductions. The key is that they have to be ordinary and necessary for your business. I'd recommend consulting with a tax professional at least once to make sure you're maximizing your deductions while staying compliant - it's usually worth the cost when you're dealing with self-employment income for the first time. Good luck with your business!

One thing I haven't seen mentioned yet is the importance of understanding your state tax obligations too! While everyone's focused on federal taxes (which is definitely priority #1), don't forget that most states also require you to report self-employment income on your state return. Some states have different thresholds or rules for small business income, and a few states don't have income tax at all. But if you're in a state like California or New York, you'll want to make sure you're compliant there too. Also, since you mentioned this is your first time with non-W2 income, I'd strongly recommend setting aside 25-30% of your earnings in a separate savings account specifically for taxes. It's better to overestimate and get a refund than to be caught short when tax time comes around. Self-employment taxes can be a shock if you're not prepared for them! The quarterly payment advice from earlier is spot on - once you hit that $1,000 threshold, the IRS really does expect those estimated payments. Missing them can result in penalties even if you pay everything when you file your return.

One thing to be aware of with McDonald's franchises that affects your taxes - McDonald's typically owns or controls the real estate and leases it to you as the franchisee. This is different from some other franchise systems. The lease payments are tax-deductible business expenses, but it also means you're not building equity in the real estate (which can be a major asset).

Great question! I work in tax preparation and see this confusion a lot with new franchise owners. Each McDonald's franchise is indeed a separate business entity that files its own tax returns - you're not part of McDonald's corporate tax return at all. When you buy a McDonald's franchise, you're purchasing the right to operate under their brand and systems, but you're running your own independent business. You'll typically form an LLC or corporation, get your own EIN, and file separate tax returns. The royalty fees you pay to McDonald's corporate (currently around 4% of gross sales) are just business expenses you deduct on your return. One key thing to consider early - many multi-unit franchise owners I work with wish they had structured their business entities better from the start. If you're planning to eventually own multiple locations, talk to a CPA about whether to set up separate entities for each location or use a holding company structure. It can save you headaches and money down the road. Also worth noting that franchise tax situations can get complex with things like equipment depreciation, building improvements, and the real estate lease arrangements that McDonald's typically uses. Definitely budget for a good accountant who understands franchise businesses - they'll more than pay for themselves in tax savings and compliance.

The verification of non-filing letter is totally normal for recent filers! I had the same panic when I filed early last year - acceptance doesn't mean processed. The IRS basically sends you this letter as a placeholder until they finish working through your return. Once they complete processing, it'll switch to showing your actual return transcript. Just keep checking weekly, and don't worry about the "no record" language - it's just their standard wording for returns still in the queue.

Same situation here! Filed on 2/6 and seeing the exact same non-filing letter. Was starting to wonder if something went wrong with my e-file but sounds like this is just standard procedure. The IRS really needs to update their wording though - saying "no record of processed return" when they actually DO have your return but just haven't finished processing it is super confusing for us taxpayers. At least now I know to stop obsessively checking every day and just wait it out 😅

Quick tip: if you expect to pay freelancers regularly, consider getting an EIN instead of using your SSN for everything. It's free and you can do it online in like 10 mins. It adds a layer of legitimacy to your business and helps with identity protection since you won't be giving out your SSN.

Just wanted to add that you should also keep track of any fees Upwork charged you for using their platform - those are deductible business expenses too! I made the mistake of only tracking what I paid the freelancers and missed out on deducting the service fees. On Schedule C, the freelancer payments go on line 11 (contract labor) and the Upwork fees would typically go on line 10 (commissions and fees). Also, if you're planning to continue hiring freelancers regularly, consider setting up a separate business bank account even as a sole proprietor. It makes record-keeping so much easier come tax time and helps establish that clean separation between personal and business expenses that the IRS likes to see.

Has anyone checked the IRS2Go app to see if it shows different information than the website? According to https://www.irs.gov/refunds, the app sometimes updates before the website. Also, are you checking your transcript or just WMR? I'm finding conflicting information online about which cycle codes update on which days this year.

I feel your frustration! I went through the exact same thing when my cycle code switched from 05 to 01. The waiting game is brutal when you see others getting updates and you're just sitting there hitting refresh. From my experience with cycle 01, your transcript should update tomorrow (Tuesday) morning around 6-7 AM EST. The key difference is that cycle 01 processes Monday nights instead of Friday nights like cycle 05. So while your 05 friends got their updates this past Saturday, you're on the Tuesday schedule now. Filed 2/17 and accepted 2/19 puts you right in the normal processing window - you're actually ahead of schedule compared to the typical 21-day timeframe. I know it doesn't make the wait any less annoying though! Try checking your transcript early tomorrow morning before you check WMR, as transcripts usually update first. Hang in there - being cycle 01 actually tends to be faster overall once you get used to the Tuesday update schedule! 🤞