Isn't there a hobby loss rule or something too? I thought if you make money selling stuff regularly, even personal items, the IRS might consider it a hobby and there are different rules for that vs a business vs just selling your personal junk?

This is a great question that many people face when transitioning from business to personal sales! Based on your description, you're absolutely right to treat these current sales as personal property rather than business income. The key factors working in your favor are: 1) You're not actively running a reselling business anymore, 2) These are items you've owned for many years (15+ years for some), 3) You have no receipts because they were gifts or personal purchases from long ago, and 4) You're likely selling them for less than their original value. Even though you'll receive a 1099-K if you exceed $600 in sales, you should report this on Schedule 1 (Line 8z - Other Income) with a description like "Personal items sold at loss" rather than on Schedule C. This shows the IRS you're properly accounting for the 1099-K without incorrectly categorizing it as business income. Just make sure to keep good records showing these were long-term personal possessions - photos of items before selling, notes about when you acquired them, any old emails showing they were gifts, etc. This documentation will be valuable if the IRS ever questions why you had Schedule C income one year but not the next.

This is a really helpful thread! I'm dealing with a similar situation with my teenager's I-Bonds. We elected annual reporting to take advantage of the kiddie tax exclusion, but I was confused about how to handle the 3-month penalty when we had to redeem early for unexpected expenses. Based on what everyone has shared here, it sounds like option 1 is definitely the way to go - only report the interest you actually get to keep. It makes sense that the penalty effectively means that interest was never earned in the first place. I'm curious though - does this same principle apply if you have multiple I-Bonds purchased at different times and you only redeem some of them early? Do you calculate the penalty impact on a bond-by-bond basis, or is there some other method for tracking which specific interest gets forfeited?

This thread has been incredibly helpful! I'm a newcomer here but dealing with the exact same situation. My daughter had I-Bonds that we redeemed early for college expenses, and I was completely confused about how to handle the 3-month penalty with annual reporting. From everything I've read here, it's clear that option 1 is correct - only report the interest you actually get to keep after the penalty. The logic makes perfect sense that if interest is forfeited due to early redemption, it's treated as never having been earned in the first place. One follow-up question though - when you're calculating which months of interest to exclude, do you work backwards from the redemption date? So if I redeemed in March 2024, would I exclude January, February, and March 2024 interest? Or is there a specific method the Treasury uses to determine which 3 months are penalized? Also, has anyone had their return questioned by the IRS when using this method? I want to make sure I have proper documentation in case there are any questions during review.

Anyone else notice that TurboTax has gotten worse over the years? I used to be fine paying for it back when it was like $50 all-in, but now with all the upsells and add-ons it was gonna be over $150 for me this year!! Absolutely crazy. Just made the switch to FreeTaxUSA after seeing this post. Thanks for the recommendation.

Made the switch from TurboTax to FreeTaxUSA this year too and I'm honestly shocked at how much better the experience was. No constant pop-ups trying to sell me "audit protection" or "maximum refund guarantees" that I never needed anyway. The thing that really got me was when TurboTax tried to charge me extra just to download a PDF copy of my own tax return! FreeTaxUSA gives you everything upfront with clear pricing. Federal was free, state was $15, done. No surprises at checkout. I've been telling everyone I know about it - maybe I'll be someone's "7th mention" that finally gets them to switch too!

My parents were exactly like your mom - loyal TurboTax customers forever. What finally changed their mind was when the news broke about TurboTax deliberately hiding their free filing options and misleading customers. Remember that whole scandal? The company had to refund millions to users they tricked into paying. FreeTaxUSA has been around for over 20 years but they focused primarily on word-of-mouth rather than massive ad campaigns. That's why they seemed to "come out of nowhere" when they started gaining popularity. The main reason I trust them is they've never had major data breaches (unlike certain big-name tax services) and they're actually more transparent about their pricing.

I switched to FreeTaxUSA three years ago after getting tired of TurboTax's yearly price increases and aggressive upselling tactics. What sealed the deal for me was researching their background - they're actually TaxHawk Inc., founded in 2001 by a CPA named Brad Schwarzenbach in Utah. They've been profitable for years without venture capital funding, which explains why they can keep prices low without needing to maximize revenue per customer. The security concerns are totally valid, but they use 256-bit SSL encryption (same as online banking) and are SOC 2 Type II certified, which means they undergo annual independent security audits. They also don't sell your data to third parties - their revenue model is based on charging for state returns and optional services, not harvesting personal information. I've filed with them for complex situations including rental property income, stock sales, and multiple state returns. Never had an issue with accuracy or IRS acceptance. The interface isn't as flashy as TurboTax but it's actually more straightforward in some ways - less marketing fluff, more focus on getting your taxes done correctly.

I want to add something important that I don't think has been fully addressed yet. Since you're living in your car full-time, you need to be extra careful about establishing your tax domicile and residency status. This could affect which state you need to file in, especially if you're driving across state lines or staying in different locations. Also, while you can't double-dip on the car rental expense, there might be other business expenses related to your unique situation that you haven't considered. For instance, if you're using gym memberships for shower facilities, or paying for storage units for personal items, these might have business components if they're necessary for you to maintain your ability to work. Keep detailed records of everything, including where you're parking overnight. If you're ever questioned by the IRS, having documentation that shows your car is genuinely your primary business vehicle (not just a place you happen to sleep) will be crucial for maintaining that 100% business deduction on the rental.

I've been following this thread with interest as someone who does tax prep for several gig workers. One thing I want to emphasize that hasn't been fully covered - the IRS has specific rules about "listed property" for vehicles used in business. Since you're using this rental car more than 50% for business (which sounds like your situation), you can indeed deduct 100% of the rental costs. However, I'd strongly recommend keeping a contemporaneous log that shows not just your Uber miles, but also the times when you're "available" in the app even if not actively driving. The IRS considers time spent positioning yourself to receive business (like driving to busy areas or waiting in queue zones) as business use too. Given your unique living situation, you might also want to consider whether you're truly an independent contractor versus someone who should be treated as having significant business investment. With $18K+ in vehicle costs against $45K income, you're running a pretty capital-intensive operation. Make sure you understand the hobby loss rules and can demonstrate profit motive - keep records showing you're actively trying to optimize your earnings, tracking profitable times/locations, etc. The complexity here might warrant spending a few hundred on a tax pro who specializes in gig economy returns rather than relying solely on TurboTax.