Great question! I went through this exact same confusion when I bought my Tesla Model 3 last year. The $7500 is indeed a tax CREDIT, not a deduction - meaning it reduces your actual tax bill dollar-for-dollar, which is much better than a deduction would be. At $130k income, you're well under the income limits for single filers ($150k), so you should qualify. The "non-refundable" part just means if you only owe $5000 in taxes for the year, you can only use $5000 of the credit (you don't get the extra $2500 back as a refund). But with your income level, you'll almost certainly owe more than $7500 in federal taxes, so you should be able to use the full credit. One important thing to double-check: make sure the specific Tesla model and trim you're buying meets the price cap requirements ($55k for cars, $80k for SUVs/trucks). Some higher-end configurations don't qualify. Also verify that Tesla still qualifies for the full $7500 - the credit amount can change based on battery component sourcing. Good luck with your purchase! The credit really does make a significant difference in the total cost.

One more thing to consider - timing matters! If you're planning to buy in the next few months, be aware that the point-of-sale rebate option is now available for many dealers. This means instead of waiting until you file your taxes to get the $7500 benefit, you can potentially get it applied as a discount right at the dealership when you purchase. However, not all dealers participate in this program, and if you use the point-of-sale option, you can't also claim the credit on your tax return - it's one or the other. The upfront discount can be nice for cash flow, but make sure you understand how it works with your specific dealer. Also, keep all your paperwork! You'll need the dealer's certification that the vehicle qualifies, along with your purchase agreement showing the VIN, to properly claim the credit if you don't use the point-of-sale option.

Quick question about Schedule C and business startup - do I have to wait until I make my first sale to start deducting expenses? I'm spending money now on equipment and supplies but won't have any income for probably 2-3 months.

Great question! I went through this exact same confusion when I started my consulting business. The key thing to understand is that Schedule C business deductions and your personal standard deduction are completely independent of each other. Think of it this way: Schedule C calculates your business profit (income minus expenses), and that NET profit then becomes part of your personal income on Form 1040. Then separately, you decide whether to take the standard deduction or itemize your PERSONAL deductions (like mortgage interest, charitable donations, etc.). For your photography equipment - absolutely deductible on Schedule C if it's used for business! The $1,200 camera, editing software, props, backdrops, lighting equipment, memory cards, etc. are all legitimate business expenses. You can either expense smaller items immediately or depreciate larger equipment over several years. One thing to watch out for: make sure you can demonstrate this is a business and not just a hobby. The IRS has a "hobby loss rule" that can disallow deductions if they think you're not trying to make a profit. Keep good records, have a business plan, and try to show profit in at least 3 of 5 years. Also consider setting up a separate business bank account and credit card from day one - it makes tracking expenses so much easier come tax time!

I was in almost exactly your situation last year! 29 years old, hadn't filed since 2018, and felt completely overwhelmed. Here's what I wish someone had told me: First, don't panic about the 2019 deadline - while you might not be able to claim a refund for 2019 anymore (3-year rule), you should still file it if you owed taxes to avoid penalties piling up. For documents, start simple: create an IRS online account at irs.gov and request your wage transcripts. This will show you all the W-2 income that was reported to the IRS for each year, even if you don't have the physical forms. You can also request transcripts of any 1098-T education forms. The stimulus payments are HUGE - don't miss out on this! I got back over $3,000 in missed stimulus money when I finally filed my 2020 and 2021 returns. You claim them as the "Recovery Rebate Credit" on those tax returns. Since you were likely a dependent during college years, double-check if your parents claimed you. If so, you might not have been required to file for years when you made under ~$12,400, BUT you should still file if any taxes were withheld from your paychecks - that's money you can get back. For software, I personally used TaxAct for prior year returns (way cheaper than TurboTax for multiple years) and it walked me through everything including the stimulus credits. The whole process took me a weekend once I had my documents. You've got this! The hardest part is just starting.

I completely understand the overwhelm you're feeling - I was in almost the exact same situation two years ago! Here's my advice as someone who successfully navigated this mess: **Start with the IRS online account first** - create one at irs.gov and request wage and income transcripts for each year. This will show you exactly what income was reported to the IRS, even if you've lost your W-2s. The identity verification can be tricky online, but it's worth trying first before mailing forms. **Don't stress about the filing order** - you can file your returns in any order. I actually started with 2021 first because I knew I'd get the biggest refund (stimulus money + withholdings), which gave me motivation to continue. **You're likely owed significant money** - between missed stimulus payments (potentially $3,200 total) and any tax withholdings from your part-time jobs, you could be looking at a substantial refund rather than owing money. **For the Pell Grants** - these are generally not taxable income as long as you used them for qualified education expenses (tuition, required books/supplies). Room and board portions would be taxable, but many students don't realize this distinction. **Consider your dependency status carefully** - if your parents claimed you as a dependent during those college years, it affects your filing requirements and eligibility for certain credits. The hardest part really is just getting started. Once you request those transcripts and see what income was actually reported, the path forward becomes much clearer!

Has anyone tried working with a tax attorney instead of dealing with the IRS directly? I'm in a similar situation owing about $45k and wondering if it's worth the expense.

I'm going through something similar right now - owe about $58k and was terrified they'd force me to liquidate everything. After working with the IRS directly, I can confirm what others have said about them being more reasonable than expected. They absolutely do NOT require you to drain your entire savings or sell essential assets like your car. The key is being completely honest about your financial situation. When I filled out Form 433-F, I documented every expense including my modest emergency fund (about 3 months of expenses) and they accepted it as reasonable. They even acknowledged that having some emergency savings actually makes you more likely to stick to the payment plan. My advice: don't panic and start liquidating assets before talking to them. With your $60k income, you'll likely qualify for a payment plan around $800-1000/month depending on your other expenses. The IRS wants to get paid, not destroy your ability to earn income or maintain basic living standards. Take a deep breath - this is manageable even though it feels overwhelming right now.

From my experience, track EVERYTHING expense-wise. When I started contracting for a Japanese company last year, I didn't realize how many legitimate business deductions I could take. Internet, portion of rent/mortgage for home office (if you have dedicated workspace), computer equipment, software subscriptions, professional development courses, even part of your cell phone bill if you use it for work. It all adds up!

One thing I haven't seen mentioned yet is keeping detailed records of all your communications and contracts with the Dutch company. Since this is cross-border income, you'll want to maintain clear documentation showing: 1. Your contractor agreement/statement of work 2. Invoices you send them (even if they don't require formal invoicing) 3. Payment records showing the USD amounts and dates 4. Any correspondence about the work arrangement This documentation will be crucial if the IRS ever has questions about the nature of your income or work relationship. It helps establish that you're truly an independent contractor rather than an employee (which could have different tax implications). Also, since you mentioned money is tight, consider setting up a separate business checking account for this income. It makes tracking much easier come tax time and looks more professional. Many credit unions offer free business checking accounts for small businesses. The 30-35% rule mentioned earlier is solid advice, but in your first year you might want to err on the side of setting aside closer to 35-40% until you get a feel for your actual tax liability after deductions.