Quick question - do expenses for a 1099 side gig get reported on Schedule C? I'm using TurboTax for the first time this year after my usual tax guy retired.

I've been dealing with this exact situation for the past three years with my freelance writing business. What I learned (the hard way) is that you absolutely should claim all your legitimate business expenses, even if they exceed your 1099 income. Here's why: that net loss from Schedule C flows through to your main tax return and reduces your overall adjusted gross income. This means you're paying less tax on your W2 income too. In my case, I had about $3,000 in 1099 income but $5,500 in valid business expenses (home office, equipment, software subscriptions, etc.). That $2,500 loss saved me roughly $600 in taxes when applied against my regular job income. The key is making sure your expenses are truly business-related and well-documented. Keep receipts, maintain a business bank account, and document your efforts to grow the business. I track everything in QuickBooks and have a simple business plan that shows I'm actively working toward profitability. Don't let fear of an audit stop you from claiming legitimate deductions. As long as you can substantiate your expenses and demonstrate business intent, you're following the tax code correctly.

Something nobody has mentioned - make sure you've actually owned AND lived in the property for at least 2 years. The exclusion requires both. Also, if you've taken the exclusion on another home sale within the past 2 years, you might not be eligible again so soon. Just wanted to throw that out there in case either situation applies to you!

Has anyone here used TurboTax to report their home sale? I'm wondering if it walks you through all this exclusion stuff clearly or if I should go to a professional for my upcoming house sale.

11 Has anyone had issues with the "born alive" requirement? My twins were born December 24th, but one had complications and sadly passed away two days later. The hospital issued a birth certificate AND a death certificate. Can I still claim both as dependents for 2021?

Congratulations on your new baby! Yes, you can absolutely claim your December 21st baby as a dependent for the entire 2021 tax year. The IRS has a simple rule: if a child is born at any point during the tax year, they can be claimed as a dependent for the full year. You'll be eligible for the full $3,600 Child Tax Credit for 2021 - there's no proration based on how many days your baby was actually here. And you're correct about the $1,400 Economic Impact Payment - since your baby wasn't born when those went out, you'll claim it as the Recovery Rebate Credit on your 2021 tax return. Regarding the SSN and birth certificate timing - you'll need your baby's Social Security Number to actually file your tax return and claim her as a dependent. The good news is that the date the documents are issued doesn't matter, only her actual birth date. So even if her SSN card doesn't arrive until February 2022, you can still claim her on your 2021 taxes as long as you have the number before you file. If you're getting close to the filing deadline and still don't have the SSN, you can always file for an extension to give yourself more time. But once you have that number, you're all set to claim all the benefits for your little one!

One important detail that hasn't been mentioned yet - since you're starting a new job in November 2024, make sure to account for any withholding that already happened earlier this year from your previous employer. The W4 calculator assumes you're working the full year at that salary level. If you had a different job earlier in 2024 with different withholding amounts, you'll need to manually adjust the calculator inputs to reflect your actual year-to-date withholding and income. Otherwise, you might end up over-withholding for the remaining paychecks. Also, for your $15k side gig income - if this is 1099 work, remember you'll also owe self-employment tax (Social Security and Medicare) on that income, which is about 15.3%. The withholding calculator accounts for income tax on that $15k, but not the additional self-employment tax. You might need to withhold even more than the calculator suggests, or make quarterly estimated payments to cover that SE tax portion.

Adding to the excellent points about self-employment tax - there's another consideration for your W4 withholding that might help explain the difference between 2024 and 2025 calculations. The IRS withholding calculator for 2025 is likely factoring in the scheduled expiration of several TCJA provisions, including changes to the child tax credit, earned income tax credit, and other credits that could affect your overall tax liability. This might be why you're seeing a lower additional withholding recommendation for 2025 ($180 vs $250). However, since you mentioned owing $1,200 last year, I'd strongly recommend being conservative with your withholding. Consider using the higher 2024 amount ($250) even when you switch to 2025 calculations next year, at least until we have more clarity on what tax legislation Congress will actually pass. For your immediate situation starting in November, you'll definitely want to increase that per-paycheck withholding significantly since you'll only have a few paychecks left in 2024. You might also want to consider making a fourth-quarter estimated payment in January 2025 to cover any shortfall from your side gig income, especially the self-employment tax portion that others mentioned.

Does anyone know if the IRS is still doing that first-time penalty abatement I've heard about? I'm in almost the identical situation (unfiled 2022-2023, self-employed) and wondering if that could help me?

Victoria, I completely understand that crushing anxiety - I was in your exact shoes 18 months ago with unfiled returns from my freelance graphic design work. The panic attacks were real, but I promise you this is absolutely manageable. Here's your immediate action plan: **STEP 1:** Contact your bank ASAP and request detailed statements for 2022-2023. Most banks can provide up to 7 years of records. Also check any business banking apps, PayPal, Venmo, or Zelle for transaction histories. **STEP 2:** Reach out to clients you worked with during those years. Many will still have records of payments made to you, and some might even have copies of invoices you sent them. **STEP 3:** Check your email for ANY business-related correspondence - contract confirmations, payment notifications, expense receipts, travel bookings, etc. This can help reconstruct your business activities. **STEP 4:** File those returns IMMEDIATELY, even if incomplete. The failure-to-file penalty is much worse than failure-to-pay, and it stops accruing once you file. For penalties: You're likely looking at 5% per month (max 25%) for failure-to-file, plus 0.5% per month for failure-to-pay, plus interest. But if you qualify for first-time penalty abatement, you can get one year's penalties completely waived. The IRS has payment plan options if you can't pay everything at once. Don't let fear paralyze you - every day you wait, the penalties grow. You've got this!