Bit of a related question - has anyone successfully deducted home office expenses for their payment app income? I use a dedicated room in my apartment exclusively for the graphic design work that I get paid for through Venmo, but I'm not sure if it's worth the hassle or if it increases audit risk.

As someone who dealt with this exact situation last year, I want to emphasize something that might not be obvious - make sure you're distinguishing between gross receipts and actual taxable income when you report on Schedule C. For example, if you received $9,500 through payment apps but $1,200 of that was reimbursements from clients for materials you purchased for their projects, you'd only report $8,300 as gross receipts (assuming you're also deducting those material costs as business expenses). Also, don't forget about quarterly estimated tax payments for next year if your side gig income continues. Since payment apps don't withhold taxes like employers do, you might owe penalties if you end up owing more than $1,000 when you file. The IRS expects you to pay as you go, not just at year-end. One more tip: If you're using TurboTax, when you get to the Schedule C section, it will ask about your business code. For graphic design work, you'll want to use NAICS code 541430 (Graphic Design Services). This helps ensure your return is processed correctly and your deductions align with what the IRS expects for your type of business.

Does anyone know how long it takes for an amended return to be processed? I filed mine to claim the education credit like 2 months ago and the "Where's My Amended Return" tool still just says received.

Hey Freya! I was in almost the exact same situation last year - got my 1098-T weeks after filing and panicked about missing out on the education credit. Don't worry, you can definitely still claim it! You'll need to file an amended return using Form 1040-X. The process isn't too complicated once you understand it. First, gather all your education documents - your 1098-T, receipts for any out-of-pocket education expenses, and records of any scholarships or grants you received. The American Opportunity Credit is probably your best bet if you're in your first four years of college and enrolled at least half-time. It can get you up to $2,500, with up to $1,000 being refundable (meaning you can get it back even if you don't owe taxes). You'll need to complete Form 8863 (Education Credits) along with your 1040-X. Make sure to check how your scholarships/grants were applied - you can only claim the credit for expenses you actually paid out of pocket, not those covered by tax-free aid. The IRS is pretty backed up right now, so expect the amended return to take 12-20 weeks to process. But it's definitely worth it for potentially getting that money back! Don't let the paperwork intimidate you - thousands of students go through this same process every year.

Has anyone had success writing off health insurance premiums as a self-employed person? I'm paying so much out of pocket and I've heard conflicting advice about whether stylists can claim this deduction.

Welcome to the self-employment tax shock club! Your $6,700 bill is unfortunately very normal for your income level. Here's what's happening: you're paying both the employer AND employee portions of Social Security/Medicare taxes (15.3% total), plus regular income tax on your $37k net profit. A few things that might help for next year: - Set up quarterly estimated payments ASAP (due dates are Jan 15, Apr 15, Jun 15, Sep 15) - Consider maxing out a SEP-IRA or Solo 401k to reduce taxable income - Double-check you're capturing ALL legitimate deductions - travel to/from clients, professional magazines, even a portion of your phone bill if you use it for business The good news is you can usually set up a payment plan with the IRS if you can't pay it all at once. And now that you know what to expect, you can plan accordingly for 2025!

Have you considered filing Form SS-8 with the IRS? It's the "Determination of Worker Status" form. Based on what you described, you're almost certainly misclassified. Your employer is saving a ton of money by not paying their share of your taxes. The downside is that filing this form can create tension with your employer, but it could save you thousands. The IRS will make an official determination on whether you should be classified as an employee.

I went through something very similar last year! Making around $30k as a "contractor" but working exclusively in their office - my tax bill was shocking too. Here's what helped me: First, definitely look into the misclassification issue others mentioned. The IRS has a 20-factor test, and working only at their location with no remote work option is a big red flag for employee status. Second, even if you stay classified as a contractor for now, make sure you're claiming every legitimate business expense. Things like: - Portion of your cell phone bill used for work - Any work-related supplies you purchased - Mileage if you drive anywhere for work - Professional development or training costs Third, consider setting up quarterly estimated payments for next year so you don't get hit with this massive bill again. You can calculate roughly 25-30% of your gross income and pay that quarterly. The medical expenses are frustrating - at your income level, they'd need to exceed about $2,400 (7.5% of $32k) before you could even start deducting them, and then only if itemizing beats the standard deduction. Definitely talk to that tax professional, but don't panic - there are options to address both this year's bill and prevent this situation next year.

Another option is to try calling the general IRS customer service line at 1-800-829-1040 and asking them to transfer you to ID verification. Sometimes you can get through faster that way than calling the direct ID verify line. Also, if you have a local Taxpayer Assistance Center (TAC) near you, you can make an appointment and they can help verify your identity in person - might be faster than waiting on the phone!

Check if your local library has any free tax help programs too! A lot of them have VITA volunteers who are familiar with IRS verification issues and might be able to help you figure out next steps. Also worth trying the IRS2Go mobile app - sometimes it shows notices that don't appear on the website. Good luck! 🤞