One thing to consider - there are multiple education benefits (American Opportunity Credit, Lifetime Learning Credit, and the tuition and fees deduction), and you can only claim one of them. The AOTC is usually the most valuable (up to $2,500 and 40% refundable) but has more restrictions. Make sure you look at all your options to see which gives you the biggest tax benefit. And don't forget that your state might have additional education credits too!

Make sure you're looking at a 1098-T, not a 1095-T! 1095-T is for health insurance coverage, but 1098-T is for tuition payments. Easy to mix up the numbers but they're completely different forms for tax purposes!

Does anyone know if you need a SEIN (State Employer Identification Number) in California just to issue 1099s? I'm in the same boat - freelancer in California occasionally hiring other freelancers, but I don't have any employees. Getting conflicting info about whether I need to register with EDD just to issue a few 1099s.

As someone who went through this exact situation last year as a California-based event planner hiring contractors across multiple states, I can share what I learned! The key thing to understand is that as an individual freelancer (not a business entity), your reporting obligations are much simpler than what corporations deal with. You're only required to report to California since that's where you're based and file your taxes. For boxes 5-7 on the 1099-NEC: - Box 5: Enter "CA" (your state) - Box 6: Leave blank if you don't have a California state employer ID (which you don't need as a freelancer with only independent contractors) - Box 7: Enter the full payment amount The contractors you hired are responsible for reporting their income to their respective home states (AZ, NY, CO). You don't need to file 1099s in those states unless you have a business registration or physical presence there, which it sounds like you don't. One important tip: Make sure you have W-9 forms from all your contractors before filing. This ensures you have the correct tax ID numbers and addresses, which prevents TIN mismatch penalties from the IRS. Track1099 should handle the electronic filing process smoothly once you have the boxes filled out correctly. You're doing great by getting this sorted out - many freelancers miss this requirement entirely!

I went to Jackson Hewitt once and never again. The "tax professional" was literally reading from a script and typing my answers into the same software I could use at home. When I asked about deducting home office expenses for my freelance work, they seemed confused and had to ask someone else. If u have a simple return, save ur money and DIY. If ur situation is complex like yours sounds, find a real CPA or EA (enrolled agent). National chains are basically just using the same software you can buy, but charging you $300+ for the privilege.

I went through something very similar last year - W-2 job until August, then multiple freelance clients with different 1099s, plus I moved states in July. I ended up going with Jackson Hewitt and honestly, it was worth it for the peace of mind. The key thing is what others mentioned - ask specifically for someone experienced with self-employment and multi-state returns. My preparer caught several deductions I never would have thought of, like the moving expense deduction (which is more limited now but still applies in some situations), partial business use of my car between freelance clients, and some startup costs for my freelance work. The multi-state part was especially tricky because I had to file as a part-year resident in both states, and there were some reciprocity rules I didn't understand. She walked me through everything and made sure I wasn't double-taxed on any income. I paid about $380 total for federal and two state returns with Schedule C. Yeah, it's pricey, but considering I would have probably screwed something up doing it myself and potentially faced penalties or missed deductions, I felt it was worth it. This year I might try one of the AI options people are mentioning though - seems like the technology has gotten a lot better.

This is really helpful timing! I just got my W-2 and was dreading the whole tax filing process. I've used TurboTax for years but the fees keep going up - paid almost $120 last year for federal and state filing plus some "premium" features I probably didn't even need. Quick question though - when you say AGI under $41,000, is that before or after standard deduction? I'm a teacher and my gross salary is around $43k, but after my 403(b) contributions and other pre-tax deductions, my taxable income is definitely under $41k. Want to make sure I understand the qualification correctly before I get started with FreeTaxUSA. Also appreciate all the discussion about the other tools mentioned here. Sounds like there are more resources available than I realized for making tax season less stressful!

Thanks for sharing this Julian! I'm definitely in that AGI range and have been putting off thinking about taxes. Quick question - do you remember if FreeTaxUSA handled multiple income sources well? I have a part-time W-2 job and also do some freelance work with 1099s. Some of the free services I've looked at in the past seemed to get confused when I had both types of income, or they'd suddenly want to charge me extra for the 1099 forms. Also really appreciate everyone sharing their experiences with the various tools and services. It's so frustrating how tax filing has become this maze of hidden fees and limitations. Sounds like there are actually some good resources out there if you know where to look!

This is a great discussion that highlights a really important distinction. I've seen this confusion come up repeatedly with small business owners who think paying themselves a W-2 salary will somehow legitimize their business or provide better tax benefits. The key takeaway here is that tax structure should follow legal structure, not personal preferences. A disregarded single-member LLC cannot create an employer-employee relationship with itself - it's legally impossible. Your friend's reasoning that it "feels more like a real business" doesn't change the fundamental tax law. Beyond the compliance issues everyone's mentioned, there are practical problems too. If your friend is filing employment tax returns (940, 941) for these phantom wages, he's creating a paper trail that doesn't match his actual business structure. This inconsistency is exactly what can trigger IRS scrutiny. The irony is that if he wants the benefits of paying himself a salary (like potential self-employment tax savings), he should consider making an S-Corp election. Then he'd be legally required to pay himself reasonable compensation as a W-2 employee, and any additional profits could be distributed without self-employment tax. But that's a completely different tax structure with its own requirements and limitations. Bottom line: work with the structure you have, not against it.

I went through this exact situation with my LLC two years ago and learned the hard way that what feels right business-wise isn't always what's correct tax-wise. Like your friend, I thought paying myself a W-2 would make everything more "official" and help with business credit applications. The wake-up call came during a routine IRS notice review when they questioned why I was filing payroll returns (Forms 941) for a single-member LLC that hadn't made any elections. The agent explained that I was essentially trying to be my own boss and employee simultaneously, which creates a circular relationship the tax code doesn't recognize. Here's what I learned about the QBI impact: You're absolutely right that treating wages as a business expense would reduce your QBI deduction base. But since those wages shouldn't exist in the first place, the IRS would likely reclassify them as self-employment income anyway during an audit. So you'd lose the QBI deduction benefit AND create compliance headaches. The fix was straightforward - I stopped the W-2 nonsense, filed amended returns for the affected years, and switched to proper Schedule C reporting with owner's draws. No penalties since it was clearly an honest mistake, but definitely a lesson learned about following tax law rather than personal preferences. If your friend really wants the structure and potential tax benefits of paying himself a salary, he should seriously consider an S-Corp election. Then the W-2 becomes not just allowed but required!