Has anyone considered whether insurance proceeds should be reported as income? If you got a settlement for the total loss but then repaired it anyway, that settlement might be taxable if it exceeded your basis in the vehicle.

Just wanted to add one more point that might be relevant - if you're planning to sell the repaired vehicle in the future, you'll want to keep detailed records of what you spent on repairs. While you can't deduct these expenses now, they could affect your capital gains calculation when you eventually sell the car. For tax purposes, the repair costs you paid out of pocket (after receiving the insurance settlement) would be added to your "basis" in the vehicle. So if you originally paid $15k for the car, got a $10k settlement, then spent $4,800 on repairs, your new basis would be $9,800 ($15k - $10k + $4,800). This could reduce any potential gain if you sell it later for more than that amount. It's a small consolation since you can't deduct the expenses now, but at least those receipts might save you some taxes down the road if the car appreciates or you sell it for more than expected.

If your combined income for the year is under $73,000, you can use IRS Free File to e-file both your federal and state returns for free! I used it for my two-state situation last year and it worked great. The wizard asks where you lived during the year and guides you through the process for filing multiple state returns.

I notice there's some confusion in the comments above - the original poster mentioned working in Colorado first then Arizona, but one commenter referred to California instead of Arizona. Just wanted to clarify for anyone following along! For your specific situation (Colorado → Arizona), you'll file your federal 1040 to the IRS processing center for Arizona residents since that's your current state of residence. For state returns, you'll need to file a Colorado part-year resident return (not non-resident, since you lived there for part of the year) and an Arizona part-year resident return as well. The key difference between part-year resident and non-resident filing can affect your tax liability significantly, so make sure you're using the right forms for each state. Both Colorado and Arizona have specific rules about how to allocate income and deductions for part-year residents.

wait so ur telling me these random numbers actually mean something? 🤔 ive been ignoring mine lmaooo

Congrats on getting the 811! That's the code we all want to see 🎉 For anyone else confused by transcript codes, here's a quick breakdown: 424 = under review, 810 = account frozen, 811 = freeze released. The cycle dates and DDD (Direct Deposit Date) are what really matter for timing. Dylan, you should definitely see that money hit your account on 2/24!

Just a heads up since you're new to self-employment - don't forget you can deduct legitimate business expenses to lower your taxable income! Home office (if you have dedicated space), supplies, mileage for business travel, professional licenses, continuing education, health insurance premiums, etc. This can significantly reduce what you owe. Write down EVERYTHING and keep all receipts. I use a simple spreadsheet + a folder in Google Drive with photos of all receipts. My tax person loves me for being organized lol.

As someone who went through this exact transition last year, I completely understand your stress! The good news is that you're not automatically setting yourself up for an audit just by missing quarterly payments. Audits are typically triggered by other red flags like unreported income, excessive deductions, or inconsistent information across tax documents. That said, you definitely want to get current on your estimated taxes soon. Since you've made $57k so far, you're likely looking at owing around $8,000-$10,000 in self-employment tax alone (15.3% of your net earnings), plus regular income tax on top of that. My suggestion: calculate what you should have paid for the quarters you've missed and make a payment ASAP. The IRS actually has a pretty straightforward online tool for estimated tax payments. Even though you're between deadlines, paying now shows good faith and will minimize additional penalties. Also, start setting aside 25-30% of each payment you receive going forward - this saved me from scrambling at tax time. Your accountant should be helping you calculate exact amounts, so maybe push for a more detailed conversation about your specific situation rather than just "it'll be fine.

Great question! The previous answers are spot on - you can absolutely use your business losses to reduce your W-2 income, and this is completely separate from your standard deduction. This is actually one of the main tax advantages of having a business, even in the early loss years. Just to add a practical perspective: when you file Schedule C with your $8,300 loss, that loss flows directly to Line 3 of your Form 1040 as a negative number. So your calculation would be: - W-2 wages: $62,000 - Business loss: ($8,300) - Total income: $53,700 - Less standard deduction: $13,850 - Taxable income: $39,850 This could save you around $1,600-2,000 in taxes depending on your tax bracket. Keep excellent records as others mentioned - separate business bank account, save all receipts, and document your business activities. The IRS is more likely to scrutinize Schedule C losses, especially in early years, but as long as you're genuinely trying to build a profitable business and can document legitimate expenses, you should be fine. Consider consulting a tax professional for your first year with business losses - they can help ensure you're maximizing deductions while staying compliant.

One important detail to add to the excellent advice already given - make sure you understand the timing of when you can deduct different types of startup expenses. Some of your $8,300 in losses might need to be handled differently depending on what they were for. Generally, ordinary business expenses (like inventory, supplies, advertising) can be deducted immediately. But certain startup costs like legal fees for business formation, market research, or pre-opening advertising might need to be amortized over 15 years rather than deducted all at once, though you can elect to deduct up to $5,000 of startup costs immediately if your total startup costs are under $50,000. Equipment purchases over certain amounts might also need to be depreciated over several years unless you elect Section 179 expensing (which lets you deduct the full cost immediately up to certain limits - $1.16 million for 2023). This won't change the fact that you can offset your W-2 income, but it might affect how much of that $8,300 loss you can actually claim this year versus future years. Worth double-checking how your expenses are categorized to make sure you're maximizing your current-year deduction!