Thanks for all this advice everyone. My total income including my W-2 job is definitely over that threshold, probably around $28k total. Sounds like I definitely need to report everything. Do you know if I can still claim business deductions even if I don't have receipts for things like gas and tools? And should I be worried about getting audited if this is my first time reporting self-employment income?

For business deductions without receipts, you can still claim reasonable expenses based on your best recollection, but start keeping better records immediately for the future. Many small business owners keep a dedicated credit card or checking account for business expenses which creates a record even without physical receipts. Regarding audit concerns, filing self-employment income for the first time doesn't automatically trigger an audit. The IRS is more concerned with patterns that don't make sense, like claiming excessive deductions relative to income. Report your income honestly, claim legitimate deductions you can reasonably support if questioned, and you'll significantly reduce audit risk. Going forward, even a simple spreadsheet tracking income and expenses will put you in a much better position.

This is terrible advice. The IRS has sophisticated methods to detect unreported income, including lifestyle analysis, bank deposit analysis, and information from third parties. They also run statistical comparisons against similar taxpayers in your area and profession. Plus the penalties for intentional non-reporting are severe - we're talking 75% penalty on the tax you should have paid PLUS interest PLUS potential criminal charges for willful evasion. They can look back many years if they suspect fraud. Not worth the risk for a few thousand dollars.

You're probably right. I didn't consider all that. I've always reported my side income but know plenty of people who don't. Guess they're taking a bigger risk than I realized.

Thanks for the insider perspective! Any idea why they wouldn't have sent any letters first? That's the part that really confused me. The customer claims they never got any notices before the agent showed up.

Most likely they did send notices, but there could be several reasons why your customer didn't receive them. Sometimes mail gets lost, delivered to old addresses, or even mistaken for junk mail and discarded. The IRS uses the last known address they have on file, which might be outdated if someone hasn't filed for several years. Another possibility is that the customer did receive notices but didn't recognize their importance. IRS notices can sometimes look like ordinary government mail, and people might set them aside without realizing what they are. Some taxpayers also honestly forget receiving notices when they're stressed about their tax situation.

Did your brother end up owing penalties even though he was due refunds? I'm behind on filing too but have been putting it off because I'm worried about getting hit with huge penalties even though I'm pretty sure I'll get money back.

Do you include car washes as a deductible expense? I've heard mixed things about whether the IRS considers that maintenance or a personal expense since you'd presumably wash your car anyway.

Car washes are definitely deductible as a maintenance expense for delivery drivers! When you're using your vehicle for business, keeping it clean is part of maintaining your professional image and service quality. Just like other expenses, you'd deduct the business percentage based on your business vs. personal mileage ratio. I keep all my car wash receipts and even have a monthly subscription to a local wash service that I deduct at my business use percentage (which is about 78% for me). The key is being reasonable - weekly washes might be justified, but daily washes might raise flags with the IRS.

What app do you use for automatically tracking miles? I've tried a couple but they either drain my battery or miss trips.

When is the deadline for F1 students to file taxes? Is it the same April 15 date as everyone else? I'm worried I might be late already.

Yes, F1 students have the same tax filing deadline as US citizens - April 15, 2025 for the 2024 tax year. However, even if you don't owe taxes, all F1 visa holders must file Form 8843 by the deadline. If you need more time, you can request an extension until October 15 by filing Form 4868, but remember that an extension only gives you more time to file the paperwork - if you owe any taxes, you still need to pay the estimated amount by April 15 to avoid penalties and interest.

Is there a way to check if you're considered a resident or nonresident alien without going through the entire tax filing process? I've been here for 4 years on F1 and never filed before (yikes, I know).

Regarding state taxes - is there any documentation I should keep to prove I was living abroad if my permanent address is still in the US? I'm worried my home state (California) will try to tax me even though I've been in Europe for most of the year.

For state tax residence documentation, keep copies of rental agreements, utility bills in your name from your foreign residence, entry/exit stamps in your passport, and airline tickets. California is particularly aggressive about claiming residents, so you'll want solid proof you've established a temporary residence elsewhere. If you're maintaining any California ties (driver's license, voter registration, bank accounts, etc.), document when those will be changed to your new location. Some digital nomads even take the step of establishing residency in a no-income-tax state before leaving the US, though that requires more planning and legitimate ties to that state.

I've used FreeTaxUSA for the past 2 years as a self-employed person living in Germany. They support all the forms you'd need including Schedule C, Form 2555 for Foreign Earned Income Exclusion, Form 1116 for Foreign Tax Credit, etc. Much cheaper than TurboTax and has worked great for my situation.