Thanks for sharing your experience! Did FreeTaxUSA handle any business expense deductions related to your 1099-NEC work? That's another aspect I'm concerned about since I have some home office and supply expenses to deduct.

Yes, FreeTaxUSA handles all business expenses related to 1099-NEC income without charging extra. It walks you through Schedule C reporting step by step, covering everything from home office deductions to business supplies, mileage, insurance - all the standard self-employment deductions. Their interface for business expenses is actually more straightforward than TurboTax in my opinion. It presents clear categories and explains what qualifies for each deduction type. I deducted my home office, internet, phone, software subscriptions, and some equipment purchases last year with no issues.

This advice is wrong and could cause problems. You should never select "I didn't file" if you actually did file. This inconsistency could flag your return. Always use accurate information on tax filings.

I did have a pretty expensive health insurance plan that was coming out pre-tax, plus I was maxing out my 401k that year. Could those really account for almost $95k difference between box 1/5 and box 3 though? That seems like a massive gap!

Health insurance premiums and 401(k) contributions typically reduce your Social Security wages, but $95k is an unusually large difference. Even if you maxed out your 401(k) at the 2018 limit ($18,500 plus any catch-up contributions if you were over 50), and had expensive health insurance (let's say $15,000-20,000 for a premium family plan), that would still only account for maybe $40,000 of the difference. If there's still a $55,000 gap unaccounted for, it's likely there was a reporting error. Another possibility is if you had some deferred compensation or special bonus arrangement that was treated differently for Social Security purposes. Either way, I would definitely contact your former employer for clarification.

Check if you contribute to a 457(b) plan. Those reduce your Social Security wages but not your Medicare wages. My wife works for the state and has this exact situation - big difference between box 3 and boxes 1/5 because of her 457(b) contributions and healthcare FSA.

Did you need to provide any financial documentation to get on a payment plan? I'm worried they'll want to see all my expenses and bank statements.

For my situation (owed about $7k), I didn't need to provide detailed financial documentation. They just asked about my general monthly income and expenses over the phone. If you request a larger monthly payment amount than they initially suggest, they're less likely to request detailed financial info. For larger tax debts (over $10k I think), they might ask for more detailed financial information using Form 433-F. But even then, it's not as invasive as people fear.

That's a great tip! Does it work for state taxes too? My levy was from the state department of revenue.

Wait so if the money goes from Fiverr to PayPal, and both might issue 1099s, how do you avoid reporting the same income twice?

You need to carefully identify the source of each payment on your Schedule C. The total income reported should match your actual earnings, not the sum of all 1099 forms (which could count the same money twice). For example, if you earned $8,000 on Fiverr and it all went to PayPal, you'd report $8,000 total self-employment income on your Schedule C, not $16,000. You might need to include a note with your tax return explaining that the same income appears on multiple forms. This is actually a common issue with payment processors and platforms, and the IRS is aware of it.

I used IRS Free File last year for my freelance income. Most of the free options can handle Schedule C, but there's a catch - if you have ANY deductions related to your freelance work (internet, computer, software subscriptions), you usually need to upgrade to a paid version. Basic free versions only work for super simple scenarios.

Thanks for all the advice everyone! I actually just tried FreeTaxUSA after reading these comments, and it handled my situation perfectly. Their free version does include Schedule C for self-employment income, and I only had to pay a small fee for the state return. Way cheaper than the "big name" options. I reported all my income from the PayPal 1099-K on Schedule C, made sure to include my business expenses, and everything went smoothly. I also added a note explaining that all my Fiverr income was already included in the PayPal 1099-K to avoid any confusion.

Did you claim any credits like EIC or child tax credit? I heard those automatically delay processing. I'm on day 25 of waiting and getting nervous...

No special credits at all, which is why I was surprised by the delay. Just a totally vanilla return with W-2 income and the standard deduction. From what I've gathered reading online, even the simplest returns seem to be taking longer this year. The IRS apparently prioritizes certain returns with credits for lower-income filers, which is understandable, but it means even simple returns can sit in the queue longer than usual.

Try calling the IRS directly at 1-800-829-1040. I was stuck in "still processing" for almost a month, called them, and found out there was a simple identity verification issue they never bothered to notify me about. After verifying my identity, I got my refund in 9 days.