Thanks for sharing this - makes me feel a bit better. Did you have to pay a lot in penalties when you amended for those stock gains? And how long did the whole amendment process take?

The penalty wasn't bad at all - I think it ended up being around $80 plus some interest on the unpaid tax. So all in maybe $120 extra beyond what I would have paid originally. The amendment took about 3-4 months to process completely, which I hear is actually pretty fast for the IRS these days. Just make sure you keep copies of absolutely everything you submit and proof that you sent it (certified mail is good).

This isn't always true - I tried to amend through TurboTax and they wanted to charge me for the "deluxe" version even though my original filing was free. Ended up having to pay like $60.

H&R Block's truly free version doesn't support Schedule C or self-employment income. You'd need their Self-Employed version which runs about $85 for federal filing plus another $37 per state. I switched from them to FreeTaxUSA last year and saved a ton of money. H&R Block isn't terrible, but they're almost as expensive as TurboTax for self-employment stuff.

Thanks for the info! That's disappointing but good to know before I waste time starting with them. Seems like FreeTaxUSA is the winner for most people in this thread.

I've thought about going the direct form route, but I'm a bit intimidated by figuring out depreciation schedules on my own. Did you find good resources for learning how to do that part correctly? I'm comfortable with the general Schedule C stuff but some of the more technical aspects make me nervous about doing it without software guidance.

I found Publication 946 from the IRS really helpful - it explains all the depreciation rules. There are also some free online depreciation calculators that can help you determine the right amounts. I created a spreadsheet that I update each year for tracking my business assets and depreciation. The first year was definitely the hardest, but now I just update my spreadsheet annually. I actually feel more confident now because I understand exactly what's happening rather than trusting software to make the right choices for me. If you're comfortable with spreadsheets, it's totally doable with a bit of research.

Wait, could I still qualify for stimulus money from 2021? I thought those were all sent out automatically. I definitely never received anything back then.

Yes, you might still be able to claim the Recovery Rebate Credit on your 2021 return if you didn't receive the stimulus payments and were eligible! The third stimulus payment (Economic Impact Payment) of up to $1,400 was issued in 2021, and many people who were eligible didn't receive it for various reasons. If you file your 2021 return now, you can claim this as the Recovery Rebate Credit. There's a worksheet in the 2021 Form 1040 instructions to help you determine if you qualify and how much you can claim. This is exactly why filing a return even with zero income can be beneficial - you might have money waiting for you!

Also remember to sign and date the return! IRS will reject unsigned returns and that just delays everything further. Ask me how I know 😩

Can you deduct things like a coffee maker or mini fridge in your office space? I have both in mine and use them exclusively during work hours, but wasn't sure if that crosses into "personal use" territory.

This gets into a gray area. The coffee maker and mini fridge would generally be considered conveniences rather than necessities for business function. The IRS might view these as personal items even if used during work hours. The key test is whether they're ordinary and necessary for your specific business. For example, if you regularly have client meetings in your home office and provide refreshments, you might have a stronger case. But for most home offices, these items would be scrutinized in an audit. If you do claim them, keep detailed logs showing they're used exclusively for business purposes. Personally, I'd be cautious about claiming these unless they're clearly tied to a business need beyond personal convenience.

How much was the recapture? Was it a significant amount? I've been doing the regular method for 4 years now but might switch to simplified if the recapture is really bad.

It was about $7,400 in my case, which definitely hurt. I had been deducting about 20% of my 1,500 sq ft house for 7 years, so it added up. The recapture is basically taxing the depreciation benefit you received over the years. If you've only been doing it for 4 years, it won't be as bad as mine was, but it's something to consider. I would have probably still done the regular method because the yearly tax savings were significant, but I wish I'd put some of those savings aside knowing I'd have to pay some back eventually. The simplified method is safer if you don't want to deal with recapture later.

If I have multiple side businesses I run from the same home office, can I claim the deduction for each business or is it one deduction total? And does having a home office deduction affect selling your house later with the capital gains exclusion?

You can't double-dip by claiming the same home office space for multiple businesses. You need to allocate the space between your businesses based on usage, but the total can't exceed 100% of that space. For example, if you use your office 60% for Business A and 40% for Business B, you'd deduct those percentages of your eligible home office expenses on each business's Schedule C. Regarding capital gains, yes, there's an impact. If you've taken depreciation on your home through the regular method home office deduction, you'll need to recapture that depreciation when you sell. The simplified method doesn't include depreciation, so it doesn't affect your capital gains exclusion the same way. This is actually a big advantage of the simplified method that many people overlook.

I was audited two years ago. They mainly wanted to verify that my office was exclusively used for business. I provided photos, a diagram of my apartment showing the dedicated room, and my work calendar showing regular use. They also looked at my utility bills compared to what I deducted. Since I had most documentation, it went smoothly, but it was stressful. Now I keep way better records.