Does FreeTaxUsa handle state returns for multiple states? I worked in both New York and New Jersey this year and that's always a pain to figure out.

This is exactly what I needed to hear! I've been using H&R Block online for the past 4 years and watching my filing costs go from around $80 to over $160 this year. I also have W-2 income plus some freelance work that requires Schedule C, so our situations sound very similar. I've been hesitant to switch because I'm worried about missing something or making a mistake, but reading everyone's experiences here is really encouraging. The fact that you got the same refund amount when you tested both systems is reassuring. One question - did you have any trouble importing your previous year's tax information, or did you have to start fresh and re-enter everything? That's always been my biggest concern about switching software mid-stream.

One thing I learned the hard way as a pianist - make sure you clearly document which vehicle expenses go with which type of income! I got flagged for an audit because I deducted all my travel, but some was for my W-2 teaching position (not deductible) and some for my 1099 gigs (deductible). Keep a mileage log with dates, destinations, purpose, and which "job" it was for. There are apps that can help track this automatically. This distinction between W-2 and 1099 related expenses is super important and something many musicians miss.

As someone who's navigated the musician tax maze for years, I want to emphasize something that hasn't been mentioned yet - the importance of understanding the "exclusive use" test for your home studio deduction. Since you mentioned teaching private lessons from your home studio, you can absolutely deduct that space, but it must be used EXCLUSIVELY for business purposes. If your home studio doubles as a family room or storage area, the IRS won't allow the deduction. The space needs to be dedicated solely to your music business activities. For calculating the deduction, you can either use the simplified method ($5 per square foot up to 300 sq ft) or the actual expense method (percentage of home expenses based on square footage). Given your multiple income streams, I'd recommend the actual expense method since you can likely justify a larger deduction. Also, don't forget about the Section 199A deduction (QBI deduction) for your 1099 income! As musicians with Schedule C income, you may qualify for up to a 20% deduction on your qualified business income. This can be substantial savings that many musicians overlook. One last tip - consider whether any of your equipment purchases qualify for Section 179 depreciation, which allows you to deduct the full cost in the year of purchase rather than depreciating over several years. This applies to items like recording equipment, instruments, and computers used for your business.

Has anyone here actually had their NOL challenged by the IRS? I'm worried about carrying forward my losses properly.

This is such a common source of confusion! I went through the exact same thing last year with my construction business. The key thing to remember is that for tax purposes, NOL is calculated from your bottom-line taxable income - meaning AFTER all legitimate business deductions including mortgage interest. In your example, you're absolutely correct that you'd have a $1300 NOL in year 1, and you'd carry forward $1040 (80% of $1300) to offset year 2's income. So you'd only owe taxes on $60 in year 2. The confusion often comes from mixing up accounting terminology (operating income) with tax terminology (taxable income). For IRS purposes, it's always about your final taxable income after ALL deductions. One tip: make sure you're tracking your NOL carryforward amounts carefully each year. I use a simple spreadsheet that shows the original NOL, how much I've used each year, and what's remaining. The IRS loves documentation if they ever question it.

Honestly, podcasts have been my favorite way to learn! I listen to "Money Girl" and "Taxgirl" on my commute. They explain complicated tax concepts in everyday language and keep you updated on changes.

As someone who was completely overwhelmed by taxes when I started working, I found that combining multiple learning approaches worked best for me. Start with the IRS's free "Understanding Taxes" online modules - they're actually pretty well designed for beginners and cover the fundamentals without being too dry. What really helped me was creating a simple spreadsheet to track different tax concepts as I learned them. For example, I'd note down what each box on my W-2 meant, common deductions I might qualify for, and how tax brackets actually work (spoiler: it's not as scary as it sounds!). Also, don't underestimate the value of going through last year's tax return line by line, even if someone else prepared it. Understanding what happened with your own taxes is often the best way to learn the practical side of things. You can use tax software to "practice file" your previous year's return and see how different scenarios would change your outcome. The key is starting simple and building up your knowledge gradually. You don't need to become a tax expert overnight!

Does anyone know if the state filing requirements follow the same rules? My kids have investment accounts that are mostly in-state municipal bond funds that are supposedly tax-exempt for federal but taxable for state purposes.

Great question about the yearly changes! Yes, the kiddie tax thresholds do adjust annually for inflation. For 2024 tax returns (filed in 2025), the threshold is indeed $2,300 for unearned income before a child needs to file. Based on your numbers ($190 + $165 + $1,850 = $2,205 per child), you're correct that each child falls below the threshold and won't need Form 8615 this year. This is a common situation where families had to file in previous years but don't need to anymore due to the threshold increases. One thing to keep in mind: make sure you're looking at the right tax year's thresholds. The 2024 threshold ($2,300) applies to income earned in 2024, which you'll file in 2025. If you're comparing to last year when you had to file Form 8615, that would have been under the 2023 threshold, which was $2,200. Also worth noting that these Vanguard accounts will likely generate similar income patterns going forward, so it's good to stay aware of how the thresholds change each year. The IRS usually announces the inflation adjustments for the following year in the fall.