Does IRS Free File work for people with 1099 income? I thought there were income limits or restrictions on who can use it.

Yes, IRS Free File does work for people with 1099 income, but there are income limits that change each year. For 2023 returns (filed in 2024), the income limit is $73,000 regardless of filing status. If your income is below that threshold, you can use Free File regardless of whether you have W-2 income, 1099 income, or both. The program supports all the standard tax forms including Schedule C for self-employment. Just be aware that some of the participating software providers in the Free File program might have additional restrictions.

This is good advice. Last year I had a similar issue and when I compared the forms side by side, I found that one software had put my state tax refund from the previous year on the wrong line. It was counting it as taxable income when it shouldn't have been.

I would have done that, but that was my whole issue with TurboTax - they wouldn't let me see the actual 1040 form without paying first! That's why I switched to FreeTaxUSA. After redoing everything from scratch in TurboTax the second time, both softwares gave me the same refund amount, so it definitely was some kind of calculation glitch.

Thanks for the tips! You know, I did receive a year-end bonus of around $2,000 that was taxed differently than my regular paychecks. Could that be part of the issue? Also, I have a high-yield savings account that earned about $800 in interest last year.

Yes, both of those things definitely contributed to your situation! Bonuses are typically withheld at a flat 22% supplemental rate, which might not be enough if you're in a higher tax bracket. And the $800 in interest income has no withholding at all, so you'll owe taxes on that amount when you file. For next year, you have two options to avoid owing: increase your regular withholding by submitting a new W-4 with additional withholding on line 4(c), or make estimated quarterly tax payments for your interest income. For someone in your situation, adding about $30-40 in additional withholding per paycheck would likely cover these extra income sources.

every time i use that irs withholding calculator thing i get different results lol. one time it said i should get an extra $50 taken out each check, then the next time it said i should get like $20 back each check. makes no sense

Can you still share access with your accountant in Quicken? That's one of the main features I use in QBO.

There's no direct accountant access like QBO offers. What I do instead is export tax reports as PDFs or Excel files and share those with my accountant quarterly. It's a bit more manual, but it works fine since my business is pretty straightforward. My accountant actually prefers getting my organized spreadsheets rather than digging through QBO themselves. But if your accountant is actively working in your books throughout the year, this might be a limitation for you.

I tried Wave but found the reporting really limited compared to QBO. Also had some issues with bank connections frequently breaking. It's decent for very basic needs though.

That's fair. I've had occasional bank connection issues too, but for a free option it's been reliable enough. The reporting has gotten better in recent updates, but definitely still not as comprehensive as QBO. For my small photography business it hits the sweet spot of "good enough" without any monthly fees.

Thanks for bringing this up! I'm in Arizona - do you know if there are any specific state rules I should look into? I've maintained all my utilities and have been paying someone to check on the house monthly and do basic maintenance.

Arizona is actually pretty reasonable with their rules from what I know. The key is that you've maintained the utilities and have someone checking on the place - that shows intention to return and ongoing maintenance of the property as a residence. Check with the Arizona Department of Revenue to be sure, but they generally follow federal guidelines for primary residence. The fact that you've been paying for maintenance is a strong indicator that you haven't abandoned the property. Just make sure you have documentation of those payments for the maintenance person as additional proof if needed.

I went through an audit in 2022 for my 2020 taxes that included questions about my primary residence status. They asked for: - Voter registration - Driver's license - Where my vehicles were registered - Bank statements showing my address - Tax returns from previous years - Utility bills - Homeowners insurance They never asked for proof I physically occupied the house for X days. It was all about where my legal ties were established.

That's exactly what I'm worried about! Did your accountant give you any pushback when you showed up with your own 8949 already done? And did you tell them ahead of time or just show up with the completed forms?

My accountant was actually relieved when I showed up with the 8949 already completed. I did let her know ahead of time that I was going to handle the crypto portion myself so she wouldn't duplicate the work. She initially was concerned about the accuracy but after reviewing what I provided, she was comfortable using it. We confirmed I was using FIFO (First In, First Out) which is what she had been using all along. The key was making sure I gave her not just the summary figures but the detailed transaction listing so she could verify the work if needed. She ended up charging me her standard rate for the rest of my return without the crypto upcharge.

That's actually a terrible idea for most people. Creating an LLC doesn't change how crypto is taxed - it's reported as pass-through income on your personal return anyway unless you elect corporate taxation. Plus you'd have all the extra compliance costs of maintaining a business entity, separate accounts, etc. Would likely cost MORE in the long run.

Thanks for the clarification! I figured it might be too good to be true. Seems like using specialized crypto tax software and then providing the completed forms to my accountant is the better approach based on all the advice here.