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Has anyone had issues with FreeTaxUSA not matching the total losses reported by their broker? I entered everything exactly as shown on my 1099-B but my total loss is showing up different in FreeTaxUSA by about $340.
Check if you entered all the wash sales correctly. I had a similar issue and realized I missed marking some transactions as wash sales. Also, make sure you're entering the correct adjustment code if your broker provided one (like "W" for wash sale or "B" for basis reported to IRS). Those small details can cause discrepancies.
Also make sure you included any transaction fees or commissions in your basis. Some brokers include these in the reported basis on the 1099-B, but others list them separately. FreeTaxUSA has fields for adding these to your basis if needed.
For anyone still struggling with this, I recorded a quick walkthrough of how to enter stock transactions in FreeTaxUSA: 1. Go to the Federal section 2. Click on Income 3. Scroll down to "Investments" 4. Select "Stocks, Bonds, etc. (Schedule D and Form 8949)" 5. Choose the correct Form 8949 type (usually Box A or B for most brokerage accounts) 6. Enter each transaction individually For meme stock losses specifically, make sure you're tracking your basis correctly. If you bought in multiple batches at different prices, each purchase needs to be tracked separately. Good luck to everyone dealing with their losing meme stocks! At least the tax deduction takes some of the sting out...
Another important thing to understand about 1099-K forms is how they differ from 1099-NEC and 1099-MISC forms. They all report income but in different ways: - 1099-K: From payment processors for transactions over $600 - 1099-NEC: From clients who paid you directly for freelance/contract work over $600 - 1099-MISC: For other income like rent, prizes, etc. You might get multiple forms in the same year depending on how you get paid! Just be careful not to double-count income if you get both a 1099-NEC from a client and a 1099-K from the payment processor they used.
This is so confusing! So if my client pays me through PayPal, and it's over $600, would I get both a 1099-NEC from the client AND a 1099-K from PayPal for the same money? How do I avoid reporting the same income twice?
Good question! It depends on how sophisticated your client is with tax reporting. Technically, if they pay you through PayPal, the payment processor (PayPal) should issue the 1099-K, and the client should not issue a 1099-NEC for those same payments. However, many clients don't understand this distinction and might issue a 1099-NEC anyway. If you receive both for the same income, you should still only report the income once on your tax return. Keep detailed records showing they're duplicate reports of the same earnings. You can include a note with your tax return explaining the situation. The important thing is that your reported income matches your bank deposits to avoid audit flags.
Don't forget that expenses can offset your 1099-K income! I freaked out last year when I got a 1099-K showing $12,000 from my Etsy shop, but after deducting costs of materials, shipping, fees, etc., my actual taxable profit was only about $3,800. Make sure you track ALL business expenses related to whatever generated that 1099-K income. Even things like a portion of your cell phone bill or internet if you use them for business. I use a simple spreadsheet to track everything.
What about mileage? I do food delivery and got a 1099-K from the app. Can I deduct all the miles I drive while working?
I'm a renter in California too! Just wanted to add that while there's no specific "renter's tax," you might want to consider if you work from home at all. If you use part of your rental exclusively for work (like a home office), you might be eligible for the home office deduction. But be careful - this is only for self-employed people or certain types of employees with specific situations. Also, keep track of any renter's insurance you pay - in some states that could be deductible if you itemize!
I'm confused about the home office deduction. I've been working fully remote since 2021 but my employer doesn't require it. Can I still claim my spare bedroom that I use as an office?
Unfortunately, if you're a W-2 employee (even if fully remote), the home office deduction typically isn't available to you anymore. This was suspended by the Tax Cuts and Jobs Act through 2025 for employees. The home office deduction is generally only available if you're self-employed or an independent contractor. If you have a side gig that you run from home in addition to your regular job, you might be able to claim the deduction for that portion of your work, but not for your primary employment.
Has anyone heard about the new California Rental Registry program? I got a letter saying I need to report my rental information to the state. Is this legit or some kind of scam? Wondering if this is related to taxes in some way.
One thing nobody's mentioned yet - consider Wyoming if privacy is important to you. Delaware requires more disclosure of ownership information than Wyoming does, which might be relevant depending on your reasons for setting up a US LLC. For my digital marketing business, I went with Wyoming because: 1. No state income tax 2. Low annual fees 3. Strong privacy protections 4. No requirement to list members in public filings The 30% federal withholding only applies to certain types of income. For my consulting services to US clients, I've been able to reduce withholding through the tax treaty with my country.
How does the privacy actually help though? Don't you still have to disclose ownership to the IRS and on bank account applications?
You're right that privacy doesn't extend to the IRS or banks - those disclosures are mandatory for tax compliance and anti-money laundering regulations. The privacy benefit is more about public records. In Wyoming, your name doesn't appear in the publicly searchable business registry, while Delaware requires more disclosure in their public filings. This can be important if you're concerned about competitors easily connecting you to your business, or if you have privacy concerns about having your name publicly linked to your business activities. Some of my clients prefer not knowing my other business relationships, and Wyoming's privacy helps maintain those boundaries.
Does anyone know if we need to file Form 5472 as a foreign-owned single-member LLC in Wyoming? I've been getting conflicting information. Some say it's required even for disregarded entities, others say it's only if you elect corporate taxation.
Yes, you absolutely must file Form 5472 if you're a foreign-owned single-member LLC, regardless of which state you're in or your tax election status. This requirement was added in 2017 and it's a big deal - the penalty for not filing is $25,000! Even if your LLC is a "disregarded entity" for tax purposes, it's treated as a corporation SOLELY for the purpose of Form 5472 filing requirements. This catches a lot of foreign owners by surprise.
Mohammed Khan
One thing nobody has mentioned yet - make sure you have your Individual Taxpayer Identification Number (ITIN) before filing. As a UK citizen without a US Social Security Number, you'll need an ITIN to file any US tax forms. Getting an ITIN can be its own whole process and might explain part of the fee the accountants quoted you. You need to either apply with your tax return (which delays processing) or go through a Certified Acceptance Agent who can verify your documents.
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Emily Parker
ā¢Oh wow I didn't even consider this. Do you know if that's something I'd have to do in person or can it be handled remotely? I'm based in Manchester so getting to a US embassy isn't super convenient.
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Mohammed Khan
ā¢You can handle it remotely! There are two main approaches: You can submit Form W-7 (ITIN application) along with your tax return and certified copies of your identification documents (typically your passport). This can be done by mail, but it means your refund will be delayed until your ITIN is processed. Alternatively, there are Certified Acceptance Agents (CAAs) in the UK who can verify your identity documents in person so you don't have to send original documents or certified copies. Many accounting firms that handle US tax matters are also CAAs, which might be another reason for the fees you were quoted.
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Gavin King
Just wanted to add my UK perspective - I had a similar issue with dividend withholding on US stocks (should have been 15% under the treaty but they took 30%). I used a service called Taxback that specializes in these situations, cost me about £400 all in. Might be worth checking them out as another option.
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Nathan Kim
ā¢How long did it take to get your refund? I'm wondering if these specialized services actually process things faster than just hiring a regular accountant.
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