I'm in Pennsylvania. I totally forgot about state taxes! Do different states have different thresholds for when you need to file?

Yes, Pennsylvania does tax unemployment benefits. Their filing threshold is lower than the federal one - you generally need to file a PA tax return if you have more than $33 in total taxable income. Pennsylvania has a flat income tax rate of 3.07%, so you'd potentially owe state tax on your unemployment benefits. There are some credits and deductions available that might reduce what you owe, but you'll definitely need to file a state return in addition to your federal return.

TurboTax isn't actually free a lot of times though. They make you upgrade to paid versions for certain forms. I'd recommend FreeTaxUSA instead - it's actually free for federal and only $15 for state.

I checked and I'm definitely showing a profit on Schedule C - about $24k after expenses. And I'm filing as head of household with two qualifying children (ages 5 and 8). All their info including SSNs is entered correctly. That's why I'm so puzzled about why TurboTax treats the income differently.

That's definitely strange then! With $24k profit on Schedule C filing as head of household with two young kids, you should absolutely qualify for both EITC and the Additional Child Tax Credit. Maybe try deleting that section completely and re-entering it from scratch? Sometimes TurboTax gets stuck with certain calculations. Another thing to check is if you've got any investment income. If you have more than $10,300 in investment income for 2024, that can disqualify you from EITC. Also double-check if you accidentally clicked something that indicates the income isn't subject to self-employment tax, which might mess up how TurboTax treats it for credit purposes.

Do you know if this applies to all tax software or just TurboTax? I'm using FreeTaxUSA and wondering if I'll have the same issue.

I had no idea about the Qualified Business Income deduction! Is that something I'd need to file additional forms for? I use TurboTax self-employed to file and I don't remember seeing that option last year.

Yes, you'll need Schedule C to report your business income and expenses, and then Form 8995 or 8995-A for the Qualified Business Income deduction specifically. TurboTax Self-Employed should walk you through this if you indicate you have self-employment income, but sometimes you need to really dig into the deductions section to make sure it's applied. Double-check that it's calculating this deduction for you - it should be up to 20% of your net business income depending on your total taxable income. It's definitely worth making sure you're getting this deduction since it can save you thousands!

That 60-30-10 rule is brilliant. I've been freelancing for 3 years and always scramble at tax time. Does that 30% usually cover your federal, state AND self-employment taxes? Or do you find you need more sometimes?

Can you explain more about this accountable plan thing? I've never heard of it and I'm currently paying my workers extra to cover their gas when they drive between job sites, which I know isn't ideal tax-wise.

An accountable plan is basically a formal arrangement where your business reimburses employees for business expenses without that reimbursement counting as taxable income to them. To qualify, you need three things: business connection (expenses must be job-related), adequate accounting (employees must provide documentation like receipts), and return of excess payments (employees must return any excess reimbursements). For your situation with gas between job sites, instead of paying extra taxable income, you could reimburse actual mileage at the IRS rate (currently 67 cents per mile for 2023). The employee doesn't pay tax on this reimbursement, and you still get the deduction. You'll need employees to track their mileage and submit documentation, but there are easy apps for this. Much better than grossing up wages to cover gas which creates additional payroll taxes for both you and the worker.

I use QuickBooks Payroll for my remodeling business with 7 employees. It's decent for basic payroll but struggles with complex construction-specific reporting. For certified payroll on government jobs, I ended up using an add-on called LCPtracker. The main benefit is how it ties directly to my accounting, but the reporting for construction specifically is mediocre.

Thanks for the insight on QuickBooks. Good to know about the limitations with construction reporting. Does it at least handle job costing well? I need to track labor costs per project really carefully.

Not OP but I used FreeTaxUSA for crypto last year. It doesn't connect directly to exchanges like some premium services, but you can either enter transactions manually or import a CSV file if your exchange allows exports in that format. If you have tons of transactions, you might want to use a crypto tax service like CoinTracker or Koinly first to generate the required tax forms, then enter the summary into FreeTaxUSA.

Do they save your info from year to year? That's the only thing keeping me with TurboTax right now - I don't want to re-enter everything from scratch next year.

Yes, they definitely save your information year to year! You can import your previous year's return which pulls in all your personal info, employment info, etc. They even keep track of things like depreciation schedules and capital loss carryovers. The transition is pretty seamless if you're switching from another service too - just have a PDF of last year's return handy and you can pull most of the important info from there.