Thanks for mentioning FreeTaxUSA! I've heard good things but haven't personally tried it. Does it handle cryptocurrency trading well? That's an area where I've seen some of the free options struggle.

FreeTaxUSA actually does handle crypto pretty well now. They added a much more streamlined section for it last year. It asks if you have a summary report from your exchange (like Coinbase) that you can import, or you can enter transactions manually. For mining or staking income, they have specific sections for those too, which categorize everything correctly for tax purposes. Definitely better than when I tried using TurboTax's free version for crypto a few years ago and got hit with an upgrade prompt.

For your situation with W-2 plus a single Airbnb rental, Cash App Taxes should work great - they support Schedule E for rental income at no charge. Just make sure you have all your rental income and expense records organized beforehand. FreeTaxUSA (mentioned in another comment) would also work - federal filing is free with rental income, though you'd pay $15 for state filing. The one caveat is if your rental situation is very complex (like multiple properties or partial business use), then you might still want professional help. But for a single Airbnb room, the free options should be perfectly adequate!

Thank you! That will save me a ton of money. I only have the one room I rent out so it's pretty straightforward. I'll definitely try Cash App Taxes this year instead of paying TurboTax's ridiculous fees.

But that's exactly the concern, right? Without extremely tight definitions, people find ways to game the system. I mean, tipping has expanded to so many industries now - you get tip prompts everywhere from coffee shops to retail stores. Where would they draw the line?

That's a fair point. The expansion of tipping culture does complicate things. I suspect any actual legislation would need to establish criteria like: the worker receives a reduced minimum wage under tip credit rules, the industry has a historical practice of tipping, and the tips are contemporaneous with service rather than contractually required. The IRS and Treasury would likely issue regulations clarifying these boundaries. Similar to how they've handled other tax provisions, they'd establish factors to determine legitimate tips versus disguised regular compensation. The challenge would be enforcement - they're already understaffed for existing tax issues.

I work in payroll software development, and yes, it would be a significant change. We'd need to create new income classifications, update tax withholding algorithms, and modify all the reporting. The IRS would also need new forms. It's not impossible, but would require substantial systems updates.

But don't you need to be really careful with home office deductions? I heard they're a big audit flag. Is it really worth claiming internet expenses if it might trigger extra scrutiny?

The "home office deduction is an audit flag" concern is mostly outdated advice. The IRS has simplified the home office deduction in recent years with the "simplified method" that lets you deduct $5 per square foot (up to 300 square feet) without extensive documentation. That said, you do need to be truthful - the space must be used regularly and exclusively for business. So if you're printing shipping labels at your kitchen table where you also eat dinner, that wouldn't qualify. But a dedicated room or space used only for your Etsy business absolutely qualifies. Internet expenses can be partially deducted based on business use percentage even if you don't take the home office deduction.

Does anyone know if the trips have to be dedicated post office trips only? Like if I drop packages off on my way to pick up my kids from school, can I still count that mileage?

Do they have good support if you get stuck on something? I'm worried about messing something up and getting audited.

Their support is decent but not as comprehensive as TurboTax's. They have email support that usually responds within a day and a good knowledge base with articles explaining most common tax situations. The audit risk is pretty minimal if you're just reporting things accurately. The software does have accuracy checks built in that will flag anything that looks unusual or might trigger an audit. I was nervous my first year too, but it really walks you through everything step by step. If your tax situation is fairly straightforward (W-2 income, mortgage, charitable donations), you should be fine. The peace of mind might be worth paying a bit more for TurboTax if you're really worried, but I found FreeTaxUSA perfectly adequate.

You can definitely still find an accountant this time of year, but many good ones are already at full capacity. I'd start calling around asap. My sister just switched in February and found someone, but she had to call 8 different places before finding one accepting new clients.

Terrible advice. If you wait for a CP2000, they'll charge you interest from the date the tax was due, and possibly penalties too. Plus it could affect your credit score. Always better to fix your own mistakes proactively.

You're right, that was bad advice. I wasn't thinking about the interest and penalties. Thanks for the correction. I've always filed amended returns immediately when I discover errors and it's definitely the better approach. The peace of mind alone is worth it.

Actually, that's outdated info! The IRS now allows e-filing of Form 1040-X for tax years 2019 and later through most tax software. Made the process way faster when I had to amend last year.