Thank you for mentioning this! I just checked the 1099-MISC more carefully and they actually did withhold some tax (about $405). So when I file the 1040-NR with Schedule NEC, do I just list that amount as already paid? Is there a specific line for this on the form?

Yes, you'll report the income on Schedule NEC, and then on Form 1040-NR, there's a line for "Federal income tax withheld" (typically line 25c or similar depending on the tax year). This is where you'll enter the $405 that was withheld. This is actually good news for two reasons: First, it shows the company properly classified you as a foreign person. Second, if you qualify for a lower tax rate under a treaty, you might get some of that withholding refunded back to you. Make sure you attach a copy of your 1099-MISC showing the withholding when you file your return. And remember that you'll likely need Form 8833 to claim any treaty benefits if you're eligible for a rate lower than 30%.

I tried TurboTax for my 1040-NR last year and it was a disaster. They don't really support all the international forms properly. I ended up using Sprintax which is specifically designed for nonresident returns. It handled Schedule NEC and treaty claims much better.

Would this approach work in TurboTax too? I'm having almost the identical issue but with TT and a car my grandpa gave me that I donated to a local charity.

Yes, the approach works in TurboTax too. The key is the sequence of entering information. TurboTax tends to make assumptions if you immediately identify something as a gift. Enter the donation details first, then go back to modify the acquisition information. For TurboTax specifically, after entering the 1098-C information, look for the "Asset Information" section where you can edit the basis details. Enter what your grandfather originally paid for the car (estimate if needed) and when he purchased it originally. This establishes a proper basis instead of the $0 that TurboTax might default to.

That's not quite right. The basis absolutely matters with donated property, even vehicles. The deduction is limited to the LESSER of your basis or the gross proceeds reported on the 1098-C. So if your basis is $0 (which can happen with fully depreciated gifted property), your deduction would also be $0, even if the charity sold it for more.

I stand corrected! You're right about the "lesser of" rule. I checked Publication 526 and it does specify that for vehicle donations, your deduction is limited to the smaller of your basis or the gross proceeds from the charity's sale. This explains why the software is asking about the gift - it's trying to determine the basis. If the original owner had already fully depreciated the car (common for older vehicles), then the basis might indeed be $0, which would limit the deduction to $0 regardless of sale proceeds.

H&R Block's truly free version doesn't support Schedule C or self-employment income. You'd need their Self-Employed version which runs about $85 for federal filing plus another $37 per state. I switched from them to FreeTaxUSA last year and saved a ton of money. H&R Block isn't terrible, but they're almost as expensive as TurboTax for self-employment stuff.

Thanks for the info! That's disappointing but good to know before I waste time starting with them. Seems like FreeTaxUSA is the winner for most people in this thread.

I've thought about going the direct form route, but I'm a bit intimidated by figuring out depreciation schedules on my own. Did you find good resources for learning how to do that part correctly? I'm comfortable with the general Schedule C stuff but some of the more technical aspects make me nervous about doing it without software guidance.

I found Publication 946 from the IRS really helpful - it explains all the depreciation rules. There are also some free online depreciation calculators that can help you determine the right amounts. I created a spreadsheet that I update each year for tracking my business assets and depreciation. The first year was definitely the hardest, but now I just update my spreadsheet annually. I actually feel more confident now because I understand exactly what's happening rather than trusting software to make the right choices for me. If you're comfortable with spreadsheets, it's totally doable with a bit of research.

Wait, could I still qualify for stimulus money from 2021? I thought those were all sent out automatically. I definitely never received anything back then.

Yes, you might still be able to claim the Recovery Rebate Credit on your 2021 return if you didn't receive the stimulus payments and were eligible! The third stimulus payment (Economic Impact Payment) of up to $1,400 was issued in 2021, and many people who were eligible didn't receive it for various reasons. If you file your 2021 return now, you can claim this as the Recovery Rebate Credit. There's a worksheet in the 2021 Form 1040 instructions to help you determine if you qualify and how much you can claim. This is exactly why filing a return even with zero income can be beneficial - you might have money waiting for you!

Also remember to sign and date the return! IRS will reject unsigned returns and that just delays everything further. Ask me how I know 😩

Is the $600 limit per person or per return? Like if I'm married filing jointly, do we get $1,200 total or still just $600?

The limit is per tax return for single filers, but for married filing jointly, it's per person. So for 2021 (which had the $300 per person limit), a married couple filing jointly could claim up to $600 total on line 10-B if taking the standard deduction. The exact limits have changed over the years as this was a temporary provision, so always check the current year's instructions. The most important thing is that this special deduction on line 10-B is ONLY for people taking the standard deduction. If you itemize, you'll include all charitable contributions on Schedule A instead.

TurboTax is correct - you can't do both. It's either all on Schedule A (if you're itemizing) OR up to $600 on line 10-B (if taking the standard deduction). Your accountant friend might be confusing this with some other deduction rules.