Thanks for mentioning this! Just checked my 1099-B and you're right - the cost basis is completely missing for two of the transactions. Do I need to contact my brokerage to get this corrected or can I just fill in the correct amounts on Form 8949?

You can fill in the correct cost basis directly on Form 8949 yourself - you don't need to wait for a corrected 1099-B. Just use code "B" in column (f) to indicate that you're reporting a cost basis different from what's on your 1099-B. Keep all your records showing the actual purchase price in case you're ever audited. Even a printout of your transaction history from your brokerage account can work as documentation. The IRS understands that cost basis issues are common, especially with older investments or when securities transfer between brokerages.

Free File Fillable Forms don't support amended returns (1040-X) unfortunately. I tried going that route last year. You either have to print and mail a paper amendment or use commercial software. Some tax software has free amendment options if you filed your original return with them, might be worth checking.

Does this education exclusion work if the bonds were originally purchased by my parents but in my name? I just cashed some to pay for my masters program.

Yes, it can work in your situation! What matters is who the owner of the bond is (whose name is on it) when it's redeemed, not who purchased it. If the bonds are in your name and you're using them for your qualified education expenses, you can claim the exclusion. Just make sure you're meeting all the requirements: the bonds must have been issued after 1989, you must be at least 24 years old when the bonds were issued, and the bonds must be redeemed in the same tax year you pay the education expenses. Also, your income needs to be below certain thresholds to get the full benefit. Form 8815 will walk you through all of this.

You can definitely set up an installment plan with the IRS using Form 9465. They're pretty reasonable about it as long as you file your return on time. I did this last year when I cashed out some old bonds. Just be aware there's a small setup fee and you'll pay interest on the unpaid balance.

This is so important! A friend of mine didn't file for 3 years because he was scared of penalties, only to discover the IRS owed him over $3000 in refunds! He almost missed the deadline to claim them too.

I did keep copies of everything and sent it certified mail, so I have tracking confirmation they received it. Thank god for that tip! How exactly do I go about requesting this first-time penalty abatement? Is that something I can do now or do I need to wait for their response to my Schedule C submission?

You'll want to wait until you get their response to your Schedule C submission, as that will have the updated amount they believe you owe, including any penalties. Once you receive that, you can call the IRS (or use a service to get through) and specifically request "first-time penalty abatement" if you qualify. To qualify, you generally need to have had no penalties in the past 3 tax years and have filed all required returns and paid (or arranged to pay) any tax due. If approved, they'll remove the failure-to-file and failure-to-pay penalties, which can sometimes be a substantial portion of what you owe. Just be sure to specifically use the phrase "first-time penalty abatement" when requesting it, as some representatives won't offer it unless you ask.

This is key advice. When I got my CP2000 for some freelance work, I initially only claimed the obvious expenses. After doing more research, I realized I could legitimately claim partial use of my vehicle, a portion of my utilities since I worked from home, and even some travel expenses for meetings with clients. Cut my tax bill by more than half.

This is super helpful! Quick question - for things like my iPad and Apple Pencil that I use for both personal stuff and illustration work, how do I figure out what percentage I can deduct? Is there a standard way to calculate that?

For mixed-use items like your iPad and Apple Pencil, you need to determine the percentage of business use based on time. If you use your iPad 80% for client work and 20% for personal stuff, you can deduct 80% of the cost. There's no standard calculation - it's based on your honest assessment, but you should be prepared to justify it if asked. I recommend keeping a log for a few weeks to track your usage patterns. Some artists I know set aside specific "business hours" for their devices to make this calculation cleaner. Just make sure you're being reasonable and truthful - claiming 100% business use for a device you also use for Netflix and games is asking for trouble!

This varies SO much by state! In my state (Washington), I had to get a business license even for occasional freelance illustration work and pay Business & Occupation tax instead of sales tax. It was a whole thing. Definitely check your specific state requirements.