Does Cash App Taxes handle self-employment income well? I have a small side business and have been using TurboTax Self-Employed, but it's so expensive.

Yes, Cash App Taxes handles self-employment income quite well for straightforward situations. It has all the Schedule C forms and walks you through business deductions, home office calculations, and quarterly estimated payments. Where it might fall short is if you have very complex business situations like inventory management, multiple businesses, or specialized industry deductions. For a side gig bringing in $4k like the original poster mentioned, it would be perfectly fine. I have a photography side business that makes about $12k annually and it works great for me.

Do you think a CPA is worth it for simpler returns? I just have a W-2 job and a mortgage, no complicated stuff.

I used a CPA last year and she missed a huge education credit I was eligible for. When I pointed it out she acted like I was being difficult. Going back to doing it myself this year.

That's a really good suggestion. I do still have the same bank account I used back then, so I'll call them tomorrow and see if they can provide statements from that period. I think I used PayPal for most of my eBay transactions too so I'll definitely check there. Did you just manually go through each statement and categorize everything? How did you handle things like inventory where you might have purchased it in a different year than you sold it?

I did go through each statement manually and created a spreadsheet to categorize everything. It was time-consuming but gave me solid documentation. For inventory timing issues, I made my best estimate of which inventory was sold in which year based on my sales patterns. Since you're doing this retroactively, what worked for me was calculating my overall profit margin across all sales and then applying that same margin to each year's known revenue. For example, if I determined I generally made 40% profit after all costs, I would apply that to each year's total sales figure. The IRS is generally reasonable about reconstructed records as long as your approach is consistent and logical.

Not OP but sometimes people switch tax preparers or maybe they used software that year instead of a professional. I've been in a similar situation where I used TurboTax one year and then couldn't access the account years later because I had changed email addresses and couldn't verify my identity to recover the account.

What about audit protection? TurboTax always scares me into buying their audit defense. Does FreeTaxUSA offer something similar or is it not really necessary?

FreeTaxUSA does offer audit assistance (they call it "Deluxe") for around $7-8 which is MUCH cheaper than TurboTax's audit defense. It provides priority support and help with audit-related questions if you get audited. Honestly though, for simple returns, your audit risk is extremely low. The IRS mostly targets unusual deductions, self-employment with weird numbers, or very high income returns. If you're just filing W-2 income and standard deductions, the audit risk is tiny. I personally don't buy audit protection anymore for basic returns, but the FreeTaxUSA version is cheap enough if it gives you peace of mind.

Did you notice any difference in refund amount between what you got with TurboTax vs FreetaxUSA? I always worry cheaper software might miss deductions or something.

Thanks for the detailed breakdown on the depreciation schedule! I definitely had the wrong percentages in mind. Do these figures account for bonus depreciation too or is that something separate?

The percentages I listed are just for regular MACRS depreciation without any bonus depreciation factored in. Bonus depreciation is separate and would actually allow you to deduct a significant portion upfront, similar to Section 179 but with different rules. For 2024, bonus depreciation is at 60% (it's been phasing down from 100%). So you could potentially deduct 60% of the cost in year 1 through bonus depreciation, and then apply the regular MACRS percentages to the remaining 40%. This is another option if Section 179 doesn't work for some reason.

There's no minimum cost to use Section 179, but your business needs to have enough income to offset the deduction. For something small like $800, you can definitely use Section 179 to write it off completely in year 1. Honestly, for that amount, even if you depreciated it over 5 years, the difference isn't huge, but might as well take the full deduction now if you can.

Thanks for bringing that up - I didn't even think about documentation for an audit! For the CareCredit transaction, I have the initial statement showing the full payment to the provider. For the in-house financing, I have a payment contract and receipts for each payment. Should I also be getting something from my doctor confirming the medical necessity? These were both for necessary procedures, not elective or cosmetic.

Yes, you should get documentation from your doctor confirming these procedures were medically necessary. This could be in the form of a referral, prescription, or even a letter from your doctor stating the medical purpose. For large medical expenses like yours, having this documentation ready is especially important as they're more likely to trigger review. Make sure you keep all these records for at least seven years after filing, as the IRS can audit returns going back several years. It's much easier to gather this documentation now than trying to track it down years later if you do get audited.

Good point! Also worth noting that some states don't allow itemized deductions at all, or they handle them completely differently from federal. I'm in NJ and our state tax system is totally different from federal for medical expenses.