This has been such a helpful thread! I'm definitely convinced to try TurboTax Desktop this year after reading everyone's experiences. The cost savings alone make it worth switching, especially since it sounds like the functionality is essentially the same. One question I haven't seen asked yet - for those who switched from online to desktop, did you notice any difference in customer support? Like if you run into issues or have questions while preparing your return, is the help just as accessible with the desktop version? I've had to contact TurboTax support a couple times in previous years through the online version and want to make sure I won't be left hanging if I need help with the desktop software. Also, really appreciate the tips about backing up the tax files and being able to install on multiple computers. That flexibility is actually another point in favor of desktop that I hadn't considered!

I've been going back and forth on this exact decision! Really appreciate all the detailed comparisons here. One thing that's pushing me toward desktop is that I tend to overthink my taxes and like to go back and double-check things multiple times before filing. Having everything saved locally and being able to work offline sounds perfect for my workflow. Quick follow-up question - does anyone know if the desktop version still supports importing photos of tax documents like W-2s and 1099s? I know the online version has that feature where you can snap a picture with your phone, but I'm not sure if that carries over to desktop. That's one convenience feature I'd really miss if it's not available. Also, for what it's worth, I called TurboTax yesterday to ask about pricing and the rep confirmed that desktop versions often go on sale at major retailers, sometimes 20-30% off the regular price. Might be worth shopping around rather than buying directly from TurboTax if you decide to go the desktop route!

One thing nobody has mentioned - if you're excluding Medicaid waiver payments from your income, you might need to adjust your Earned Income Credit calculation if you were claiming that. Since the payments don't count as earned income when they're excluded, it could affect your EIC amount. Something to keep in mind if you're filing amended returns.

This is such a helpful thread! I'm in a similar situation but with a twist - I provide care for my elderly father who receives Medicaid waiver payments, but he doesn't live with me full-time. He stays at my house about 4-5 days per week and goes to my sister's the other days. Does anyone know if the "living in your home" requirement from Notice 2014-7 means they have to be there 100% of the time? Or would this split arrangement still qualify for the exemption since my home is his primary residence? I've been reporting these payments as taxable income but I'm wondering if I've been doing it wrong. Also want to echo what others have said about the big tax prep chains - went to two different locations and got completely different advice from each one. Definitely going to look for a CPA who specializes in this area like @PrinceJoe suggested.

As someone who went through this exact panic last year, I totally understand the stress! The confusion usually comes from people mixing up different scenarios. Here's what actually happens with your $63k 1099-NEC income: You'll pay approximately: - Self-employment tax: ~15.3% on about 92.35% of your income = roughly $8,900 - Federal income tax: After deductions (standard deduction, half of SE tax, possibly QBI deduction), you're looking at maybe 10-15% effective rate on what's left = roughly $4,000-6,000 - Don't forget state taxes if your state has them! So your total effective federal tax rate will likely be around 20-25%, not 30%. The people saying 30% are probably including state taxes or being overly conservative. My advice: Start making quarterly estimated payments ASAP for next year. I use the "safe harbor" rule - pay 100% of last year's total tax liability divided by 4, and you won't get penalties even if you end up owing more. It's better to slightly overpay than deal with underpayment penalties. Also, track EVERY business expense from now on. Home office, internet, phone, mileage, supplies - it all adds up and reduces your taxable income significantly.

This is such a helpful thread! I'm in a similar boat - first year with significant 1099-NEC income and totally overwhelmed by the tax implications. One thing I learned the hard way is to open a separate savings account just for taxes. I set up an automatic transfer of 25% of every payment I receive to go straight into that account. It's helped me avoid the panic of "oh no, where am I going to find $15k for taxes??" Also, if you're really behind on setting money aside, consider opening a Solo 401k or SEP-IRA before year end. You can contribute a significant amount and reduce your current year tax burden. For 2025, you might be able to contribute up to $23,000 to a Solo 401k (plus potential employer contributions as the business owner), which would lower your taxable income substantially. The quarterly payment thing is real though - don't wait until next April to deal with this. Even if you can't pay the full amount you'll owe, getting something in quarterly will help minimize penalties.

I went through this exact same situation last year and it was such a headache at first! The terminology is definitely confusing - "unredacted" and "unmasked" mean the same thing in this context. You need transcripts that show all the details without any information blocked out for security purposes. Here's what I learned: The fastest way is actually to visit an IRS Taxpayer Assistance Center if you have one nearby. You can schedule an appointment online at irs.gov/help/contact-your-local-irs-office, and they'll print your unmasked Wage and Income Transcripts right there during your visit. This saved me weeks compared to waiting for mail delivery. If you can't get to an office, calling 800-908-9946 early in the morning (like 7 AM Eastern) gives you the best chance of getting through. Just be prepared to wait on hold and have your SSN and previous tax info ready for identity verification. One thing to keep in mind - these transcripts will show all income reported to the IRS under your SSN, but they won't have information about deductions you might be eligible for. So while they're perfect for ensuring you report all your income accurately, you might still want to work with a tax professional to make sure you're not missing out on deductions that could reduce what you owe for those back years. The penalties do add up over time, so getting this sorted sooner rather than later is definitely the right move. Good luck!

I've been through this exact process twice now, and I want to add a few details that might help you avoid some pitfalls I ran into. First, when requesting transcripts (whether by phone, online, or in person), make sure you're asking for "Wage and Income Transcripts" for the specific tax years you need - NOT "Return Transcripts" or "Account Transcripts." The Wage and Income version shows all the income that third parties reported to the IRS under your SSN, which is exactly what you need to reconstruct your tax returns. Second, if you end up calling the IRS, write down the confirmation number they give you when you request the transcripts. When I called the first time, I forgot to get this number, and when my transcripts didn't arrive after 3 weeks, I had no way to track the request. I had to start the whole process over again. Third, be prepared that even unmasked transcripts might not capture everything. For example, if you had any freelance income where clients didn't issue 1099s, or cash tips that weren't fully reported, those won't show up on the transcripts. The transcripts are only as complete as what was actually reported to the IRS. Finally, don't panic too much about the penalties. Yes, they do accumulate, but the IRS has various penalty relief programs, especially for first-time filers of back returns. A tax professional can help you explore options like first-time penalty abatement when you file. Good luck getting this sorted out! The hardest part is really just getting those initial transcripts - once you have those, filing the actual returns becomes much more straightforward.

OMG i literally just had this exact problem!! my state refund was $0 even tho i paid like $500 in state taxes. turns out i had checked the wrong box on my state return about some local tax thing. i redid my return and suddenly i was getting $180 back! maybe double check all ur answers especially if u used different tax software from last year?

A $0 state refund is actually pretty common and usually means your withholding was spot-on with what you actually owed. Think of it this way - if your total state tax liability was $425 and your employer withheld exactly $425 throughout the year, you don't get money back because you already paid the right amount. To figure out what happened, look at your state tax return and compare two numbers: your "total tax" (what you actually owed) and your "total withholding/payments" (what was taken from your paychecks). If they're nearly equal, that's why you got $0 back. The fact that you got a small refund last year could mean either your withholding was slightly higher that year, or you qualified for some state credit/deduction that you don't qualify for this year. Check if anything changed with credits like renter's credit, property tax credit, etc. Getting $0 back is actually better financially than getting a big refund - it means you didn't give the state an interest-free loan of your money all year!