I haven't tried FreeTaxUSA yet! Does it have a good interface? My biggest frustration with some of the smaller tax services is that the UI feels like it was designed in 1997 lol.

The interface isn't as fancy as TurboTax or H&R Block, but it's definitely not from the 90s! It's clean and straightforward, just without all the animations and excessive hand-holding. Everything is organized logically and I actually find it faster to use than the big name services. They're especially good with 1099-NEC and other self-employment forms since you don't get routed into "upgrade now!" pages halfway through. Their help content is also surprisingly detailed if you get stuck on something.

I found a workaround last year! If you go through the IRS Free File portal instead of directly to the tax service website, some of them are required to give you the free version even with 1099-NEC forms. There's an income limit though.

Do you think it's better to use Section 179 or regular depreciation for something like a $3,000 computer? I've heard mixed advice about this.

It really depends on your overall business situation. If you're profitable this year and could use the deduction now, Section 179 gives you the immediate write-off which is great for cash flow. If you expect to make more money in future years, regular depreciation might make more sense to spread the deductions across years when you might be in a higher tax bracket. For a $3,000 computer, the difference might not be huge unless you're right on the edge of a tax bracket. I usually recommend taking the deduction now if your business can use it, since the time value of money means a deduction today is worth more than the same deduction spread over 5 years.

Unfortunately, no. You can only begin depreciation or take Section 179 when the equipment is "placed in service" - meaning it's in your possession and ready for use in your business. Paying a deposit doesn't count.

Thank you for this suggestion! We'll definitely try FreeTaxUSA as a comparison. When we put our info into TurboTax, we only got to the W-2 part before seeing the amount we owe. We haven't added any deductions yet, but I'm worried TurboTax will make us pay for upgrades to add things like student loan interest. Do you know if FreeTaxUSA lets you enter student loan interest and charitable donations without upgrading to a paid version?

FreeTaxUSA includes ALL federal tax forms and deductions in their free version, including student loan interest, charitable donations, investment income, self-employment, etc. The only thing you pay for is state filing ($15) or audit assistance if you want it. That's actually one of the biggest differences - TurboTax's "free" version is only free for very simple returns, then they charge for adding forms like student loan interest deductions. FreeTaxUSA doesn't do that bait-and-switch thing. I usually run my taxes through both just to double-check my results, and they've always matched within a few dollars.

Or stimulus payments! Some people think those were tax-free but they actually impact your return if you got them.

Is there an easy way to figure out how much to pay for those quarterly payments? Our situation involves some rental income on top of our regular jobs, and I think that might be why we keep owing so much.

For rental income, you'll want to estimate your annual rental profit (income minus expenses) and multiply by your tax bracket percentage. Then divide that amount into four equal payments. A simple approach is to take whatever you owed last year and divide by 4 - that's usually enough to avoid underpayment penalties under the "safe harbor" rule. The IRS only requires you to pay 90% of this year's taxes or 100% of last year's tax amount (110% if your income is over $150,000), whichever is smaller. If your rental situation is complex, you might want to consult with a tax professional for the first calculation, then you can handle the quarterly payments yourself going forward.

This is exactly right! The "don't give the government an interest-free loan" advice only makes sense if you're disciplined enough to actually invest that money instead. For many people, slightly overwithholding is a painless way to save.

Thanks for this suggestion! My dispute is actually for about $45,000 so this would apply to me. Do you know if filing this way still preserves all my rights if I later decide to get an attorney involved? And does the simplified procedure still allow the examiner to continue working on my case?

Yes, filing under the simplified procedure (S case) still preserves your rights. The main difference is that S cases have a more informal process and you can't appeal the decision beyond the Tax Court. But that's rarely an issue since most cases settle before trial anyway. And absolutely, the examiner can still continue working on your case even after you file. In fact, once you file the petition, your case gets assigned to an IRS attorney who will often work with your examiner to try to settle the case quickly rather than going to trial. Many people find that filing the petition actually speeds up resolution because it puts time pressure on the IRS to wrap things up.

And make sure to send it CERTIFIED mail with return receipt if you're mailing it! That way you have proof of when you sent it in case there's any question.