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Lots of good advice here but I wanted to add that if you do your own taxes, you can also deduct things like tax publications, tax software, and even a portion of your computer expenses if you use it to prepare your Schedule C. My accountant showed me how to properly document this stuff last year and it added up to a decent deduction.
Does this apply to online tax courses too? I took a short course specifically to learn about self-employment taxes for my Etsy shop.
Yes, courses specifically focused on business taxes for your self-employment activities would generally be deductible as a business expense. A tax course that teaches you how to handle Etsy shop taxes would be considered an ordinary and necessary business expense since it directly relates to your business operations. Just make sure to keep good documentation of the course, including the syllabus or description showing it was focused on business tax topics relevant to your specific situation. Also save your receipt or proof of payment.
I'm in exactly the same boat - regular job plus Uber driving. My accountant charged me $350 and said I could deduct 40% of her fee on Schedule C. She said she bases this on the extra forms and time required for the self-employment portion. Been doing it this way for 3 years with no issues.
Your accountant gives you a specific percentage? Mine just tells me "some of it is deductible" without any clear guidance. Maybe I need a new accountant lol.
If your tax situation is fairly straightforward (just W-2 income, standard filing status, etc.), even with the ITIN application, I'd say try filing yourself with software first. Most software options cost between $50-100 for your situation, while a tax professional will likely charge $250-400 minimum for a return with an ITIN application. One important thing to note: Even with an ITIN, there are limitations on certain tax credits. For example, children with ITINs don't qualify for the refundable portion of the Child Tax Credit. The software should explain this, but it's good to be aware.
Thanks for this guidance. Do you happen to know which tax software handles ITIN applications most efficiently? And approximately how long should we expect for the ITIN processing?
All the major tax software programs (TurboTax, H&R Block, TaxSlayer) can handle ITIN applications equally well. They each have guided interviews that walk you through the W-7 form and explain what supporting documents you need. As for processing time, unfortunately, it's quite lengthy right now. Initial ITIN applications are taking about 7-11 weeks according to the IRS, but in practice, it can sometimes take 3-4 months, especially during peak tax season. The good news is that you can still file your return while the ITIN application is processing - you just won't receive certain credits until the ITIN is issued.
One important thing to consider with work visas - make sure your tax software supports your specific visa type. Some of the free options don't handle all visa scenarios correctly. I'm on an H1B and had issues with one of the free services last year misinterpreting my residency status for tax purposes.
Just to add some additional clarity here - filing twice is different from filing an amended return. If you file a complete second return (like going to the second tax website and starting from scratch), the IRS computers will flag it as a duplicate return which can trigger correspondence or even an audit.
Thank you for explaining that! So to be clear, my only option would be filing an amended return (1040-X) if I think I missed something? And I'd need to be specific about exactly what I'm changing from my original return?
Yes, that's exactly right. You need to file Form 1040-X and be very specific about what you're changing and why. The form has columns for original amounts, changes, and corrected amounts. I'd recommend figuring out exactly what deductions or credits you might have missed before filing the amendment. There must be a specific reason your coworker got more back - different tax situations lead to different outcomes.
Has anyone used different tax software and gotten drastically different results? I've always used H&R Block but wondering if I should try something else next year.
Hey! American-turned-Aussie here who went through this exact process 3 years ago for my YouTube channel. Some quick tips: 1) For business activity codes, use 57000 for Internet Publishing or 55700 for Motion Picture and Video Activities if you're mostly doing video content. 2) KEEP A SEPARATE BANK ACCOUNT for all business transactions once you get your ABN! Biggest mistake I made was mixing personal and business finances. 3) If you're planning to work with companies outside Australia, make sure you understand how GST works for international services (hint: generally not charged for services to overseas clients). 4) You'll still need to file US taxes with the IRS using form 2555 for Foreign Earned Income Exclusion. This lets you exclude up to ~$120k of foreign income from US taxes. 5) Set aside 30-35% of your income for taxes if you're earning decent money. The ATO doesn't play around with quarterly tax installments.
Another important thing: figure out your tax deductions right away! As a content creator, you can claim: - Portion of rent/mortgage for home office - Internet (business %) - Phone (business %) - Camera gear - Lighting - Editing software - Computer/tech - Website costs - Subscriptions for research - Music licenses - Stock photos/videos - Travel to filming locations Start tracking EVERYTHING from day 1. I use an app to track all my expenses and keep digital copies of receipts. The ATO requires you to keep records for 5 years. And dont forget income protection insurance! Its tax deductible and super important if youre a sole trader since you dont get sick leave or workers comp.
Sean O'Connor
As someone with severe anxiety myself, getting a dedicated accountant changed my life. Not H&R Block, not a random CPA, but someone I actually connected with who understood my anxiety. I interview several until I found someone who didn't make me feel stupid for my questions.
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Zara Ahmed
ā¢How did you find your accountant? Did you just google local CPAs or was there a better way to find someone who specializes in working with anxious clients?
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Luca Conti
Have you considered having a friend or family member sit with you while you use one of the DIY software options? Sometimes just having moral support helps with the anxiety, and most tax software is actually pretty straightforward if you take it one step at a time.
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