Does FreeTaxUSA handle all the same forms? I have some investment stuff and a rental property too.

Yes, FreeTaxUSA handles all the same forms as TurboTax including investment income and rental properties. I have both and had no issues. The interface isn't quite as polished but it does the exact same calculations. The only real difference I noticed is it doesn't import some forms automatically like TurboTax does, so you might need to enter some information manually. But considering the price difference, it's absolutely worth the few extra minutes of typing.

What apps do you recommend for tracking mileage? I always forget to log my trips.

Oh that's a really good point I hadn't considered. I don't think I have any official appraisal from when I converted it in 2013. Would old real estate listings of comparable properties from that time period work as evidence? Or tax assessments from the county?

Tax assessments can help, but they're often below market value. Comparable property listings from that time period would be better evidence. You could also check with local real estate agents who might have historical sales data for similar properties in your area from that time. Another approach is to work backward from current appraisals and adjust for average appreciation in your area. Some tax professionals can help you create a reasonable valuation model if you have current data and local real estate growth statistics. The key is building a reasonable case for the value if you're ever questioned. Document everything and keep all supporting evidence with your tax records.

That's a great point. In my state, they actually have different rules for how the depreciation recapture is taxed compared to the federal level. I ended up having to amend my state return because I initially just carried over the federal calculations.

Thanks for the heads up! I am the only owner of the LLC. Do I need to do anything special to make sure I'm being taxed as a sole proprietor? I don't think I filled out any additional forms after creating the LLC.

You're already set then! Single-member LLCs are automatically treated as "disregarded entities" for tax purposes, which means you'll report your business income and expenses on Schedule C of your personal tax return. No additional tax forms are needed to select this treatment - it's the default. You'll use your personal SSN for most tax purposes, though you should have an EIN (Employer Identification Number) for your LLC as well. This setup is the simplest for your situation and allows you to deduct all legitimate business expenses like your Fiverr payments directly against any income the business generates.

This is super important. I've been creating comics for years and the IRS did question my expenses once. What saved me was having a detailed log of hours worked, draft versions showing progress, and a marketing strategy document. Even though I wasn't profitable yet, I could show I was seriously trying to be.

I think my income might be too high for EIC since I made about $43k at my regular job plus around $12k from deliveries. But TurboTax did guide me through a bunch of expense questions like my phone, insulated bags, and even a portion of my car insurance. I hadn't thought about tracking those things during the year but was able to go back and estimate pretty closely.

Your combined income of $55k might still qualify you for some EIC depending on your filing status. For 2022, the income limit for a single parent with one child was around $43k, but for married filing jointly it was higher. Even if you don't qualify for EIC, those business expense deductions you entered likely made a huge difference! Remember that your taxable income from the delivery work is your gross earnings minus all those business expenses. So if you made $12k but had $5k in legitimate business expenses (including that substantial mileage deduction), you're only paying taxes on $7k of additional income. If you had excess withholding from your W-2 job, that could easily result in a refund.

This is really important! I made the same mistake. Got a refund my first year doing DoorDash because my W-2 job withholding covered everything. Next year I had a $3200 tax bill that completely blindsided me. I use the IRS estimated tax payment system now (Form 1040-ES) and make quarterly payments so I don't get hit with penalties or a huge bill at tax time.

Thanks for this explanation! I definitely have an outdated understanding of how withholding works now. I don't have any side income, but I did receive a small bonus this year that was probably underwitheld like you mentioned. So to fix this for next year, should I just submit a new W4 with some additional withholding amount in section 4(c)? How do I figure out how much extra to withhold?

Yes, submitting a new W4 with an additional amount in section 4(c) is exactly what you should do. To calculate the amount, take the tax you owed this year, divide by the number of pay periods remaining in the year, and enter that amount. For example, if you owed $1200 and get paid twice a month, you'd enter $50 per paycheck ($1200 ÷ 24). For a more precise calculation, use the IRS Tax Withholding Estimator on their website. It'll walk you through your specific situation and recommend the exact amount to put in section 4(c). Just make sure you have your most recent paystub and tax return handy when you use it.

YES! My company's HR actually sent out an email telling everyone to "update your allowances to 0 or 1" last month. I had to awkwardly explain to them that allowances haven't been a thing since 2019. They seemed genuinely surprised.