Should I mention that I actually did try to file through a relative but they messed it up? My situation was similar - I was hospitalized for 2 months and asked my brother to handle my taxes, but he completely forgot until after the deadline.

Yes, definitely mention that you took reasonable steps by asking your relative to help. That shows you recognized your tax obligation and actively tried to meet it despite your hospitalization. Explain that you delegated this responsibility while you were unable to handle it yourself, which demonstrates your intent to comply. Make sure to emphasize that you made what you believed was a reasonable arrangement given your medical situation, but circumstances beyond your control still prevented timely filing. The IRS is generally understanding when you can show you made good faith efforts to comply despite serious limitations.

TurboTax has a feature that helps identify if you qualify for penalty abatement and gives you guidance on requesting it. I used it last year after missing a deadline due to a family emergency, and it made the process pretty straightforward.

14 Yes, it applies to most business equipment! I claimed it on my MacBook Pro and a high-end printer last year. Computer equipment, office furniture, machinery - all qualify as long as it's used more than 50% for business.

We don't have student loans but that's a really good point I hadn't even considered! Do you use an accountant to figure out all the deductions for your different income sources or do you DIY with software?

We used TurboSelf-Employed the first year which was okay but missed some deductions. Now we use an accountant who specializes in small businesses and it's been worth every penny. She found so many legitimate deductions we didn't know about, especially for my wife's freelance work. The accountant fee is about $450 but she saves us at least triple that amount. Plus she helps us with quarterly estimated payments which was a mess before we got professional help.

Yeah, and be careful with the simplified option vs. regular method for home office. Sometimes the simplified $5/sq ft (up to 300 sq ft) is easier but might give you less deduction than calculating actual expenses percentage.

Thanks for pointing this out! Yes, we are both claiming the credits separately based on our individual self-employment incomes. My wife's income is higher than mine, so her credits are calculating higher too. Do you know if we need any specific documentation to prove we were caring for our kids during those days? I'm worried about potential audit flags since this is making such a big difference in our taxes.

You should definitely keep documentation showing that your children's schools or care facilities were closed during the periods you're claiming. Things like emails from the school about closures, announcements from the daycare, or any formal communications about COVID-related shutdowns. Also maintain a calendar or log showing which days you had to reduce work hours to provide care. Note the days you would normally have worked but couldn't due to childcare responsibilities. And keep records of your normal work schedule pre-COVID to establish your baseline. If possible, document how your business income was affected - comparing earnings or billings from similar periods before the pandemic might help demonstrate the impact. The more documentation you have connecting the care needs to your reduced work hours, the better position you'll be in if questioned.

I had the same experience! TurboTax gave me a much smaller credit than FreeTaxUSA. My accountant explained that some software was more aggressive in their interpretations of the rules while others were more conservative. He recommended documenting everything carefully in case of an audit, regardless of which calculation you go with.

This actually has me worried now. We have a few people who work pretty regularly for us but we've always considered them contractors. Is there a simple test to determine if someone should get a W-2 vs a 1099-NEC?

The IRS looks at three main categories: Behavioral Control (do you control how they work?), Financial Control (do they have opportunity for profit/loss?), and Relationship Type (written contracts, benefits, permanency of relationship). A good rule of thumb is if you control WHEN and HOW someone does their work, provide their tools/equipment, and they work exclusively for you over a long period, they're more likely to be classified as an employee. If they control their own schedule, use their own methods/equipment, and work for multiple clients, they're more likely to properly be classified as a contractor.

I used TaxBandits last year and it was pretty straightforward. The interface is a bit dated but they have good customer service. One tip - they charge per form, so double check your forms before submitting since corrections cost extra.