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Fellow illustrator here! One thing that saved me when I had a similar situation was going through my email for digital receipts. Check your inbox for: - Adobe subscription payments - Art supply store order confirmations - Computer/tablet/hardware purchases - Online course payments - Website hosting fees Also check your social media DMs if you arrange client work there. My Instagram DMs had tons of evidence of client negotiations that helped prove income sources. And don't forget apps like Venmo or Cash App if you've used those!
Thank you so much for these specific suggestions! I never thought to check my email archives but I just did a quick search and found at least 15 receipts for art supplies I'd completely forgotten about. Found records of my Procreate purchase, Clip Studio subscription, and even some drawing tablet accessories. Do you think PayPal's reports will show both my income AND my business expenses if I purchased them through PayPal? Or do I need to sort that out separately?
PayPal reports will show all your transactions, but they won't distinguish between personal and business expenses automatically. You'll need to go through and identify which purchases were for your illustration work. Your PayPal 1099 only reports your income received through PayPal, not your expenses. I'd recommend downloading your PayPal transaction history for the full year and sorting it in a spreadsheet. Look for payments to art supply stores, software companies, and other business-related vendors. Flag those as potential deductions, then verify with any email receipts you can find to confirm the purpose of each purchase.
Don't ignore your taxes!! I did that for two years as a freelancer and ended up owing over $15,000 with penalties and interest. The IRS eventually garnished my bank account and it was a NIGHTMARE to fix. Even filing with estimates is way better than not filing at all. And definitely set up quarterly estimated tax payments going forward - that was my big mistake, thinking I could just pay it all at the end of the year.
Exactly this! I wasn't just hit with the taxes I owed but also a 25% failure-to-file penalty PLUS interest that kept growing. The IRS is actually pretty reasonable if you file on time and work with them, even if you can't pay right away. It's when you don't file that they get aggressive.
Just want to add - don't rush to file the moment the IRS opens if you're expecting forms other than your W-2! I made that mistake last year and had to file an amended return because my 1099-INT from my bank came late. Also, if you had any foreign accounts or investments before moving to the US, you might need to file a FBAR form (Report of Foreign Bank and Financial Accounts) separately from your tax return if the total value was over $10,000 at any point during the year. That deadline is actually different from the regular tax deadline.
Oh wait, I do still have a savings account back in Canada with about $15,000 CAD in it. I had no idea I needed to report that! Is that going to cause problems? And does that mean I can't file early?
You definitely need to file an FBAR for that account since it exceeds $10,000. It's not part of your tax return though - it's filed separately through FinCEN (Financial Crimes Enforcement Network). Don't panic! It's just an information reporting requirement, not a tax. You can still file your regular tax return early, and the FBAR is due April 15th with an automatic extension to October 15th. Make sure you also report any interest earned on that Canadian account on your US tax return (Schedule B). The fact that you're asking about this now is good - it's much better to handle it correctly from the start rather than having to fix it later!
Has anyone used the IRS Free File program as a first-time resident? I heard there are income limits but I'm not sure if residency status affects eligibility?
I used IRS Free File last year as a new resident (moved from Australia). As long as you meet the income requirements (under $73,000 for most programs), your residency status doesn't affect eligibility. They'll ask questions about when you became a resident, but the free software handles it just fine!
When I was in ur situation I just put "EXEMPT" on my w4 (there should be a place for this on the form). That way they don't take any federal taxes out at all. Just be aware they'll still take out Social Security and Medicare taxes no matter what (those are different
Unrelated to the withholding question, but make sure your parents understand how claiming you impacts their taxes vs you filing independently. Sometimes parents claim kids without actually running the numbers both ways. In some situations, it might be better overall if they don't claim you, but you'd need to talk with them about it.
This happened to me once and turned out to be related to a phone my wife bought that was added to our family plan. The phone itself was billed to the phone carrier account but for some reason the sales tax posted separately to my credit card. Check if anyone else in your household might have made a purchase?
I actually live alone and don't have any shared accounts with family members. I've never even had a family phone plan - always just had my own individual account. That's what makes this so confusing. There's literally no legitimate reason I should be seeing this charge.
In that case, it definitely sounds like fraud. One other possibility - did you recently buy anything online where you paid through PayPal or another payment service? Sometimes the merchant will process the main payment through the service but charge taxes separately directly to the card.
Watch out for what happens next! These small tax charges are often "test charges" by fraudsters. If they go through without being disputed, they'll hit you with much larger charges. I'd recommend: 1) Dispute the charge immediately 2) Ask for a new card number 3) Check your credit reports at all three bureaus 4) Set up fraud alerts and credit freezes Don't wait on this - I learned the hard way and ended up with $3000 in fraudulent charges after ignoring a strange $15 tax charge.
This is exactly what happened to my sister. Small weird tax charge, then boom - two weeks later her card was maxed out with purchases from electronics stores across the country. Definitely get a new card number ASAP.
Serene Snow
Has anyone tried just using the numbers from their last paystub and filling out the substitute W-2 form (Form 4852)? I'm in this exact situation - my employer shut down their whole operation in November and literally no one is responding to emails. My tax guy says I can use my last paystub to fill in all the numbers, but I'm worried about accuracy since some of my deductions were weird toward the end (they started taking out different health insurance amounts when they were having financial problems).
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Issac Nightingale
ā¢I did this last year when my W-2 never showed up. Used my December paystub and filled out Form 4852. It worked fine but I had to file a paper return which took FOREVER to process. Got my refund like 5 months later. Also make sure your YTD (year to date) numbers are actually for the full year. My paystub reset the YTD fields in July for some weird reason so I had to add two numbers together. Check if you have an earlier paystub to compare.
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Serene Snow
ā¢Thanks for the info. I do have all my paystubs thankfully, so I can check the YTD totals. Did you just attach the 4852 form to your regular return? And did the IRS ever question any of your numbers or was it all accepted as submitted?
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Romeo Barrett
For anyone dealing with this issue in the future - the IRS usually gets W-2 information from employers by late March even if the business closed. The transcript might not be immediately available online, but an IRS rep can often see it in their system before you can. Also worth knowing that if you absolutely can't get the info and must estimate, make your best guess using your final paystub and file on time. If you find out later that your numbers were wrong, you can always file an amended return. Better to file on time with estimates than miss the deadline completely!
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Marina Hendrix
ā¢Quick question - if I end up filing with Form 4852 and estimated numbers, and later the actual W-2 data shows up in the IRS system with slightly different amounts, will I definitely need to amend? Or is there some threshold where small differences don't matter?
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