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I'm being charged sales tax on a phone I never purchased
Has anyone dealt with something like this before? I just got my credit card statement and there's a charge for sales tax on a phone I never bought. The weird part is there's no charge for the actual phone itself, just the sales tax which is around $42. I called my credit card company and they said I should contact the merchant first before disputing. But the charge is from some electronics store I've never even shopped at before! I'm really confused about how I can be charged sales tax on an item I didn't purchase. Is this some kind of scam or fraud attempt? Should I just go ahead and dispute it or is there something I'm missing?
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Can anyone PLEASE explain how self employment taxes work for dummies? I'm so confused!
So I've been doing some side gigs and I'm completely lost about self employment taxes. Everywhere I read it says if you make under $400 as a self employed person you don't have to pay taxes. But I'm super confused - is that $400 a month? $400 a year? $400 per client? I'm seriously frustrated that none of this was ever taught in high school. I'm 23 now and feel completely clueless about how to handle money as an adult. I've been doing some digital art commissions and dog walking on weekends, but I have no idea what I'm supposed to report or pay taxes on. Can someone break this down super simple for me? I feel like a complete idiot asking this but I'd rather look dumb now than mess up my taxes later.
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Something nobody mentioned yet - if you have a regular W-2 job AND self-employment income, you still need to report the self-employment income even if it's under $400. The $400 threshold is just for paying the self-employment tax (Social Security/Medicare), but you still pay income tax on all your earnings. I learned this the hard way when I got a letter from the IRS about unreported income from a small web design project I did.
Wait seriously? So even if I only make like $200 from dog walking, I still need to report it? Does that mean I need all those complicated self employment forms too or just report it as extra income somewhere? This is exactly the kind of detail that confuses me.
Yes, you still need to report it, but it's not as complicated as it sounds. You'll need to fill out a Schedule C to report your business income and expenses, but it's pretty straightforward for a simple side gig like dog walking. You won't need to pay the self-employment tax (the Social Security and Medicare portion) if your net profit is under $400, but you'll still include that income on your regular 1040 form and potentially pay income tax on it depending on your overall tax situation. Many tax software programs will walk you through this pretty easily.
Jumping in to add something important - keep GOOD RECORDS of your self-employment income and expenses! I've been self-employed for 3 years and the biggest thing that saved me was creating a simple spreadsheet from day one. Log every payment you receive and every expense related to your work. Take photos of receipts. If you use your car for business, track miles. It's so much easier to do this as you go than to try reconstructing everything at tax time.
What kind of expenses can I actually deduct? I do graphic design from my apartment. Can I deduct part of my rent? Internet? My computer? How do you calculate all that?
How do I file taxes for driving for Uber as a side gig during summer break?
I'm a teacher and usually just deal with a simple W2 from my school district for taxes, but this year I drove for Uber during summer break to make some extra cash. Now I'm totally confused about how to handle the tax situation. Some friends mentioned I need to pay "quarterly estimated taxes" for gig work like Uber, but honestly I have zero clue how that works. I tried looking it up online but ended up even more lost than before. The thing is, Uber only provides tax documents yearly, and my driving was super inconsistent - just whenever surge pricing looked good or I felt like making some money. It's definitely not my main income source. I probably made around $2,800 over the summer, but it varied a lot week to week. Do I really need to deal with these quarterly estimated taxes? And if so, is this something I can figure out myself or do I absolutely need to hire a CPA? I've always done my own taxes with the W2 from teaching, but this Uber situation has me completely stressed out.
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Don't overthink this! I've been driving for Lyft and Uber on weekends for 3 years while working my regular 9-5. Here's what I do: 1. Track ALL my miles when the app is on (I use Stride - it's free) 2. Save receipts for car washes, phone mounts, etc. 3. Put aside about 25% of what I make from driving 4. At tax time, I use the 1099 from Uber and fill out Schedule C and Schedule SE I've never done quarterly payments and never had an issue. My regular job withholding covers the extra tax. If you're really worried, just put some money aside in case you owe at tax time.
Do you think 25% is enough to set aside? I've heard people say to save 30-35% for self-employment stuff. Also does the mileage deduction really make that big a difference?
I find 25% is plenty for me, but it depends on your tax bracket and how much driving you're doing compared to your main job. If Uber is a small percentage of your total income, 25% should be more than enough. The mileage deduction is HUGE! Last year I drove about 4,200 miles for rideshare and got a deduction of nearly $2,460. That significantly reduced my taxable income from driving. In fact, after the mileage and other deductions, I only had to pay taxes on about 30% of what Uber/Lyft paid me. That's why I emphasize tracking every single mile you drive with the app on.
As a teacher who also drives for DoorDash during breaks, I recommend using the IRS withholding calculator on their website. Input both your teaching income AND estimated gig earnings, and it'll tell you if you need to adjust your W-4 at school to cover the extra income. I just had my school district withhold an extra $50 per paycheck, which covered my DoorDash earnings so I didn't need to bother with quarterly payments. Way simpler than figuring out estimated payments!
Thats actually really smart. I never thought of just adjusting my regular job withholding instead of dealing with quarterly stuff. Does your school district HR department ever question why youre withholding extra?
Can I deduct mileage for previous years on my Instacart driving gigs?
Quick question as I've been banging my head against the wall after researching for hours... Can you claim mileage deductions for previous tax years if you never claimed them before for gig work like Instacart? I've been driving for them since 2021 and never claimed those miles because I didn't know any better (and made less than the filing threshold). I randomly came across an article saying you can go back and claim mileage deductions for up to 3 previous years, but I can't find this information confirmed anywhere else. This would be huge for me if true! I still have all my evidence from Instacart showing exact mileage for every single delivery I completed back in 2021. Feels like I left a ton of money on the table. Also wondering - if I can actually claim these 2021 miles, what happens if my total mileage deduction from combining different years ends up being larger than what I actually earned from gig work this year? Really appreciate any help!! Just trying to learn and not miss out on deductions I'm entitled to! 😁
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Quick question - if I amend my 2022 return for missed mileage, will that increase my chances of being audited? I've heard that filing amendments raises red flags.
Filing an amended return doesn't automatically trigger an audit, but significant changes that substantially reduce your tax liability might get more scrutiny. The key is having proper documentation for your mileage claims. If you have good records (or even reconstructed records based on actual evidence like your delivery history), you shouldn't worry too much. The IRS understands that people make mistakes or learn about deductions they missed.
That makes me feel better, thanks. I have all my delivery records from the apps so I should be able to reconstruct everything if needed. I just didn't want to open a can of worms by amending returns if it meant automatically getting flagged or something!
For those amending multiple years of tax returns for mileage, be strategic about when you file them. Don't send them all at once because that can look suspicious to the IRS. Space them out a few weeks apart. Also, don't forget that if your self-employment net income (after deducting mileage) was over $400 for any of these years, you still owe self-employment tax even if you were below the standard filing threshold. When people say "I made less than the threshold," they're often thinking of income tax, not self-employment tax which kicks in at a much lower level.
Is TurboTax still a good option or should I consider alternatives?
Just recently left my job with the Coast Guard after 6 years of service and heading back to civilian life. During my time in, I always used TurboTax to handle my tax returns because it seemed straightforward enough. But now I'm hearing from friends and seeing stuff online saying TurboTax isn't recommended anymore or has issues? This has me confused since it's literally the only tax software I've ever used. My tax situation isn't super complicated - just my military income up until discharge, then the new civilian job I started. I do have some VA benefits now too if that matters. Can anyone tell me if TurboTax is still okay to use or should I be looking at other options? What's the deal with all the negativity I'm hearing about it? Any recommendations on alternatives if I should switch?
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I'll go against the grain here - I still use TurboTax and haven't had any issues. Yes, it's more expensive than some alternatives, but the interface is super intuitive and I know where everything is. For me, the time saved is worth the extra cost. If you've used it before and are comfortable with it, there's nothing wrong with sticking with TurboTax. Just be aware of the upselling and make sure you actually need the features they're trying to get you to pay for.
Do you use the online version or desktop? I've heard the desktop version is better for military situations because it gives you more control, but it's also more expensive.
I use the online version, but I've used both in the past. The desktop version does give you a bit more control and detailed forms, but honestly for most military situations the online version has worked fine for me. The key is to look carefully at whether you really need the "Deluxe" or "Premier" versions they try to upsell you to. Often the lower-tier version will handle everything you need, especially if you don't have complex investments or rental properties. The military-specific items like combat pay exclusion are actually handled in all versions, even the basic one.
One thing to consider is free options through Military OneSource. They offer free access to tax filing software (I think it's actually a version of H&R Block) for active duty, Guard, Reserve, and recently separated service members. I used it last year and it was pretty good.
Wait, do they offer this for veterans too or only for those who recently separated? I've been out for 3 years now and didn't know about this.
KaiEsmeralda
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?
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Zane Hernandez
AuthorI 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.
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KaiEsmeralda
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.
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Debra Bai
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.
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Gabriel Freeman
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.
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Zane Hernandez
AuthorThank you both for the warnings. I just got off the phone with my credit card company and they're sending me a new card with a different number. They're also refunding the charge after I explained the situation. Going to check my credit reports right now.
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