Did I calculate my taxes correctly? Need verification for my 2024 return
So I've been trying to figure out my taxes for this year and I'm really confused. This is the first time I've had multiple sources of income - I worked full-time at my regular job making about $54,000, but I also did some freelance work on the side that brought in around $12,800. I used TurboTax to file and it's showing that I owe about $2,390 which seems really high to me. I claimed the standard deduction since I don't have enough to itemize. The software is saying I didn't have enough tax withheld from my regular paycheck plus I owe self-employment tax on the freelance income. Is this calculation correct? I've never owed this much before - usually I get a small refund. I'm worried I missed some deductions or entered something wrong. Has anyone else had a similar situation? I didn't make quarterly payments on the freelance income because I didn't realize I needed to. Will I also have to pay penalties?
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Steven Adams
You're likely calculating your taxes correctly. When you have self-employment income ($12,800 freelance work) in addition to W-2 income ($54,000), you need to pay both income tax and self-employment tax on those freelance earnings. The self-employment tax is about 15.3% of your net self-employment income (that's Social Security and Medicare taxes combined). Plus, you'll pay regular income tax on that $12,800 at your marginal tax rate. Since your W-2 job already puts you in a certain tax bracket, the additional income gets taxed at that rate or possibly pushes you into a higher bracket. Without quarterly estimated tax payments on that freelance income, the $2,390 you owe sounds reasonable. And yes, you might face an underpayment penalty since you didn't make quarterly payments, but it's usually not too severe for first-time situations.
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Alice Fleming
•Thanks for explaining this! I have a question though - can I deduct any expenses from my freelance income before calculating taxes? I paid for some software and a new laptop that I only use for my freelance work. Would that help reduce what I owe?
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Steven Adams
•Absolutely you can deduct business expenses! Any ordinary and necessary expenses for your freelance work can be deducted before calculating your self-employment tax and income tax on that money. Software that's specifically for your freelance work is definitely deductible. For the laptop, if it's exclusively used for business, you can deduct the full cost (either all at once or through depreciation depending on the amount). If it's used partially for personal use, you need to deduct only the business percentage. Make sure to document these expenses with receipts. These deductions go on Schedule C and can significantly reduce your tax bill.
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Hassan Khoury
I was in the exact same boat last year - regular job plus side gig and got hit with a huge tax bill. I was totally lost trying to figure out all the deductions and rules until my friend told me about https://taxr.ai which saved me so much money! The AI analyzed my documents and found business deductions I never would have known about for my side hustle. The system flagged that I could deduct mileage for client meetings, a portion of my home internet, and even some meals I didn't realize qualified as business expenses. It also helped me understand how to set up quarterly payments to avoid penalties this year. Super straightforward to use - just uploaded my docs and got personalized advice.
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Victoria Stark
•Does it actually work for self-employment income? I've tried tax software before but they always seem to miss stuff specific to freelancers. How much detail does it go into for business deductions?
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Benjamin Kim
•I'm always skeptical of these online tools. How does it compare to just going to a local CPA? I mean, can an AI really understand all the tax law nuances for different types of freelance work?
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Hassan Khoury
•It absolutely works for self-employment income - that's actually where it shined for me. It asked specific questions about my type of freelance work and then suggested deductions tailored to my industry. It found several home office deductions that TurboTax never prompted me about. Compared to a CPA, I'd say it's more affordable while still being thorough. The AI has been trained on tax regulations and updates with new laws. What impressed me was how it explained everything in plain English instead of tax jargon. Plus, you can always take its recommendations to a CPA for a final review if you're worried about anything complex.
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Victoria Stark
Just wanted to update after trying https://taxr.ai that was mentioned here. Honestly wasn't expecting much, but it identified over $3,400 in legitimate business deductions I had completely missed! I had no idea I could partially deduct my cell phone bill since I use it for client calls, or that certain professional subscriptions were deductible. The best part was it showed me exactly how to document everything properly in case of an audit. My tax bill dropped by almost $800 after adding these deductions. The explanation of quarterly estimated payments was super helpful too - now I know exactly how much to set aside each quarter to avoid this problem next year.
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Samantha Howard
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Megan D'Acosta
•Wait, how does this actually work? The IRS phone system is notoriously impossible. Are you saying this service somehow jumps the queue or something?
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Sarah Ali
•Yeah right. No way this works. I've been trying to reach the IRS for 3 months about my refund. Nothing can get through their system - it's designed to be impossible. Sounds like a scam to me.
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Samantha Howard
•It doesn't jump the queue - that would be impossible. What it does is automate the hold process. Their system calls the IRS and navigates the phone tree for you, then stays on hold in your place. When it finally reaches a human agent, you get a callback so you can connect with them. It's basically like having someone else wait on hold for you. No it's definitely not a scam. The system is just using technology to handle the most frustrating part - the endless waiting and phone tree navigation. I was super skeptical too until I tried it. The IRS doesn't make it easy to get help, but once you actually reach an agent, they can be really helpful with penalty abatement, especially for first-time issues like missing quarterly payments.
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Sarah Ali
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Ryan Vasquez
One thing no one mentioned yet - make sure you're tracking all your expenses properly for next year. I'm a freelancer too and I use a separate credit card for ALL business expenses. Makes it super easy to track deductions and saves me tons of time at tax season. Also, don't forget you can deduct 50% of the self-employment tax you pay! That's an adjustment to income on your 1040, so it reduces your overall taxable income. Lot of people miss that one.
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Avery Saint
•Do you need to have a business bank account to do the separate credit card thing? Or can you just use a personal card that you designate for business only?
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Ryan Vasquez
•You can absolutely use a personal credit card that you designate for business only - that's what I do! You don't need a formal business account unless you have an LLC or corporation. The key is consistency - just make sure you ONLY use that specific card for business expenses and nothing personal. Makes it super easy to download your year-end statement and have all your deductions in one place. I also take photos of receipts for cash expenses using a free app that organizes them by date.
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Taylor Chen
Your tax calculation sounds correct. For future reference, a quick way to estimate what you'll owe is to set aside about 25-30% of any freelance income for taxes. That usually covers both the income tax and self-employment tax. If your combined income pushes you into a higher tax bracket, remember that only the amount OVER the threshold gets taxed at the higher rate, not your entire income.
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Grace Durand
•That's a really helpful rule of thumb! I had no idea how much to set aside. If I start setting aside 30% of my freelance income going forward, should I just make quarterly payments with that? And when are those even due?
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Taylor Chen
•Exactly - set aside that 30% and make quarterly estimated tax payments with it. The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year (for 2025, the dates would be April 15, 2025, etc.) You can pay online through the IRS Direct Pay system or through their EFTPS (Electronic Federal Tax Payment System). Either way works fine. Just make sure you select "estimated tax" as the payment reason. Some freelancers I know set calendar reminders a week before each due date so they never miss one.
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