Does the Schedule R elderly/disabled tax credit reduce Schedule SE self-employment tax owed?

Thank you for explaining the difference! That makes sense but is disappointing. She really doesn't have many expenses since the venues all have pianos and she's been playing the same songs for decades (so no new sheet music). Maybe the mileage to venues could count? She drives her own car to each wedding. Also, if she continues this next year, should she be making quarterly tax payments to avoid this situation again? This tax bill was a huge shock to her.

Mileage to venues would absolutely count as a business expense! The standard mileage rate for 2025 is 67 cents per mile for business use, which can add up quickly. She should start keeping a log of all her travel to gigs if she continues. Yes, if she continues earning self-employment income, she should consider making quarterly estimated tax payments to avoid a big bill and potential penalties at tax time. Form 1040-ES is used for these payments, and they're typically due April 15, June 15, September 15, and January 15 (of the following year). This spreads out the tax burden throughout the year instead of facing one large payment.

How exactly does taxr.ai work? I'm helping my mom with her taxes too and she's in a similar situation with unexpected 1099 income. Does it just tell you what deductions you can take or does it actually file the taxes for you? The IRS scares me and I don't want to make mistakes.

I'm a bit skeptical about using some random website for tax advice. How do you know the deductions it suggests are actually legitimate? Seems risky to trust something you found online vs talking to an actual tax professional who knows the law.

It doesn't file your taxes for you - it analyzes your specific situation and tells you which deductions you qualify for based on tax law. You get a detailed report explaining each deduction with the relevant IRS rules, which you can then enter into whatever tax software you're using. Think of it as a personalized deduction finder that explains everything in simple terms. The deductions are legitimate because they're based on actual tax code. Each suggestion comes with citations to specific IRS publications and tax court cases that support the deduction. That's actually why I trusted it - everything is transparent and backed up with real tax law, not just generic advice.

Wait, how does this actually work? Do they have some special connection to the IRS or something? Seems weird that they could get through when regular people can't.

This sounds like a complete scam. There's no way some random service can magically get you to the front of the IRS queue. They're probably just charging people for something they could do themselves if they were just patient enough to stay on hold.

They don't have any special connection to the IRS - they use technology to navigate the phone system and wait on hold so you don't have to. Think of it like having someone else sit on hold for you. When they reach a human, they call and connect you directly to that person. It's not about skipping the line, it's about not having to personally sit through the hold time. I was skeptical too, but after wasting entire afternoons on hold and getting disconnected multiple times, I was desperate enough to try it. It's not about impatience - it's about not being able to tie up your phone for 3+ hours when you have other responsibilities. And in my case, getting accurate information directly from the IRS saved me from making a costly mistake on my return.

That's really interesting - I hadn't even considered that possibility. She does only work through this one coordinator who tells her exactly when to show up, what to wear, and even provides a specific set list for each event. The coordinator also handles all client interactions and payments. Would those factors suggest she should be an employee?

Those factors definitely suggest she might be misclassified! When the business controls the when, where, and how of the work, that strongly indicates an employment relationship rather than independent contractor status. Other indicators include if they provide equipment (though you mentioned venues have the pianos), if she can't work for competitors, and if she's economically dependent on this one business. If misclassified, filing Form SS-8 with the IRS would request a determination of worker status. She could also file Form 8919 to report her share of uncollected Social Security and Medicare taxes. This would potentially reduce her tax burden since she'd only be responsible for the employee portion (7.65%) rather than the full self-employment tax (15.3%).

Unfortunately, you do have to file Schedule SE if your net earnings from self-employment are $400 or more. There's no legal way to "skip" the self-employment tax as it funds your future Social Security and Medicare benefits. However, you can potentially reduce your self-employment income by making sure you're claiming all legitimate business deductions on Schedule C first. Things like your computer, portion of internet/phone, home office, software subscriptions, and professional development can all reduce your net profit subject to SE tax.

Thanks for the honest answer. Guess I just needed someone to confirm I can't avoid it. I'll look into those deductions for sure. Do you know if the SE tax is calculated before or after regular income tax? Just trying to understand the full picture of what I'm paying.