How do I file taxes as a small business employee? What deductions can I claim?

But what about unreimbursed employee expenses? I thought you could deduct things like uniforms, tools, or mileage between work sites? Or did that change with the tax law?

The Tax Cuts and Jobs Act eliminated the deduction for unreimbursed employee business expenses for most W-2 employees for tax years 2018 through 2025. Before that change, employees could deduct certain work expenses that exceeded 2% of their adjusted gross income if they itemized. Currently, most W-2 employees cannot deduct work-related expenses like uniforms, tools, home office expenses, or mileage between work sites. The best approach is to ask your employer for reimbursement for these types of expenses.

How does it work with state taxes? My situation is complicated because I work in one state but live in another.

Did it actually find you deductions that the big tax software programs wouldn't? I'm skeptical that there's anything special it can do that TurboTax can't...

It handles multi-state tax situations really well! It asks about where you live and work, then applies the right rules for both states. It even explained how the tax credit works for taxes paid to the state where I work. The difference from regular tax software is it actually analyzes your specific situation and documents in more detail. I found deductions I qualified for that I didn't know to look for in TurboTax - especially some education credits and a partial deduction for my home internet since I occasionally work from home. The explanations were way more personalized.

Wait, how does this actually work? They just... wait on hold for you? And how do they connect you once they reach someone?

Sounds like a scam to me. Why would I trust some random service with my tax information? The IRS probably doesn't even allow this kind of thing.

They use a system that basically waits in the IRS phone queue for you. You provide your phone number, and when they reach an actual IRS agent, their system automatically calls you and connects you to the agent who's waiting on the line. You don't miss your place in line, and you don't have to listen to hold music for hours. You don't share any tax information with them - they're just getting you connected to the IRS. They don't stay on the call or listen in once you're connected. It's totally legitimate and doesn't violate any IRS rules since you're still the one speaking directly with the IRS agent.

Would driving for Uber on weekends count as side work? I started doing that to make extra cash. Do I need to keep track of my mileage and car expenses?

Yes, driving for Uber definitely counts as self-employment/side work! You'll receive a 1099 form from Uber (most likely a 1099-K) reporting your earnings. You'll report this income on Schedule C, and this is where you CAN deduct expenses. For driving, you have two options for deducting vehicle expenses: the standard mileage rate (which will be around 67 cents per mile for 2025) OR actual expenses (gas, maintenance, depreciation, etc.). Most Uber drivers find the standard mileage rate easier and often more beneficial. Just make sure you keep a detailed log of your business miles!

You would only want to itemize deductions if your total eligible itemized deductions exceed the standard deduction amount. For 2025, that's $14,350 for single filers and $28,700 for married filing jointly as you mentioned. Common itemized deductions include mortgage interest, state and local taxes (limited to $10,000), charitable contributions, and certain medical expenses that exceed 7.5% of your adjusted gross income. If adding all these up gives you more than the standard deduction, then itemizing makes sense. Otherwise, take the standard deduction.

Thanks for explaining! Our mortgage interest is only about $8,000, state taxes maybe $6,000, and we donate like $2,000 to charity. So we're at $16,000 total which is way less than the $28,700 standard deduction. Standard deduction it is!