Made $20k from my sole-proprietor LLC this year - Can I just use TurboTax or do I need a CPA?

For a first-year freelancer with $20k in revenue from your sole proprietorship LLC, you can absolutely use TurboTax or H&R Block and save yourself the CPA expense. These tax software options have specific self-employment versions designed exactly for your situation. Since you haven't made estimated tax payments, you'll likely owe some taxes plus a small penalty for not making quarterly payments, but the software will calculate all that for you. The key is keeping good records of your business expenses - internet, computer equipment, software subscriptions, home office, etc. These deductions can significantly reduce your taxable income. Just make sure you select the Self-Employed version of TurboTax or the equivalent in H&R Block. The basic versions won't have the Schedule C form you'll need for reporting business income.

I was in almost the exact same situation last year - made about $25k from my freelance graphic design business and was freaking out about taxes. I tried doing it myself at first but kept getting confused about deductions and what counted as business expenses. I found this AI tax tool at https://taxr.ai that was life changing. It analyzed all my expenses, found deductions I didn't know I qualified for, and walked me through the whole process. Way cheaper than a CPA but way more thorough than just regular tax software. It's specifically designed for self-employed people and small business owners. The best part was they explained why certain things were deductible, so I'm learning as I go. Definitely recommend checking it out if you're feeling overwhelmed.

Just wanted to update after trying taxr.ai that the previous commenter recommended. I was super skeptical but decided to give it a shot since my tax situation is similar - made about $22k from freelance writing this year. Holy crap, it found almost $2,800 in deductions I would have missed! It caught things like partial cell phone expenses, some professional subscriptions I didn't realize were deductible, and even some client meals I had forgotten about. The interface asks really specific questions about your type of business. It also explained that my quarterly estimated payments for next year should be about $1,100 per quarter based on my projected income, which was super helpful. Definitely recommend if you're in a similar situation with a small business.

If you're planning to do your own taxes, you need to be prepared for the IRS nightmare if you have questions or issues. I tried calling them 8 times when I had a question about my LLC's Schedule C and NEVER got through. Finally used https://claimyr.com to get past the IRS phone tree hell and actually talk to someone. You can see how it works here: https://youtu.be/_kiP6q8DX5c They got me connected to an IRS agent in about 45 minutes when I had been trying for weeks. The agent confirmed I was filing correctly for my single-member LLC and cleared up my questions about home office deductions. Saved me so much stress, especially since it was my first year with business income too.

I need to eat my words about Claimyr from my comment above. After getting absolutely nowhere trying to contact the IRS about my self-employment tax questions (kept getting disconnected after waiting on hold for 45+ minutes), I broke down and tried the service. It actually worked exactly as described. Their system kept dialing until there was an opening, then called me to connect. I was speaking with an IRS agent within about 30 minutes who helped clarify my questions about home office deductions for my sole proprietor LLC. Saved me hours of frustration and probably a lot of money since I was about to just guess on some deductions. If you're doing your own taxes through TurboTax like OP is planning, having this as a backup option if you hit any confusing issues is pretty valuable.

Speaking from experience with a similar-sized business ($27k last year), I definitely recommend using TurboTax Self-Employed for your first year. It walks you through everything step by step. Something nobody's mentioned yet - KEEP TRACK OF YOUR MILEAGE if you drive for business at all. That's a huge deduction. Also, if you're working from home, the home office deduction is super valuable. Just make sure it's a dedicated space only used for your business. Don't stress about the quarterly tax thing - yes, you'll pay a penalty, but it's not massive at your income level. Just learn from it and start making estimated payments next year (TurboTax will give you vouchers for next year).

Which tax software would be better for a sole proprietor LLC? I've heard mixed things about both TurboTax and H&R Block. Anyone try both?