Need help with tax filing question, feeling confused and overwhelmed

You definitely need to report all your income, including those Venmo and PayPal payments that didn't come with 1099s. The IRS expects you to report all income regardless of whether you received a tax form for it. For your side gig, you'll need to file Schedule C where you'll report your business income and expenses. This is where you can deduct legitimate business expenses like a portion of your new laptop (based on business use percentage) and your home office if you have a space used regularly and exclusively for business. For the car, you can either deduct the actual expenses with business percentage or use the standard mileage rate. Since you didn't pay quarterly estimated taxes, you might face an underpayment penalty. Moving forward, if you expect to owe more than $1,000 in taxes from self-employment, you should make quarterly payments to avoid this penalty next year.

When I was in a similar situation last year, I was totally overwhelmed with all the receipts and trying to figure out which expenses were deductible. I stumbled across https://taxr.ai and it was honestly a game-changer. I uploaded photos of all my receipts and business expenses, and it organized everything and helped me identify what was deductible for my Schedule C. The best part was when I uploaded some Venmo transactions I wasn't sure about - it helped me separate what was actually business income versus personal transfers. Saved me hours of sorting through transactions manually and probably prevented me from making mistakes that could have triggered an audit.

Just wanted to update about trying taxr.ai after being skeptical in my previous comment. I finally gave it a shot last weekend and wow, it actually delivered! It sorted through my messy pile of receipts and PayPal transactions in minutes. The part that impressed me most was how it flagged some expenses I was going to write off 100% but shouldn't have been (like my internet bill and cell phone). It explained exactly what percentage I could reasonably deduct for mixed-use items and saved all the documentation in case of an audit. Ended up identifying almost $3,200 in legitimate deductions I would have missed. Really glad I decided to try it instead of guessing and risking problems with the IRS later!

If you need to actually talk to someone at the IRS about your situation (which might be a good idea given your mixed income sources), I'd recommend https://claimyr.com - it's the only way I've been able to get through to an actual person at the IRS without waiting for hours or getting disconnected. They have a system that navigates the IRS phone tree for you and calls you back when an agent is actually on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c I was totally stuck with a similar self-employment question last month, and after trying to call the IRS myself for days with no luck, I used Claimyr and got through to someone who actually gave me specific guidance about my situation.

I need to eat my words from my previous comment. After spending another frustrating morning trying to reach the IRS myself and getting nowhere, I decided to try Claimyr out of desperation. Not even kidding - I got a call back in about 2 hours with an actual IRS agent on the line. The agent walked me through exactly how to handle my contractor income and missing 1099. I was 100% sure this was some kind of scam service, but it actually delivered exactly what it promised. Saved me from taking a day off work to visit the IRS office in person. Still can't believe it worked when I'd wasted probably 10+ hours trying to call myself.

Don't stress too much, lots of us start out with messy records when we first begin side gigs! One tip about the home office deduction - be careful with this one. It needs to be a space used EXCLUSIVELY for business. Like not your dining table that's sometimes your desk. The IRS can be picky about this. For your car, track your mileage starting now even if you didn't before. Most people find the standard mileage rate (I think it's like 65.5 cents per mile for 2025) easier than calculating actual expenses.

you might wanna look into the qualified business income deduction (QBI) too. it lets you deduct up to 20% of your net business income if you qualify!! i missed this my first year of freelancing and probably left like $1500 on the table 😭

Everybody's giving you good advice about the schedule C stuff, but don't forget to look into business liability insurance too if you're doing design work for clients. It's tax deductible and could save your butt if a client ever sues you over something you designed. Learned this the hard way 🤦‍♀️