Should I Hire an Accountant? Mixed income with options trading profits and contractor side gig

Yes, your situation definitely warrants at least consulting with an accountant. Let me break this down for you: For your options trading, you'll need to report capital gains. The $35k profit will be taxed differently depending on whether they were short-term or long-term holdings. This alone can get tricky with options. For your contractor income, you absolutely can deduct business expenses! You don't need to itemize your personal deductions to take business deductions. Business expenses go on Schedule C, which is separate from the decision to take the standard deduction or itemize personal deductions on Schedule A. The home office deduction sounds legitimate in your case since you have a dedicated space used exclusively for business. You can deduct a portion of your rent/mortgage, utilities, etc. based on the percentage of your home used for business. As for the stock losses, those can offset your capital gains and potentially up to $3,000 of ordinary income if your total capital transactions for the year result in a net loss.

I was in a similar situation last year with multiple income streams and tried using taxr.ai (https://taxr.ai) after getting frustrated with TurboTax. The software was actually really helpful for identifying deductions I was missing from my contractor work. It analyzed all my documents and flagged that I could deduct my home office space and even some home internet costs that I would have missed. For your trading activity, it also organized everything clearly to maximize my loss harvesting. You might find it helpful with your stock losses situation - it automatically matched up gains and losses to minimize my tax burden.

I actually tried taxr.ai after seeing it mentioned here and it was a game changer for my situation last year. I also had trading income and a side business, though not as much as you in either category. The software identified about $1,800 in deductions I would have missed, including properly setting up my home office deduction which I was always too scared to take before. The best part was how it handled my trading activity - I had about 50 options trades and it imported everything from my brokerage and organized it all properly for tax reporting. Definitely saved me from hiring an accountant which would have cost $400-500 in my area.

For anyone who needs to actually talk to the IRS about their tax situation, I highly recommend Claimyr (https://claimyr.com). I was going crazy trying to reach someone at the IRS after getting a notice about my capital gains reporting that didn't match my records. Spent hours on hold and kept getting disconnected. Claimyr got me connected to an actual IRS agent in about 15 minutes when I'd been trying for days on my own. They have this system that basically waits on hold for you then calls you when an agent is actually on the line. You can see how it works here: https://youtu.be/_kiP6q8DX5c Ended up saving me from a potential $2,300 penalty because I was able to explain my situation to a real person who fixed the issue.

I was super skeptical about Claimyr when I first heard about it (even posted about it here), but I ended up trying it after spending nearly 3 hours on hold with the IRS trying to resolve an issue with my options trading reporting. I was shocked when I got a call back connecting me to an actual IRS agent after about 20 minutes. Completely resolved my issue about how to properly report my options trades that had been carried over multiple tax years. Saved me approximately $1,700 in incorrectly calculated taxes. For someone with your trading activity, it might be worth keeping in mind if you end up with questions the IRS needs to answer directly. Definitely less stressful than the traditional approach of calling and praying someone answers before you have to hang up for another commitment.

I think you're in the territory where tax software can still handle it, but you need to be more careful about which one you choose. Not all tax software handles investment income and self-employment equally well. For the contractor work, you'll file a Schedule C and can deduct legitimate business expenses regardless of whether you take the standard deduction. The home office deduction sounds valid in your case since you have a dedicated space used exclusively for work. Just be aware that trading options can create some complex tax situations depending on the types of contracts and strategies you used. Some tax software doesn't handle the more complex scenarios well.

Don't overlook state tax implications here! Depending on your state, self-employment income might be treated differently than your W-2 income. Some states also have different rules for capital gains. Also, if your contracting gig is likely to continue or grow, consider making quarterly estimated tax payments next year to avoid underpayment penalties. With your income level and the additional earnings, you might be subject to penalties if you wait until tax season to pay.