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Taxes!?!

April 19, 2023 05:58AM
I have used freetaxusa for several years. It allows you to do a schedule c and file federal for free. State is $15. They have deluxe and upgrade versions that give extra benefits but are not necessary. It is really good tax software all done online and you just input info and it calculates and fills in the proper forms and schedules for you. I highly recommend it.

Shopping Western NY, Northeast and Central PA, and parts of Ohio and West Virginia. Have car will travel anywhere if the monies right.
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More About Mystery Shopping Taxes
April 19, 2023 12:58PM
There's no right or wrong as to how companies figure compensation for 1099 purposes. Some include reimbursable expenses, in which case the IC has to deduct those. This is not wrong, so it's not a case of they "shouldn't." Some include just the net fees. Even if they don't include those reimbursements, you can still include them, then deduct them if it's easier for you; e.g., if that's how you do most of your accounting (count *all* revenue, then deduct all expenses). That's how I do it, but that's just because it's easier for me. But others do it the other way. Either is fine, as long as the math works out.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
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April 19, 2023 01:01PM
@BuffaloNY101 wrote:

I have used freetaxusa for several years. It allows you to do a schedule c and file federal for free. State is $15. They have deluxe and upgrade versions that give extra benefits but are not necessary. It is really good tax software all done online and you just input info and it calculates and fills in the proper forms and schedules for you. I highly recommend it.

I'm curious about these programs. Do they figure out what equipment purchases should be depreciated and which should be deducted in that tax year? And do they do the calculations for home office space and tell you when you're eligible to deduct partial utility costs? As I've said, I've never used one and don't plan to, but I'm wondering if you can get the level of customization you can when you use a "real" person. Sounds as if some of them are pretty advanced, though.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
Reply
April 19, 2023 01:44PM
TurboTax permits either expensing (taking the full deduction in the current year) or depreciating an eligible item. It provides guidance, but you get to choose. The nice thing is that you can effectively check the impact of the decision on your taxes, and go back and forth easily. There really isn't a right answer for this, but from what I have read, the answer is generally expense now because the law might change. However, if you are trying to be profitable (the "3 out of 5 rule"), then depreciation might be a better option.

For the home office deduction, TurboTax again offers options. You can either use square footage or simply count rooms. Again, you can see the impact. It prompts you to enter utility bills, property taxes, etc., and then calculates the eligible percentage of each of those.
@BirdyC wrote:

I'm curious about these programs. Do they figure out what equipment purchases should be depreciated and which should be deducted in that tax year? And do they do the calculations for home office space and tell you when you're eligible to deduct partial utility costs? As I've said, I've never used one and don't plan to, but I'm wondering if you can get the level of customization you can when you use a "real" person. Sounds as if some of them are pretty advanced, though.

Shopping Southeast Pennsylvania, Delaware above the canal, and South Jersey since 2008
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April 19, 2023 01:54PM
I got our taxes finished. I started a long time ago but at the last minute my SO kept casting aspersions (without basis) on my work. I think it was all for naught.

I have always done our taxes and never used a professional. I have not been self employed before. I have really meticulous records and I feel confident in what I sent out. We'll see what becomes of it! I did not claim a home office or have to deal with depreciation. If I had do deal with those, I would likely use a professional.

Someone added a reminder about not deducting all of the cell or internet and I did remember to do that, thank goodness. I did recall three business expenses that my SO forgot to add to his list about 20 minutes after hitting submit! Oh well. I definitely did deduct health insurance.

I highly agree with the comments about understanding the taxes. I used turbotax and would constantly switch back and forth between the data entry part and the forms. By understanding the details for some of the tax credits, I was able to maximize my return but adjusting what I put in traditional IRA vs Roth IRA.

I'm hoping that nobody gets audited! I appreciate what an awesome community this is!

Edited 1 time(s). Last edit at 04/19/2023 01:55PM by olympia tennenbaum.
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April 19, 2023 09:22PM
@Madetoshop wrote:

If you cannot understand or do not want to, see a tax professional and be aware, they sometimes are not as wonderful and educated as they lead you to believe.

Which is why it's still important to understand the IRS guidelines, even if you use a professional. Doing my due diligence is how I found out that a tax preparer recommended to us by a friend was jerking us around and really didn't know what she was doing. Once I saw her mistakes (forgetting to carry over a depreciated expense, for one) and her outright lies (lying about extension deadlines 'cuz she just couldn't get ours done in time), I called her out on them, citing the applicable IRS laws. She refunded most of our fee, maybe all of it. I can't remember. So even if you turn your taxes over to a pro and even if that pro is good, it pays to stay updated on the IRS rules.

I learn something new every day, but not everyday!
I've learned to never trust spell-check or my phone's auto-fill feature.
Reply
April 20, 2023 02:32AM
So true, even the pros make mistakes. I started using a CPA for only one purpose - to help me correctly determine the maximum amounts that I can contribute to my solo 401k plans - both regular and Roth, and how much to put in to each to minimize tax due. I knew the amounts she told me were completely wrong. She apologized that she had not checked the box for voluntary contributions.
@BirdyC wrote:

@Madetoshop wrote:

If you cannot understand or do not want to, see a tax professional and be aware, they sometimes are not as wonderful and educated as they lead you to believe.

Which is why it's still important to understand the IRS guidelines, even if you use a professional. Doing my due diligence is how I found out that a tax preparer recommended to us by a friend was jerking us around and really didn't know what she was doing. Once I saw her mistakes (forgetting to carry over a depreciated expense, for one) and her outright lies (lying about extension deadlines 'cuz she just couldn't get ours done in time), I called her out on them, citing the applicable IRS laws. She refunded most of our fee, maybe all of it. I can't remember. So even if you turn your taxes over to a pro and even if that pro is good, it pays to stay updated on the IRS rules.
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April 20, 2023 04:02PM
This is so true. I worked for a tax software company for a while and mostly dealt with the smaller biz preparers (like a local CPA vs. the HR Blocks of the world), and 90% of their business was fairly simple returns because the avg person is scared and doesn't want to learn about taxes. its important to know what you can deduct, what you can invest in to avoid taxes, so on and so forth.

@Madetoshop wrote:

Please try and understand the tax code. If you do your own taxes and use software, look at the worksheets and calculations behind the numbers and understand what is going on. I cannot stress enough to read and understand the IRS publications on the topic you are trying to get a grip on. If you cannot understand or do not want to, see a tax professional and be aware, they sometimes are not as wonderful and educated as they lead you to believe.
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April 22, 2023 01:31AM
Here is an article I found while searching to see how to deduct my medical premiums which are probably more than my total net earnings as a mystery shopper for 2022. I did not realize this was a turbo tax blog until after I read to the bottom but it contains info for anyone...[blog.turbotax.intuit.com]
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