One thing I haven't seen mentioned yet is the timing of when you make this improvement. If you're planning to do this work early in 2025, you might want to consider whether it makes sense to accelerate it into 2024 depending on your current year income situation. Also, since you're dealing with water damage and erosion, make sure to document the current damage with photos and get it assessed before you build the wall. This helps establish that you're making a necessary protective improvement rather than an optional enhancement. The IRS likes to see clear evidence that structural improvements were driven by genuine business necessity rather than personal preference. Have you considered getting multiple contractor quotes? Sometimes having 2-3 professional assessments that all identify the same erosion threat can strengthen your documentation for the business purpose of this expense.

That documentation strategy is excellent - weekly photos showing progressive erosion will be incredibly valuable for establishing business necessity. For the contractor quotes, I'd definitely ask each one to specifically address the threat to your business operations. Having them state something like "failure to install retaining wall will result in continued foundation exposure that could compromise the structural integrity of the business workspace" gives you professional third-party validation of the business purpose. Since you're looking at March 2025 timing, you might also want to check if your state/locality has any permits required for retaining walls. Getting the proper permits not only ensures you're compliant but also creates an additional paper trail showing this is a legitimate structural improvement rather than DIY landscaping. One more thought - consider having your business insurance agent review the situation too. Even if they don't cover the retaining wall cost, having them document that the erosion poses a risk to your business property creates another layer of professional assessment supporting your position that this is a necessary business expense.

Just wanted to add - if you were claimed as a dependent on someone else's return (like your parents), the filing thresholds are different. For 2021, dependents with only earned income needed to file if they made more than $12,550. But if you had unearned income (like interest), it gets more complicated. Also, even if you weren't required to file, you might want to anyway to get back that withheld tax. It's only $20 total between both years, but that's still your money!

One thing nobody's mentioned: if you were a full-time student and your income was that low, you might qualify for the American Opportunity Tax Credit or Lifetime Learning Credit for those years! Worth looking into if you paid tuition or had educational expenses.

What tax software are people using for old returns like 2021? Can you still use TurboTax or H&R Block for prior years? I'm in a similar situation and not sure which option is best.

I went through this exact same situation with my 2020 return! The panic is real but you're actually in a much better position than you think. Since you're owed a refund, you have zero penalties to worry about. One thing I wish someone had told me earlier - gather ALL your documents first before you start filing. I made the mistake of starting with just my W-2 and then realized I was missing my 1099-MISC from that side gig income you mentioned. It delayed everything by weeks. For your $3,800 side gig income, you'll definitely need to file a Schedule C if it was freelance/contractor work, and don't forget about potential business deductions you might have had that year - home office, supplies, mileage, etc. Those can really add up and increase your refund. Also, double-check your bank records from 2021-2022 to see if you made any estimated tax payments that you might have forgotten about. I found I had made a small quarterly payment that I completely forgot about, which added another $400 to my refund. The whole process took me about 6 weeks from filing to receiving my refund, but that included the time I spent tracking down missing documents. You've got this!

I wonder if its different if your accused of a federal crime vs a state crime? Maybe federal money cant be used for federal crimes? Just thinking out loud lol

One thing to keep in mind is the importance of clear documentation from the start. I'd recommend keeping detailed records of your fundraising page, showing that you're not offering any goods or services in return for donations. Screenshot everything - the description, any updates you post, etc. Also consider adding language to your fundraiser that explicitly states donations are gifts to help with legal expenses, with no expectation of anything in return. This helps establish the gift nature of the contributions from the beginning. If you do end up receiving a 1099-K from the platform, having this documentation will be crucial when explaining to the IRS why these payments shouldn't be treated as taxable income. The clearer your paper trail, the easier it'll be to handle any questions that come up later.

Has anyone tried using the IRS's online account system to find this info? I've heard they have a business tax portal but never used it myself.

Great thread! As someone who's been running a small business for a few years now, I wanted to add that it's also helpful to understand the difference between cash vs. accrual accounting when looking at your profits. Most small businesses use cash accounting (you report income when you receive it and expenses when you pay them), but if you're doing accrual accounting, your profit calculation might look different because it includes money you've earned but haven't collected yet. Also, don't forget that your Schedule C profit affects your quarterly estimated tax payments for the following year. If this is your first profitable year, you'll likely need to start making quarterly payments to avoid penalties. The IRS expects you to pay as you go, not just once a year at tax time. One more thing - keep really good records of your business expenses throughout the year. I use a simple spreadsheet to track everything monthly, which makes tax time so much easier and ensures I don't miss any legitimate deductions that could reduce that profit number on line 31.