If the letter specifically mentions a credit, you're likely in good shape! The IRS usually processes these automatically within 2-4 weeks if your address and banking info are current. Just keep an eye on your mailbox or bank account. If nothing shows up after a month, that's when I'd call or check online. The waiting is the worst part but at least you're getting money back instead of owing them!

The IRS credit letter is actually pretty straightforward - it means you have money coming your way! This usually happens when you've overpaid taxes through withholding, estimated payments, or if you're eligible for refundable credits. The good news is that most of these credits are processed automatically within 21 days if you have direct deposit set up, or 6-8 weeks for a paper check. Just make sure your contact info is current with the IRS. If you want to track the status, you can use the "Where's My Refund" tool on irs.gov with your SSN and the refund amount from the letter.

I went through the exact same transition last year! The lack of year-over-year comparison was definitely frustrating at first, but honestly it's a small price to pay for the massive cost savings. One thing I found helpful was creating my own simple spreadsheet with key numbers from both years (AGI, total tax, refund amount, major deductions) so I could still see the changes. Takes maybe 10 minutes but gives you that comparison view you're missing. Also, pro tip for next year - make sure to actually file through FreeTaxUSA this time so you'll have the automatic carryover for 2025 taxes. The transition year is always the roughest, but after that it gets much smoother. You made the right choice switching - I've saved over $200 in fees since making the jump!

I had the exact same experience when I switched from TurboTax to FreeTaxUSA two years ago! It's definitely frustrating not having the automatic carryover for that first year, but you're absolutely right that the cost savings make it worthwhile. One thing that helped me was keeping my TurboTax account active (but not paying for filing) just so I could reference my previous year's return when needed. You can still view your old returns there even if you don't file new ones. The manual entry process gets much faster once you're familiar with FreeTaxUSA's interface. I actually prefer their straightforward approach now compared to TurboTax's constant upselling and flashy distractions. And like others mentioned, next year you'll have the automatic data carryover working properly since you'll be filing through FreeTaxUSA this time. Stick with it - the learning curve is worth it for the money you'll save!

Sorta related - what software are you guys using to track all this stuff? I've been using a spreadsheet but it's getting unwieldy with all the different categories and percentages.

As someone who just went through my first year of self-employment taxes for my woodworking business, I wanted to add a few things that caught me off guard: 1) **Quarterly estimated taxes** - If you're making decent money on Etsy, you'll likely need to pay quarterly estimated taxes to avoid penalties. The IRS expects you to pay as you earn, not just at year-end like with W-2 income. 2) **Self-employment tax** - This was a shock! On top of regular income tax, you'll owe self-employment tax (about 15.3%) on your net business income. This covers Social Security and Medicare that your old employer used to pay half of. 3) **Business bank account** - Open a separate business checking account even if you're just a sole proprietor. It makes tracking so much easier and looks more professional if you ever get audited. 4) **Mileage tracking** - Don't forget to track mileage to lumber yards, craft fairs, shipping stores, etc. At 65.5 cents per mile for 2023, this adds up fast. The good news is your first year is a learning experience, and it gets easier once you have systems in place. Just keep every receipt and document everything!

Emma, you're definitely not alone in feeling overwhelmed by the S-Corp complexity! I went through the exact same confusion when I first made the switch from Schedule C about 3 years ago. One thing that really helped me was setting up a simple monthly routine to stay organized. I track my business income and expenses monthly, then calculate what my salary should be based on that rolling average. This helps avoid the year-end scramble of trying to figure out the right salary-to-distribution split. For your revenue level of $187k, you're probably looking at somewhere in the $75k-$110k salary range depending on your industry and location. The key is being able to document why your salary is reasonable - save job postings for similar roles, salary surveys, or industry reports that support your decision. One mistake I made early on was not keeping detailed records of my reasonable compensation analysis. Now I maintain a simple spreadsheet each year with comparable salaries I found and my reasoning. It gives me confidence that I can defend my position if ever questioned. Also, don't stress too much about getting everything perfect in year one. The IRS understands there's a learning curve, and as long as you're making a good faith effort to pay reasonable compensation, you'll be fine. Focus on getting the basics right and refining your approach as you gain experience.

Emma, I totally understand your confusion! I made the S-Corp election about 2 years ago for my marketing consulting business and went through the exact same overwhelm. The good news is that once you get the basics down, it becomes much more manageable. Here's what I wish someone had told me when I started: Don't overthink the reasonable compensation piece too much in your first year. For consulting work at your revenue level, somewhere between 50-65% as salary is generally defensible. I started at 60% and adjusted from there based on industry research. For payroll frequency, quarterly is absolutely fine for a single-employee S-Corp. I use Gusto (like Malik mentioned) and it makes quarterly payroll super simple. You'll still need to make tax deposits monthly or semi-weekly depending on your liability, but the actual payroll processing can definitely be quarterly. One thing that really helped me was joining a Facebook group called "S-Corp Owners" where people share real experiences and strategies. It's much more practical than the generic tax advice you find online. The complexity does ease up once you get through your first year and establish good systems. Don't be afraid to invest in a good S-Corp specialist accountant for at least the first year - it'll save you way more in avoided mistakes than it costs.

Anyone else notice that TurboTax doesn't update the amount you owe until the very end? I'm doing my taxes right now for my side gig and I've added like $5K in legitimate business expenses and the amount at the top hasn't changed at all. I'm pretty sure it's just how the software works - it finalizes everything at the end.

Hey Lena! I went through this exact same confusion last year with my freelance income. The key thing to understand is that TurboTax processes everything in stages, and that running total at the top can be really misleading. Your 1099-NEC income first gets reported on Schedule C where you can deduct business expenses. Then the net profit from that schedule flows to your main tax return where it gets hit with self-employment tax (the 15.3%). After that, your adjusted gross income gets reduced by the standard deduction, but only for regular income tax purposes. So you're actually dealing with two separate taxes: self-employment tax (which the standard deduction doesn't touch) and regular income tax (which it does reduce). That's why you might not see the numbers change right away when you select the standard deduction. Don't stress about the running total until you complete the entire return. TurboTax finalizes all the calculations at the very end, and that's when you'll see the real impact of your deductions. I was panicking last year thinking I owed way more than I actually did until I got to the final summary screen.