Just wanted to chime in as someone who made this transition a couple years ago! The advice about setting aside 25-30% is solid, but don't forget about state taxes if you're in a state that has them - that percentage might need to be higher depending on where you live. One thing that really helped me in the beginning was using the IRS withholding calculator (https://www.irs.gov/individuals/tax-withholding-estimator) after my first few freelance gigs. You can input both your W2 income and estimated freelance income, and it'll tell you if you need to adjust your W4 withholding at your main job or make quarterly payments. Also, since you mentioned TurboTax - they have a pretty good quarterly tax calculator tool that can help you figure out those estimated payments once you get a few paychecks under your belt. The key is not to stress too much about getting it perfect the first year - you're learning a new system and the IRS understands that. Just make sure you're setting aside something from each freelance payment and you'll be in much better shape than most people starting out! Good luck with the film work - it's such a fun industry to freelance in!

One thing I haven't seen mentioned yet is the importance of getting an EIN (Employer Identification Number) for your freelance work, even if you're a sole proprietor. While you can use your SSN, having an EIN makes you look more professional when clients ask for tax documents, and it adds a layer of privacy protection. You can apply for an EIN online directly through the IRS website for free - it literally takes about 10 minutes and you get it immediately. Some clients prefer working with freelancers who have EINs, and it makes the whole W-9 process smoother. Also, since you're in film production, consider joining relevant professional organizations like your local film commission or industry groups. The membership fees are tax-deductible business expenses, and they often provide valuable networking opportunities that can lead to more work. Plus, some offer resources or workshops on freelance business practices that could help with the tax and business side of things you're navigating. The learning curve feels steep at first, but once you get through your first year of managing both income sources, it becomes much more routine. You've got this!

Great question! I went through this same decision last year when my taxes got more complicated with rental income. Here's what I learned from interviewing several professionals: The biggest practical difference is that EAs eat, sleep, and breathe taxes year-round, while many CPAs have broader practices. When I called CPAs in July with a tax question, half of them said "call back in January." The EAs I contacted were ready to help immediately. For your situation with a new side business, either credential works, but I'd suggest asking specific questions like: "How many Schedule C returns do you prepare?" and "What business deductions should I be tracking?" The answers will tell you way more about their expertise than their letters after their name. One thing to consider - if your side business grows, you might eventually need business accounting services, financial planning, or help with business structure decisions. CPAs can grow with you into those areas, while EAs stay focused on the tax side. Cost-wise, I found EAs were generally 15-20% less expensive in my area for basic tax prep, but the range varies a lot based on experience and location.

One thing I'd add that hasn't been mentioned much - consider looking at reviews and asking about their technology setup. Some older practitioners (both CPAs and EAs) still work mostly with paper and may not be as efficient or responsive. I switched to a younger EA last year who uses secure client portals, electronic signatures, and responds to questions via email within hours rather than days. The credential mattered way less than having someone who made the whole process smooth and modern. For your side business situation, also ask upfront about their process for quarterly estimated tax payments. Since you'll likely owe taxes on that business income, you want someone who will proactively help you set up payments to avoid penalties, not just handle it once a year at filing time. The best professional is one who thinks ahead about your situation rather than just filling out forms!

One thing nobody's mentioned - if you decide to claim it as a business expense, make sure you're only using it for business purposes! If you're making coffee for your family or personal use, you'll need to adjust the deduction percentage accordingly. IRS isn't stupid and they know nobody buys a fancy espresso machine JUST for work.

As someone who's been through multiple IRS audits with my consulting LLC, I'd strongly recommend being very conservative with equipment like this. The $4,200 price point is going to raise eyebrows - I've seen auditors question much smaller equipment purchases for home offices. If you do proceed, document EVERYTHING. Keep a log of every business use (client calls, video shoots, editing sessions), take photos showing it in your dedicated workspace, and consider getting it appraised to establish fair market value. The burden of proof is on you to show legitimate business purpose. Honestly though? For that price, you might want to consider a commercial-grade machine around $1,500-2,000 instead. Still high quality for your needs, but much easier to defend as "ordinary" for a video production business. Sometimes the peace of mind is worth more than the extra features.

Just a heads up - if you received a check over $600, the settlement administrator will likely send you a 1099-MISC form reporting the payment to the IRS. So even if you're unsure about taxability, the IRS will know about the money. If you disagree with how it's reported on the 1099, you'll need documentation to support your position that some/all is non-taxable. I learned this the hard way with another settlement!

I went through something similar with a different class action settlement last year. The key thing that helped me was calling the settlement administrator directly - they were actually really helpful in explaining exactly what each portion of the payment was for. In my case, they broke it down like this: part was reimbursement for the cost difference between the defective airbag and a proper replacement (not taxable), and part was compensation for the inconvenience and potential safety risk (taxable). The administrator also told me that if the settlement was over $600, they'd automatically send me a 1099 form, but they said I could still exclude the non-taxable portions when filing my return as long as I had proper documentation. I'd definitely recommend getting that breakdown in writing from them before tax season hits. It made my filing so much cleaner and I felt confident I was handling it correctly.

Another thing to consider is that some states automatically issue you a refund even if you don't file! In my state, if your W-2 withholding info is reported to them and it shows you overpaid, they sometimes just send you a check. Happened to me 2 years ago.

I went through this exact same dilemma last year! Here's what I found out after doing some research: if you don't file when the state owes you money, there's typically no penalty at all. The worst that happens is you forfeit your refund after the statute of limitations runs out (usually 3-4 years). However, I'd recommend double-checking a couple things first. Make sure you're not actually required to file in your state regardless of refund amount - some states have mandatory filing thresholds based on income. Also, if you have any estimated tax payments or credits you're not accounting for, you might owe more than you think. One trick I learned: some tax software lets you prepare your return completely for free, then only charges if you actually file. So you could double-check your calculations without paying anything. If it confirms you're only getting $11 back and filing costs $15, then yeah, skip it and pocket the difference!