I went through this same problem last year! Tax laws are so confusing... I used TurboTax Free Edition and it walked me through everything. Since your income is under $12k, you should qualify to file completely free. Just make sure you go directly through the IRS Free File program so you don't get upsold on paid services.

I've been helping people with tax questions for years, and yes, you absolutely need to file. Unemployment compensation is 100% taxable income at the federal level, regardless of the amount. The $12,000 filing threshold doesn't apply when you have unemployment income - it's always reportable. The silver lining is that with your low total income ($11,230), you'll likely qualify for the Earned Income Tax Credit (EITC) which could actually get you money back even though you didn't have taxes withheld. The EITC is designed to help working people with low to moderate income, and your W-2 wages of $650 plus the $180 contractor work should qualify you. Also, don't forget about the standard deduction of $13,850 for 2023. Your income is actually below that threshold, so you might not owe any federal tax at all, but you still need to file to report the unemployment and claim any credits you're eligible for. I'd recommend using the IRS Free File program since your income qualifies you for completely free tax preparation software. Don't let anyone charge you for filing with your income level!

What mileage tracking app do you guys recommend? I'm terrible at remembering to log my trips.

Just want to add another perspective here - I'm a tax preparer and see this situation all the time. The key thing that trips people up is understanding what constitutes a "principal place of business." The IRS looks at two main factors: (1) where you spend the most time conducting business activities, and (2) the relative importance of the activities performed at each location. Even if you spend more time at client sites doing the actual service work, if your home office is where you do the administrative and management activities that are essential to your business (scheduling, bookkeeping, client communications), that can still qualify as your principal place of business. StarSailor, based on what you've described - doing all your scheduling, client calls, and paperwork from a dedicated home office - you should be good to go for the mileage deduction. Just make sure you're consistent about using that spare bedroom exclusively for business and keep good records of both your mileage and your home office use. One more tip: consider also claiming the home office deduction itself! If you're using that spare bedroom exclusively for business, you can deduct either actual expenses (percentage of utilities, rent/mortgage interest, etc.) or use the simplified method ($5 per square foot up to 300 sq ft). Many people miss this additional deduction.

The key thing missing from this whole conversation is the home office deduction. If u have a qualifying home office, then u can deduct miles from home to work sites because ur traveling from one business location to another. Without a qualifying home office, ur always "commuting" to the first location. So before worrying about vehicle deduction, make sure u have a legitimate home office (used regularly and exclusively for business). My accountant verified this saved me like $3800 last year on my taxes.

Great discussion everyone! As someone who's been self-employed for 5 years, I want to emphasize something that really helped me understand this: think of it as WHERE your business day starts, not what kind of vehicle you have. If you work from home (with a qualifying home office), your business day starts at home - so driving to clients/jobs is business travel. If you rent office space or have a shop, your business day starts there - so driving TO that location is commuting, but driving FROM there to other business locations is deductible. The "100% business vehicle" thing is a red herring - it just means you use that vehicle only for business purposes (never personal trips). It doesn't magically turn commuting miles into business miles. The IRS cares about the PURPOSE of the trip, not the vehicle. One more tip: if you're borderline on whether your home office qualifies, it's worth consulting a tax professional. The deduction potential is huge, but the IRS requirements are specific and strictly enforced.

Just wanted to add that timing matters for when you can claim these benefits! For special needs adoptions, the credit is available in the year the adoption is finalized. But employer benefits can sometimes be available earlier - like during the "placement" period before finalization. If your employer offers benefits for expenses during placement, you might be able to get some financial help sooner. Check your employer plan details. Then when you finalize the adoption, you can claim the full tax credit regardless of expenses (for special needs adoptions). Also, if you can't use the full adoption credit in one year because your tax liability is too low, remember the credit can carry forward for up to 5 years. Super helpful for many adoptive families!

This is such valuable information, everyone! As someone who works with adoptive families regularly, I want to emphasize how important it is to understand that special needs adoptions from foster care are treated differently than private adoptions for tax purposes. The key distinction is that "special needs" for tax purposes doesn't necessarily mean the child has disabilities - it means they meet certain criteria that make them harder to place (like age, ethnicity, sibling groups, or medical conditions). Most children adopted from foster care qualify as "special needs" for tax purposes. One additional tip: Make sure you get proper documentation from your adoption agency or state that confirms the special needs designation. You'll need this for your tax filing. The IRS can request this documentation, so keep it with your tax records. Also, don't forget that if you adopt siblings, you can claim the full credit amount for EACH child - so potentially over $30,000 in tax credits for two children, plus whatever your employer benefit provides. It's really significant financial support that can help offset the costs and lost income during the adoption process.

I'm confused about something - if you're a foreign investor, shouldn't you be filling out a W-8BEN rather than a W-9? W-9 is generally for US persons while W-8BEN is for foreign persons to claim treaty benefits and establish foreign status.

This is a really important distinction that everyone should pay attention to! As a foreign investor, you should definitely be using Form W-8BEN, not W-9. The W-9 is specifically for U.S. persons (citizens, residents, etc.), while W-8BEN is designed for foreign individuals to establish their foreign status and claim any applicable tax treaty benefits. Using the wrong form is probably what triggered the backup withholding in the first place. When you submit a W-9 as a foreign person, the broker's system sees a mismatch between your foreign status and the domestic tax form, which automatically flags your account for withholding. I'd recommend calling your broker to clarify which form they actually need from you. If you're truly a foreign investor, switching to the correct W-8BEN form might not only stop the future withholding but could also reduce your overall tax burden if there's a tax treaty between your country and the U.S. This could save you a lot of headache (and money) going forward!