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I know you said you're not self-employed, but if you ever do any side work (even small gigs), you might qualify for partial home office deductions. I'm mainly a W-2 employee but I do some consulting on weekends, and I'm able to deduct a portion of my home office expenses against just that side income. Worth considering if you have any 1099 work at all.
How do you calculate the right percentage to claim? Is it based on income split, hours worked, or something else?
You calculate it based on the square footage of your office space divided by your total home square footage. So if your office is 100 square feet in a 1,000 square foot apartment, you'd get a 10% deduction of eligible expenses. It's not based on income or hours worked at all. The more complicated part is that you can only deduct expenses against your self-employment income. So if your freelance work only brings in $2,000 but your deductible home office expenses would be $3,000, you're limited to deducting $2,000. The calculation can get a bit tricky but most tax software walks you through it.
Maybe check with your HR department? Some companies offer a home office stipend or reimbursement program for remote workers. My company gives us $500/year for home office equipment. Not a tax thing but better than nothing!
11 I've been using the "Multiple Jobs Worksheet" on the W4 form itself and it's been pretty accurate for me. Make sure you're using the newest version of the W4 (they redesigned it in 2020). The old form used to use "allowances" but the new one is much more straightforward. If you and your spouse both work, or if you have multiple jobs, definitely fill out Step 2. And don't forget about any additional income like investments or side gigs in Step 4.
1 Thanks for mentioning this! I completely forgot about the worksheet that comes with the form. Is it really accurate though? I've heard mixed things.
11 I've found it to be surprisingly accurate for straightforward situations. I have two W-2 jobs with similar pay levels and following the worksheet got me within $200 of breaking even last year. Where it gets less reliable is if you have more complex situations like self-employment income, substantial investment earnings, or major deductions outside the standard deduction. In those cases, the IRS Tax Withholding Estimator or one of the other tools mentioned here would probably work better.
15 Just a heads up that even with the best calculations, your withholding probably won't be perfect. I aim for a small refund (around $500) as a buffer rather than trying to hit exactly zero. That way if I made a small error or something unexpected happened, I'm not scrambling to pay a bill in April.
19 This is great advice! I used to try to get it exactly right but would stress when I ended up owing even $100. Now I just aim for a small refund too and it's much less stressful.
Just a tip from someone who used to work at the IRS - if you mail anything important to them, ALWAYS use certified mail with return receipt requested. And make copies of EVERYTHING before you send it. It's sadly common for mailed returns to get lost in the massive processing centers. If you mail in your return again, make sure to write "COPY - ORIGINAL SENT [DATE]" in red at the top of each page. That helps prevent it from being processed as a duplicate filing. Also, something most people don't know - you can make an appointment at your local IRS Taxpayer Assistance Center instead of calling. Google "IRS TAC appointment" and you can often get in within a week or two.
Thanks for this advice! I didn't know about the Taxpayer Assistance Center option. Do I need to bring anything specific to the appointment? And will they be able to tell me if my return was received even if it's not showing up in their system yet?
Bring a copy of your tax return, your certified mail receipt, photo ID, and any other correspondence you've had with the IRS. These in-person representatives can access different systems than the phone reps sometimes can, so they might be able to locate your return in a different status or location. They can also initiate a formal trace on your return using your certified mail information, which is much more effective than trying to do it over the phone. If they can't find it, they can help you submit a replacement return properly marked so it doesn't create issues. The in-person help is seriously underutilized but much more effective.
Has anyone tried faxing the IRS? I was in a similar situation last year and ended up faxing a copy of my return with a cover letter explaining that it was previously mailed. I got confirmation they received it within about 2 weeks, and my refund started processing after that. Just make sure to write "DUPLICATE - ORIGINAL MAILED ON [DATE]" on every page.
That's actually a smart idea. What fax number did you use? I didn't even know the IRS accepted faxes for tax returns.
7 Quick tip from someone who's been filing with 1099 income for years: track EVERYTHING. Mileage to meet clients, internet bills, office supplies, software subscriptions, professional development courses, etc. I use a separate credit card for all business expenses to make it easier at tax time. And don't forget about quarterly estimated tax payments! The IRS expects you to pay taxes throughout the year when you're self-employed, not just at filing time. I learned this the hard way my first year and got hit with penalties.
16 Do you have a recommendation for tracking mileage? I sometimes drive to client sites and I'm terrible at remembering to log it.
7 I use MileIQ for tracking mileage - it runs in the background on your phone and automatically detects drives. You just swipe left for personal trips and right for business trips. Super easy and creates IRS-compliant records. For quarterly taxes, I set aside 30% of every payment I receive into a separate savings account. That usually covers both federal and state taxes, plus the self-employment tax. Then I make payments online through the IRS Direct Pay system every quarter.
2 One important thing nobody's mentioned yet - if you're making decent money on your 1099 work, consider setting up a Solo 401(k) or SEP IRA. You can contribute WAY more than regular employees can to a standard 401(k), which can significantly reduce your taxable income. I put about 20% of my 1099 income into my Solo 401(k) last year and it saved me thousands in taxes while building my retirement. You can open one at most major brokerages like Fidelity or Vanguard pretty easily.
11 This is great advice! Does the Solo 401k have the same contribution limits as a regular 401k? And can I still contribute to my Roth IRA too?
Malik Johnson
I'm going to go against the grain here - I think it's worth learning to do your own taxes! I'm 26 and I've been doing mine since I was 18. The first few years were stressful, but now I actually enjoy the process (I know, I'm weird). The key for me was to learn gradually. I started with the super basic returns using free software. Then each year, I'd research ONE new tax situation that applied to me (investments, side income, education credits, etc). That way I wasn't overwhelmed trying to learn everything at once. Now I actually feel empowered knowing exactly where my money goes and why. Plus I've saved thousands not paying preparers over the years.
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Isabella Ferreira
ā¢Did you ever make any big mistakes during those learning years? That's my biggest fear.
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Malik Johnson
ā¢I made one significant mistake my third year doing taxes. I messed up reporting some stock sales and ended up paying about $600 more than I needed to. I only discovered it two years later when I was learning more about capital gains. The good news is most tax software now has really strong error checking. The review process will flag anything unusual or incomplete. The key is to start early so you have time to research anything that seems confusing. Don't wait until April 14th when you're rushed and stressed!
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Ravi Sharma
Learning to do taxes took me basically forever lol. I'm 31 and still Google basic tax questions every April. My strategy is just to use TurboTax and answer all their questions honestly. Is that technically "knowing how to do taxes"? ĀÆ\_(ć)_/ĀÆ
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Freya Thomsen
ā¢Do you think TurboTax is worth the money? I've been using the free options but wondering if paying for the deluxe versions actually helps.
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