Do you need to keep actual logs? I thought the apps tracked your miles automatically?

You definitely need your own logs or a dedicated mileage tracking app. While Uber and Lyft do track some miles, they only count miles when you have a passenger in the car, not all your business miles. The IRS allows you to deduct ALL business miles, including miles driven while waiting for a ride request and miles driving to pick up passengers. Those additional miles can easily double your deduction, but the rideshare apps won't track them for tax purposes.

Legally, you're required to report ALL income regardless of amount or whether there's a 1099. While it's true the IRS might not immediately know about that specific $400, tax evasion is never worth the risk. The rideshare companies keep records of all payments, and the IRS can request those during an audit even without a 1099. Plus, if you're audited for any reason and they discover unreported income, you'll face penalties and interest that will cost far more than any tax you might save by not reporting it. Always better to stay on the right side of tax law!

This is so important! The tax prep companies are super sneaky about this. They advertise "free" filing everywhere but then hit you with fees at the very end. I almost fell for this too until someone told me about going through the IRS site directly. Does anyone know if there's an income limit for the Free File options? And does unemployment income count toward that limit?

The income limit for most IRS Free File options is $73,000 in Adjusted Gross Income (AGI). And yes, unemployment benefits do count toward that limit since they're considered taxable income. However, even if your income is above that threshold, the IRS still offers Free Fillable Forms which are electronic versions of paper forms - though they provide no guidance, so they're best if you're comfortable doing taxes yourself. Also worth noting that some Free File providers have lower income limits or age restrictions, so you need to check each one's specific requirements through the IRS portal to find your best option.

I used Cash App Taxes this year and it was surprisingly good for being completely free! It handled my unemployment and some freelance work without issues. The interface isn't as polished as TurboTax, but it asks all the same questions and I got the same refund amount when I compared them. Only downside is that it doesn't import as many forms directly - I had to manually enter some information. But for literally saving $100+ compared to TurboTax, I can spend an extra 15 minutes typing.

Thanks for the feedback! That's really helpful - I don't mind spending a little extra time if it saves that much money. As long as it handles everything correctly, that's my main concern. Did you have any issues with state filing? That's where I usually run into problems.

The home energy efficiency credits (like for your mini splits) are non-refundable but can be carried forward for up to 5 years if you can't use the full amount in the installation year. So you don't lose it! But be careful - the rules are different for the clean vehicle credit. The used EV credit that OP mentioned ($4,000) cannot be carried forward, so if you don't have enough tax liability to use it all in the purchase year, you lose the remainder.

Thanks for that info! That's a relief - we only got to use about half of our mini split credit last year, so good to know we can apply the rest to this year's taxes. I didn't realize the EV credits work differently though. That's important for anyone planning to claim both in the same year to consider which one to prioritize if they won't have enough tax liability for both.

I actually did get documentation from the installer, but it doesn't specifically say anything about meeting IRS requirements or efficiency standards. It's just the invoice with model numbers and installation details. Is that going to be a problem? Should I be requesting something more specific from either the manufacturer or the installer?

How do you handle items that are partially personal and partially for business? Like if I get a pedicure and use it both for content but also just for personal reasons?

You need to calculate a reasonable business-use percentage. For example, if you get a pedicure primarily for content creation but also enjoy it personally, you might deduct 70-80% as a business expense. The key is being reasonable and consistent with your approach. If you're using something like a cell phone for both business and personal, you'd calculate what percentage is business use. Same with internet, clothing items, or beauty treatments. Just be prepared to explain your calculation method if ever questioned. And always keep good records showing the business purpose of each expense.

Yes! I use an independent CPA (not one my family knows) and just say I'm a "digital content creator" or "online media producer." They know what questions to ask about expenses and deductions without needing specific details about the content. Just find someone who works with a lot of social media people and online businesses.

That's interesting because it contradicts what others are saying. So if I understand correctly, either I should: 1) Count the $250 gift card as taxable income AND deduct the full $290 expense, or 2) Not count the gift card as income AND only deduct the $40 I paid. Is that right? Which approach would be better for my situation?

You've got it exactly right - those are the two consistent approaches. If you're asking which is better, it typically depends on your specific tax situation. Option 1 (count card as income + full deduction) usually works better for businesses with significant expenses and deductions already, as the additional deduction value ($250) would likely exceed the tax impact of the additional income. This is especially true if you have business losses or are in a low tax bracket. Option 2 (no income + partial deduction) is generally simpler and often preferred for smaller side businesses or if you're in a higher tax bracket where additional income could push you into a higher rate. Since promotional gift cards are generally not considered taxable income, this approach is administratively easier and avoids potentially triggering an unnecessary audit flag.

Credit card points are generally treated differently than promotional gift cards. The IRS typically views credit card rewards as rebates on purchases you've already made (which is why they're not taxable income). So if you redeem points for a business purchase, you can only deduct your actual out-of-pocket cost after the points are applied. But it gets more complicated if you're using a personal credit card for business purchases and then using the reward points for business items. You might need to allocate the value of the points based on what percentage of your card spending was for business vs. personal.