Can you deduct a home office if you're only doing this 1099 work part time? I use my spare bedroom for my freelance design work but it's not my main job.

Yes, you can still claim a home office deduction for part-time self-employment work. The key requirement is that the space must be used "regularly and exclusively" for your business activities. If your spare bedroom is used solely for your freelance design work and not for other purposes, you can deduct it. You have two options: the simplified method (currently $5 per square foot up to 300 sq ft) or the regular method where you calculate the actual expenses based on the percentage of your home used for business.

Would that be better than just using a Roth IRA? I thought those had better long-term tax benefits.

That's an interesting angle I hadn't considered. This is my first time doing seller financing, but I do have two other rental properties that I might sell in the next few years. Would doing just 2-3 of these transactions be enough to qualify as a business? Or would I need to do this more regularly?

Just 2-3 transactions over several years would probably not be enough to qualify as being in the lending business. The IRS would likely view that as investment activity rather than a business. To be considered a business, you'd typically need to show more regular activity and perhaps even advertise your services or create a formal business structure. Most people who do occasional seller financing end up treating it as investment activity and reporting it on Schedule B with the associated expenses offsetting the interest income. If you were doing multiple loans per year and actively seeking out opportunities to provide seller financing, that might cross the threshold into business territory.

I've done seller financing for several properties and found that H&R Block's premium version handled it better than TurboTax. It specifically asked about loan origination costs and gave clear guidance on amortizing them over the loan term. It also had a specific section for investment expenses related to interest income.

Actually that $12,950 figure is outdated. For 2025 the filing threshold for dependents with earned income is estimated to be around $13,850 due to inflation adjustments. But you're right about the general point - many teen workers won't hit the filing requirement.

Thanks for the correction! You're right that the numbers adjust each year with inflation. The important thing for the original poster to understand is that there's a threshold below which filing isn't required, but that doesn't change the need to complete the W4 accurately for employer withholding purposes.

I tried using it but got super confused by all the questions. Maybe I'm not tech savvy enough but it seemed to assume I knew a lot of tax terminology already. Ended up just taking my best guess on the W4.

Yes! I've been self-employed for years. The basic rule is if you expect to owe $1,000+ in taxes, you should make quarterly payments. Use Form 1040-ES to calculate. The easiest method is to take your total expected tax for the year, divide by 4, and pay each quarter. Due dates are April 15, June 15, Sept 15, and Jan 15 of the following year. I personally set aside 30% of all my freelance income in a separate savings account to cover both income tax and self-employment tax (15.3% for Social Security/Medicare). That way I'm never caught short when payments are due!

Thanks so much! I didn't realize the cutoff was only $1,000 - I'll definitely hit that. Is there a penalty if I miss the first quarter payment but make the rest on time? I'm just learning about all this now. I love the idea of setting aside 30% in a separate account - that makes so much sense. Will definitely be doing that going forward. Do you use any specific software or just calculate it manually with the 1040-ES?

Extensions only give you more time to FILE, not more time to PAY. So you still need to estimate and pay what you think you'll owe by the regular April deadline, or you'll face penalties and interest. I file extensions most years because I have some investments that don't get their paperwork out until late March, and it's super easy. Just file Form 4868 - can do it online through IRS Free File or most tax software. It gives you until October 15 to file the actual return.

Thanks for the mileage tip! Does that work if I'm driving to these coffee shops where I do my contract work? Also, I'm on my parents' health insurance still (I'm 24) - does that disqualify me from any health insurance deductions?

Driving to coffee shops can be deductible if they're not considered your principal place of business. If you primarily work from your home office and occasionally go to coffee shops for a change of scene or specific tasks, those trips might qualify as business travel. Keep a detailed log of these trips including date, starting point, destination, purpose, and miles driven. Regarding health insurance, since you're covered under your parents' plan and not paying the premiums yourself, you wouldn't be eligible for the self-employed health insurance deduction. That deduction is specifically for self-employed individuals who pay for their own health insurance policies.

This is such a weird and unhelpful comment. OP asked specifically about deductions, not business growth advice. Why not just answer the question that was asked instead of changing the subject?