I was in your exact situation last year! One thing nobody mentioned yet - if you made over $12,000, you might benefit from setting up an S-Corp in the future. I stayed as a sole proprietor for my first two years but once I hit around $40k in profit, my accountant had me switch to save on self-employment taxes. Not worth it at your current income level but something to consider if your side gig grows. The paperwork and extra requirements are a pain though, so don't rush into it.

Don't stress too much about not having a "registered business" - you're already considered self-employed in the IRS's eyes! Since you made $12,400, you'll definitely want to file Schedule C with your regular tax return. The threshold for requiring Schedule C is just $400 in self-employment income. A few quick tips from someone who went through this exact situation: - Keep ALL records of payments, even Venmo/PayPal transactions - You can deduct software like Adobe Creative Suite, Canva Pro, etc. - If you bought any equipment this year (external monitor, graphics tablet, etc.), those are deductible too - Don't forget about the business use portion of your internet and phone bills Since you made over $400, you'll owe self-employment tax (about 15.3%) plus regular income tax on the profit. I'd recommend setting aside about 25-30% of what you made for taxes to be safe. And definitely start making quarterly estimated payments for 2025 if you plan to continue - it'll save you from a big tax bill next year! The whole process is way less scary than it seems. You've got this!

I think everyone is overcomplicating this. The Code R on 1099-R literally just means "Recharacterized IRA contribution." The IRS knows exactly what this is. You report it on your 2023 return (the year of the 1099-R) and move on. Box 2a is $0 because there's no taxable amount - it's just moving money from one type of IRA to another. TurboTax is suggesting an amendment because their software is designed to be extra cautious. But unless you're eligible for a traditional IRA deduction you didn't claim (which sounds unlikely given you have a 401k), there's no benefit to amending.

Just to add some clarity from the technical side - when you recharacterized your Roth IRA contribution to traditional before filing your 2022 return, you essentially treated it as if the contribution was always made to the traditional IRA. The 1099-R with Code R in 2023 is just the custodian's way of reporting that recharacterization transaction to the IRS. Since you did this before filing your 2022 taxes, your original return should have reflected the traditional IRA contribution (either as deductible or non-deductible depending on your income and workplace plan). The key question now is whether you properly reported that traditional IRA contribution on your 2022 return. If you didn't report it at all, you might need to file Form 8606 for non-deductible contributions to establish basis, but that's separate from the 1099-R Code R issue. The 1099-R itself goes on your 2023 return with no additional tax owed since box 2a shows $0 taxable amount.

Has anyone used the free IRS File Free option with just a 1098-T? Is it straightforward or should I just pay for TurboTax to make sure I get all the education credits right?

One important thing to keep in mind - even if you decide not to file because you have no income requirement, you should still keep all your education-related receipts and documents! If your parents are claiming you as a dependent, they'll need your 1098-T and any additional qualified education expenses (like required textbooks, lab fees, etc.) to maximize their education credits on their return. The credits can be worth up to $2,500 with the American Opportunity Credit, so make sure someone in your family is claiming them. Also, if you're not sure about your dependency status, have an honest conversation with your parents about it - sometimes students qualify to file independently even when parents assume they can claim them.

This is such a helpful thread! I'm dealing with the same confusion about CAFE 125 on my W2. One thing I'd add is that if you're ever unsure about how much you contributed to these pre-tax accounts during the year, most employers also include a breakdown in your final paystub of the year or in your benefits summary. It's really reassuring to know this is actually saving me money on taxes rather than costing me more. I was worried I had made some mistake during benefits enrollment, but sounds like these pre-tax deductions are actually one of the best tax benefits available to employees. Thanks everyone for the clear explanations!

You can actually calculate your tax savings pretty easily! Take your CAFE 125 amount and multiply it by your marginal tax rate. For example, if you contributed $3,000 to pre-tax benefits and you're in the 22% tax bracket, you saved about $660 in federal income tax ($3,000 x 0.22 = $660). Most tax software will also show you a comparison of what your taxes would have been without these pre-tax deductions when you're preparing your return. Some payroll systems even include this breakdown on your final paystub of the year - look for something like "tax savings summary" or "pre-tax benefit savings." It's definitely worth understanding these numbers because it can help you make better decisions during next year's open enrollment about how much to contribute to FSAs, HSAs, etc.

Thanks for this detailed comparison! I'm in a similar situation with multiple rental properties and have been dreading the switch from TurboTax, but your experience gives me confidence. The depreciation reporting issue you mentioned with CashApp is a dealbreaker for me - I need those comprehensive records for my accountant and potential audits. One question: did FreeTaxUSA handle the import of your rental property basis information correctly? I've got properties purchased in different years with various improvement costs that I'm worried about losing in the transition. Also really appreciate everyone sharing their experiences with the additional tools like taxr.ai and claimyr. The rental property depreciation tracking can get so complex, especially when you're dealing with improvements vs repairs classifications.

This is exactly the kind of detailed comparison I needed! I've been putting off switching from TurboTax because I wasn't sure how other platforms would handle my rental property depreciation. Your point about FreeTaxUSA generating comprehensive depreciation reports is crucial - I've learned the hard way that having proper documentation is essential when the IRS comes knocking. The import feature you mentioned sounds like a game-changer. I've got three rental properties with depreciation schedules going back several years, and manually re-entering all that data was my biggest concern about switching platforms. Quick question - did FreeTaxUSA handle any Section 199A deductions correctly for your rental income? That's another area where I've seen some of the cheaper platforms struggle compared to the more expensive options. Thanks for taking the time to write such a thorough review. Definitely going to give FreeTaxUSA a try this year!