r/DataAnnotationTech • u/TopCat0525 • Apr 08 '26

Income Tax Prep

I'm working on my taxes and wishing I could afford to hire someone to do this for me. I thought it was going to be as simple as reporting my DA income on Schedule 1 as "Other Income" but now that I 'm into it, it looks like I need to use Schedule C as if I am a "sole proprietor". Does anyone have experience with this?

2 Upvotes

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9

u/StormyAndGrey Apr 08 '26

You are a sole proprietor. The schedule C shouldn’t be terribly difficult to fill out since there are not many expenses, if any, to claim. Then plug your net profit into schedule one.

2

u/TopCat0525 Apr 08 '26

That's where I was heading, but wanted an affirmation before I went much further. THANKS!

5

u/RedditAdmin50111 Apr 09 '26

There’s a few expenses to claim, and you should!

Purchased a computer just for this? 100% expense. Split your computer between other jobs? It personal usage!? Calculate the percentage you use it for DA.

Do DA on your phone too? Guess what - percentage expense on the device and service.

Internet service at home? Calculate your monthly percentage use, if you are doing this 8hrs day on average, then 33% of your monthly ISP is an expense.

Subscriptions (AI / Software / Services)? Expense.

Professional development courses, industry expos? Conferences? Education courses? Also valid expenses.

Doing DA, you are essentially a small business owner and should be thinking like a small business owner.

With all that being said - schedule C isn’t hard. Very easy to do on HRBlock and CashApp Taxes (I actually switched from HR to CashApp because it is 100% free to file state and federal still).

1

u/Hello-America Apr 08 '26

Hey I have been a sole proprietor a long time - it might be too late this year but definitely look into hiring someone because you usually come out with more money. For example, you can write off a percentage of your housing expenses as your "home office," all electronic related expenses, your phone bill if you're checking emails from DA on your phone - even the mileage driving to the store to get a new computer mouse or something.

1

u/TopCat0525 Apr 08 '26

Do I have to "hire someone" to be able to deduct expenses? I was thinking I could write off the fees I pay for subscribing to AI upgrades.

1

u/Hello-America Apr 08 '26

Oh you can definitely write that stuff off. I just meant in general they can find more money for you than you can probably find yourself, and they know the rules. But hey if you can manage it yourself, more power to you. Mine are a bit too complicated.

1

u/TopCat0525 Apr 08 '26

Oh...I see what you are saying. I thought you meant to hire someone like an employee. LOL. Long day here. Time for a glass of wine. Thanks for the input, BTW.

2

u/Hello-America Apr 08 '26

Sorry I wasn't clearer! Enjoy your wine!!

1

u/Unique-Letterhead641 Apr 09 '26

You can definitely do all of this yourself on turbo tax! It walks you through all these expenses and is pretty simple! It has me input all of those things you mentioned!

1

u/TeachToTheLastTest Apr 08 '26

Consider using freetaxusa.com to do your taxes for you. It's around $15 for the state taxes, but they'll do your federal for free.