It sure sounds like you had an interesting tax year. I know this can seem a bit overwhelming but this is something you can handle with the assistance if TurboTax, and if you feel it is a bit much, we offer our Full Service Product to prepare the return for you.
Let's address each area one at a time to make it seem like small items instead of 1 large one.
- The Consulting income: Yes, you can deduct expenses towards the income such as Home Office Deductions, Vehicle Expenses, supplies and other items ordinary and necessary to complete your business. The income and deductions will be reported on a Scheduled C and you will be required to pay regular tax as well as Self Employment Tax on the income after expenses. Since you kept good records of your income and expenses filling in the Schedule C should be pretty straight forward. Here is a great article on this topic for further clarification: Reporting Self Employed Income and Deductions
- Unemployment income is taxable to the Federal this year and each state has their own reporting requirements. If you did not have tax withheld, you may be subject to the tax on your return. Did you happen to pay any estimated tax payments based on your income that was not subject to withholding? If not, there is still time to make at least one Estimated payment. Estimated Tax Payment Information
- The best way to avoid a large tax bill will be a combination of making sure you have documented all of your expenses for the consulting business income and possibly paying an Estimated Payment before the end of the year.
