Since you have a sole proprietorship return, you should use TurboTax Home & Business (CD/Download) or TurboTax Self-Employed (online).
- Since you work part of the year in both NC and WA, you will have to file a part-year resident return for NC. [As you know, WA does not have a personal income tax.]
- It's good to have an EIN, but not necessary for a sole proprietorship. It will come in handy if you decide to become an S-Corp in the future.
- "Labor of Love" is OK! However, if you don't show a profit for 3 out of 5 years, the IRS may consider your business a "hobby" and you would be able to only deduct expenses up to the business income.
- If you have business income you should be reporting the income on your tax return (as well as your expenses). Charitable donations, even if made by your business, are deducted on the 1040 return (Schedule A), not Schedule C.
You should continue on with the Home & Business edition. Best of luck with your jigsaw puzzles!!!
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