Could also be worth asking if she's part of a larger firm with specific policies or if she's independent. Different firms have different document retention policies. I've worked with H&R Block before and they never asked for copies of my SSN card, just needed to see it once to verify.

I'm a CPA and I can confirm that requesting copies of SSN cards is NOT standard practice in our industry. We need your SSN to prepare your return, but we don't need physical copies of the cards themselves. The IRS Due Diligence requirements for tax preparers focus on verifying identity through government-issued photo ID (like driver's license) and ensuring the SSN matches the taxpayer, but keeping copies of SSN cards isn't part of these requirements. Her explanation about "security issues" doesn't make sense from a professional standpoint. If someone tries to fraudulently use your SSN, having a copy of your card won't help prevent or resolve that situation. What WOULD help is proper data security practices on her end - encrypted storage, secure client portals, and following IRS Publication 4557 guidelines for data protection. I'd recommend asking her to provide written documentation of her firm's document retention policy and why specifically she needs copies rather than just verification. A legitimate tax professional should be able to explain their practices clearly and provide documentation of their security protocols.

Something else to consider: if your state offers income tax benefits for 529 contributions, make sure you understand how those work! My wife and I messed this up last year. We live in New York which gives a state tax deduction for up to $5,000 per year ($10,000 for married couples) for contributions to NY's 529 plan. We had my in-laws contribute directly to our son's 529, but then found out WE couldn't claim the state tax deduction because we weren't the ones who made the contribution! Would have been smarter to have them give us the money and then WE contribute it to get the tax benefit.

Congratulations on becoming a dad! The 529 planning can definitely feel overwhelming at first, but you're smart to start early. One thing that might help simplify the decision-making process is to think about it in stages rather than trying to figure everything out at once. For the immediate term, you and your wife can each contribute up to $18,000 annually without any paperwork hassles. That's $36,000 per year just from you two. Then each set of grandparents can also contribute their own amounts using the same limits. If someone wants to contribute more than $18,000 in a single year, that's when the 5-year election comes into play, but honestly, unless your family is planning to contribute huge amounts right away, you might not even need to worry about that complexity initially. My suggestion would be to start with a basic contribution plan that stays within the annual limits, get the account set up and running, and then tackle the more complex gifting strategies later as your daughter gets older and your family's financial situation evolves. The most important thing is getting started - you can always adjust the strategy as you learn more!

One thing nobody mentioned is that if you claim your baby, you might qualify for Head of Household filing status which has better tax rates than filing Single. You need to provide more than half the cost of keeping up the home where your child lives. In my situation, I was the lower earner but by claiming our baby and filing HOH, I saved way more than my higher-earning partner would have saved by claiming her. Just another factor to consider when you're figuring this out - don't just look at the child tax credit alone!

This is such a common situation for unmarried couples! I went through something similar last year. A few key things to consider beyond what others mentioned: Since your boyfriend is self-employed, he can also potentially benefit from the Additional Child Tax Credit if his tax liability gets reduced to zero - this credit is refundable unlike the regular Child Tax Credit. With his business expenses and the child-related credits, he might end up with a nice refund. Also, don't overlook childcare expenses if either of you paid for daycare or a babysitter so you could work. The Child and Dependent Care Credit can be worth up to $1,050 for one child, and whoever claims the child gets this benefit too. One strategy some couples use: run a quick calculation using tax software both ways before filing. Most programs let you play with different scenarios. Enter all your info twice - once with you claiming her, once with him claiming her - and see which gives your household the better overall result. And definitely look into that Head of Household status! The tax savings from HOH filing status alone might outweigh the benefit of your boyfriend claiming the higher credits, especially since you're already paying most of the housing costs.

Something nobody has mentioned yet - make sure you have a clear business plan and documentation showing your intent to make a profit! If you claim business losses for too many years, the IRS might reclassify your business as a hobby, which would disallow your deductions. This isn't an issue in your first year at all, but keep good records showing efforts to generate revenue, marketing attempts, business development, etc. The IRS generally looks for profitability in 3 out of 5 years for most businesses (5 out of 7 for horse-related businesses, oddly enough).

I'm dealing with a similar situation with my new consulting LLC! Reading through all these responses has been incredibly helpful. One thing I want to add from my recent experience - when you do file your Schedule C with losses, make sure you keep EXCELLENT records of everything. I just went through this process and learned that the IRS is particularly interested in seeing that new businesses are legitimate profit-seeking ventures, not hobbies. Beyond just keeping receipts, document things like: - Your business plan and revenue projections - Marketing efforts (even if unsuccessful initially) - Time logs showing hours worked on the business - Any client outreach or networking activities Even though you're totally allowed to claim losses in year one (despite what that H&R Block preparer told you!), having this documentation ready shows the IRS you're running a real business. It also helps if you ever get questioned about the hobby loss rules that others mentioned. The equipment expenses you mentioned should definitely be deductible - either through Section 179 immediate expensing or regular depreciation. Don't let anyone tell you otherwise!

Just to add something nobody's mentioned - check with your tax professional about any potential STATE tax benefits for your vehicle purchase. While federal deductions for personal vehicles are limited, some states offer credits or deductions for certain vehicle purchases that are more fuel-efficient than previous models.

Hey Kyle! I went through the same confusion when I bought my car last year. The key thing to remember is that for a regular personal vehicle used mainly for commuting, there aren't any federal tax deductions available. The IRS considers commuting a personal expense, not a business one. However, don't give up hope entirely! Here are a few things to check: 1. **Electric Vehicle Credit**: If your $38,500 car happened to be electric or a qualifying plug-in hybrid, you might be eligible for up to $7,500 in federal tax credits. Check if the manufacturer and model are on the IRS qualified vehicle list. 2. **Business Use**: Even if it's your personal car, if you use it for any work-related travel beyond your normal commute (like driving to different job sites, client meetings, or business errands), you can deduct those miles. You'd need to keep a detailed mileage log though. 3. **State Benefits**: Many states have their own vehicle incentives that are separate from federal rules. Since you're in Pennsylvania, definitely look into any state-specific credits for newer, more efficient vehicles. The documents you'd want to keep are your purchase agreement, financing paperwork, and if you have any business use, start that mileage log now! Even a small percentage of business use can add up over time.