This is such a common struggle for single-member LLC owners! I went through the exact same confusion in my first year. One thing that really helped me understand the separation was thinking of it this way: your LLC earns the money, but YOU (as an individual) owe the taxes on that income. So the flow should be: Business pays all legitimate business expenses → Business makes distributions to you personally → You pay your individual tax obligations (SE tax, income tax, etc.) from your personal funds. For practical implementation, I set up automatic quarterly transfers from my business account to personal, calculated as roughly 25-30% of my net business income. This covers estimated taxes and prevents me from accidentally spending tax money on business expenses. I also keep a simple spreadsheet tracking each distribution with the purpose noted. The health insurance situation you mentioned is totally normal - many providers only accept personal payments. Just do a clean transfer for the exact premium amount and document it as "distribution for health insurance premium." You'll still get the deduction on your personal return.

One thing I learned the hard way is to be really consistent with your documentation from day one. I got lazy with labeling my transfers in year one and it created a mess when my accountant was preparing my taxes. A simple naming convention makes all the difference - I use "Owner Draw - Quarterly Tax Q1 2024" for tax distributions and "Owner Draw - Health Insurance March 2024" for health-related transfers. This way there's never any question about what each transfer was for if the IRS ever looks at your records. Also, don't forget that estimated tax payments should include both your income tax AND self-employment tax portions. I initially was only calculating income tax for my quarterly transfers and got behind on SE tax. A good rule of thumb is to set aside about 15.3% specifically for SE tax plus whatever your income tax rate is. Better to overpay and get a refund than to underpay and owe penalties!

One thing nobody's mentioned - if you're paying $1,890/month with only a $340 subsidy, you might qualify for a larger subsidy depending on your income. The ACA subsidies were expanded for 2023-2025. Might be worth double-checking on healthcare.gov if your marketplace plan is giving you the maximum subsidy you're entitled to. Could save you more money than any tax deduction!

I went through this exact same situation last year! The key thing to understand is that there are actually TWO different types of health insurance deductions, and most people (including tax software) get them confused: 1. **Self-employed health insurance deduction** - This is the "above-the-line" deduction that reduces your AGI directly. You DON'T qualify for this since you're not self-employed. 2. **Medical expense itemized deduction** - This is where your ACA premiums (minus subsidies) can potentially be deducted, but only if you itemize AND your total medical expenses exceed 7.5% of your AGI. Based on your numbers ($32k AGI, $18,600 in net premiums after subsidies), you'd easily clear the 7.5% threshold ($2,400). The question is whether itemizing makes sense overall. Here's what I'd suggest: Make sure you're capturing ALL your medical expenses - not just premiums. Include copays, prescriptions, dental work, vision care, medical equipment, even mileage to medical appointments. Also don't forget about state income taxes paid, property taxes (if any), and charitable donations for your itemized total. Your situation actually looks like a good candidate for itemizing, unlike most ACA marketplace participants. Definitely worth running the numbers both ways before filing!

Great question about contingent beneficiaries! You can absolutely set different percentage splits for contingent beneficiaries compared to primary ones. Most IRA custodians allow quite a bit of flexibility here. For example, you could have yourself as 100% primary beneficiary, but then name multiple contingent beneficiaries (like siblings, nieces/nephews, or charities) with whatever percentage splits make sense for your mom's wishes. Regarding the 2026 exemption cliff and state taxes - you're right to wonder about this. State estate tax exemptions are generally set independently of federal levels, though some states do tie their exemptions to the federal amount. Most states with their own estate taxes have maintained consistent exemption levels regardless of federal changes. So while the federal cliff might not directly impact state planning, it's still worth reviewing both periodically. One more thing to consider: if your mom's assets continue to appreciate significantly over the next few years, the 2026 exemption reduction could become more relevant. Real estate and investment growth between now and then might push some estates closer to the new lower thresholds than people expect.

This thread has been incredibly helpful! I just wanted to add one more consideration that came up when I was dealing with my grandmother's estate - make sure your mom has all her account information organized and accessible to you as the beneficiary. I discovered after the fact that she had IRA accounts at three different institutions, and tracking them all down was a real headache. Consider creating a simple document that lists all her retirement accounts, account numbers, contact information for each custodian, and where she keeps important paperwork. Also, some IRA custodians have different policies about how quickly beneficiaries need to start taking distributions after inheritance, even within the 10-year rule framework. Having that information organized ahead of time can save a lot of stress during an already difficult period. It's one of those practical details that gets overlooked in all the tax planning discussions but can make a huge difference when the time comes.

11 Another thing to consider with 1098-T: if your child is claimed as your dependent, make sure you're coordinating who claims education credits. If you claim your child as a dependent, they can't claim their own education credits (like American Opportunity Credit) - YOU would claim those on your return, not theirs.

22 Don't forget about state filing requirements! Even if your child doesn't need to file a federal return, some states have lower thresholds for filing requirements. I learned this the hard way when my son got a letter from our state tax department asking where his return was, even though he was under the federal threshold.

This is such a helpful thread! I'm dealing with the exact same confusion for my consulting business. What really clicked for me reading through all these responses is that Section 179 is essentially about WHEN you get the tax benefit, not IF you get it. One thing I'm still wondering about though - does the vehicle financing interest rate play into this decision at all? Like if I can get 0% financing on the truck, does that change whether Section 179 makes sense versus regular depreciation? It seems like the cash flow benefit of Section 179 would be even bigger if I'm not paying interest on the loan. Also really appreciate the mentions of tracking business use percentage - I definitely need to get better about that regardless of which deduction method I choose!

One aspect that hasn't been covered much here is the income limitation for Section 179. There's an annual limit on how much you can deduct (for 2024 it's $1.22 million) and it starts phasing out if you purchase more than $3.05 million in qualifying property during the year. But more importantly for most small business owners, you can't deduct more than your business's taxable income for the year. So if your business only made $30,000 in profit this year, you can't take a $45,000 Section 179 deduction on a truck - you'd be limited to the $30,000 and would have to carry forward the rest. This is where regular depreciation might actually be better for newer or smaller businesses that don't have large profits yet. With depreciation, you spread the deduction over time, which might align better with your income growth. Just something to consider when running those cash flow calculations everyone's been talking about!