Hey Cameron! Don't worry, you're definitely not alone in being confused by this - tax forms can be really counterintuitive, especially when you're doing them for the first time. A negative number on line 37 is actually completely normal and correct! It means you don't owe any taxes - instead, the government owes YOU money (your refund). Think of it this way: throughout the year, your employer withheld taxes from your paychecks based on estimates. When you file your return, you're calculating exactly how much tax you actually owe. If the amount withheld was more than what you actually owe, you get the difference back as a refund. The negative number on line 37 is just the form's way of showing this mathematically. Your tax software is handling this correctly by showing it as a refund amount. Just make sure to fill out the direct deposit information if you want your refund deposited directly to your bank account - it's much faster than waiting for a paper check! You're doing great by double-checking everything and asking questions. That's exactly what you should be doing with taxes!

This is such a common source of confusion for first-time filers! You're absolutely right to double-check everything - that shows you're being responsible about your taxes. Just to add to what others have said, the negative number on line 37 is the IRS's way of showing that instead of you owing them money, they owe you money. It's like when you overpay for something at a store and get change back, except in this case your employer "overpaid" the IRS throughout the year on your behalf through payroll withholdings. One tip for future years: if you consistently get large refunds, you might want to adjust your W-4 form with your employer to have less tax withheld from each paycheck. That way you'll have more money in your pocket throughout the year instead of giving the government an interest-free loan. But for now, just enjoy getting that refund! You're doing everything right by using tax software and verifying the numbers. The fact that both your manual calculations and the software show the same result is a good sign that everything is correct.

One thing to consider is whether your brother and sister-in-law are claiming any home office or rental deductions for the basement on their taxes. If they're claiming depreciation or expenses for that space as a rental property, it actually strengthens your case for HOH because it establishes the basement as a separate rental unit. You might want to talk to them about how they're planning to handle the rental income they receive from you on their taxes. This affects both of you - they need to report the income, but it also helps confirm your status as a renter maintaining your own household.

I went through a very similar situation when I moved into my sister's converted garage apartment with my two kids. The key thing that helped me qualify for HOH was establishing that we truly had separate households, even though we were on the same property. Here's what worked for me: - We had our own entrance (important!) - I paid a fixed monthly amount that covered utilities for our space - I bought all groceries and household items for my kids and myself - We had our own kitchen and bathroom facilities The IRS considers you to be "keeping up a home" when you pay more than half the costs of your household. Since you'll be paying rent that covers your portion of the mortgage plus presumably handling your own food, personal expenses, and care for your daughter, you should meet this requirement. Just make sure to keep detailed records of all your payments and expenses. I kept a simple spreadsheet tracking my rent payments, grocery receipts, and any other costs for our living space. Having that documentation gave me confidence when filing and would be helpful if there were ever any questions. The separate entrance you mentioned is actually a big plus - it really helps establish that you're maintaining an independent household rather than just contributing to a shared family home.

Has anyone used an electric vehicle for business? I'm considering getting a Chevy Bolt for my business, and I'm wondering if there are additional tax benefits beyond the regular vehicle deductions. From what I understand, there's still the $7,500 tax credit for some EVs, but I'm not sure how that interacts with business use deductions.

Great thread everyone! As someone who just went through this process with my marketing consultancy, I wanted to add a few practical tips that helped me maximize my deduction for my Subaru Outback (definitely under 6,000 lbs). First, start tracking your mileage NOW if you haven't already - even if you're still shopping for the vehicle. Use a smartphone app or simple logbook to record business trips. The IRS expects contemporaneous records, not reconstructed logs. Second, consider your long-term business plans. If you expect your business mileage to increase significantly, the standard mileage rate might be better. If your mileage will stay consistent but you're buying a more expensive vehicle, actual expenses could work better. Finally, don't overlook the home office deduction connection. If you have a qualifying home office, trips from your home office to client meetings are fully deductible business miles. This can really add up over the year and make either deduction method more valuable. The key is running the numbers for YOUR specific situation rather than following general rules. Every business is different!

Your CPA is partially right but didn't give you the whole picture. Look into "special allocations" in partnerships. Section 704(b) of the tax code allows partnerships to allocate tax items differently than ownership percentages IF the allocation has "substantial economic effect." Maybe consider amending your operating agreement to formally recognize your sweat equity as equivalent to your partner's cash contributions? You could also adjust the agreement to get a larger share of future profits to compensate for not being able to use the losses now. And definitely get a second opinion from a different CPA! Not all accountants specialize in partnership taxation.

This is a frustrating but common situation in service-based partnerships. Your CPA is correct about the basis limitation - you need basis to deduct losses, and sweat equity unfortunately doesn't count under IRS rules. However, I notice from the thread that you mentioned having a $15,000 business loan that you're both named on. This is key! If you're personally liable for that debt (not just as an LLC member), your 50% share ($7,500) would give you basis to claim some of your allocated losses. Here's what I'd recommend: 1. Verify if you're personally liable for that loan - check if you signed personal guarantees 2. Get a second CPA opinion, preferably someone who specializes in partnership taxation 3. Review your operating agreement to see if it addresses loss allocations and partner liabilities 4. Consider if there are other partnership debts you might be liable for The suspended losses aren't lost forever - they'll carry forward until you have sufficient basis. And if you do have basis from the loan, you could potentially claim $7,500 of your allocated losses this year. Don't just take one CPA's word on this - partnership taxation is complex and many generalist accountants don't deal with it regularly.

As someone who's dealt with multi-state tax issues for several years, I want to add a few practical tips that might help: First, start keeping a detailed work location log RIGHT NOW if you haven't already. I use a simple spreadsheet tracking date, location, and type of work performed. This becomes crucial evidence if any state questions your filing status later. Second, be aware that some states are getting more aggressive about auditing remote workers post-pandemic. I know people who got audit notices 2-3 years after filing, so proper documentation is essential. Third, if you're genuinely unsure about your filing requirements, consider consulting a tax professional who specializes in multi-state issues. The cost of a consultation is usually much less than the penalties and interest you'd face for filing incorrectly or not filing when required. One last thing - don't assume that just because your employer isn't withholding state taxes from a particular state that you don't owe them. Employers sometimes get this wrong, especially with remote workers. The withholding (or lack thereof) on your W-2 doesn't determine your actual tax obligation. The multi-state tax landscape is definitely complex, but with good record-keeping and the right resources, it's manageable. Better to be over-cautious than to get hit with unexpected penalties later!

One thing I haven't seen mentioned yet is the potential impact of state disability insurance (SDI) and other payroll taxes for remote workers. Even if you don't owe income tax to a state, you might still be subject to their payroll taxes if your employer is based there. For example, California has SDI tax that applies to all wages paid by California employers, regardless of where the work is performed. This is separate from income tax obligations. Similarly, some states have unemployment insurance requirements that follow the employer's location rather than where you work. I learned this the hard way when I discovered I owed California SDI tax even though I successfully argued I didn't owe California income tax as a remote worker. The rules are completely different and it's easy to overlook. If you're dealing with multi-state issues, make sure to research both income tax AND payroll tax obligations separately. Your payroll department might not be handling this correctly either - I've seen cases where employers weren't withholding required SDI but were withholding income tax they shouldn't have been. Also worth noting: some states are starting to require quarterly estimated payments for remote workers, especially if you're classified as an independent contractor rather than an employee. The requirements can be quite different from your home state's rules.