Make sure you also consider other tax benefits when planning this! My ex and I alternated claiming our daughter during college, but we didn't realize it would affect things like: 1. Filing status (head of household vs. single) 2. Earned Income Credit 3. Child Tax Credit (until age 17) 4. Higher education credits (American Opportunity Credit is worth up to $2,500) The parent NOT claiming the child in a given year should adjust their W-4 withholding at work to account for the change in tax situation that year. Also, I think one of you might be misunderstanding the savings bond education exclusion. You can only exclude the interest if the bonds are in YOUR name (not the child's) and you use them for qualified education expenses. But you also need to meet income limits, which phased out at like $98k-$128k for single filers last time I checked.

This is such great advice from everyone! I'm going through a similar situation with my ex, and reading through all these responses has been incredibly helpful. One thing I'd add is to make sure you coordinate the timing of when you complete Form 8332 each year. We learned the hard way that if the custodial parent doesn't get the form to the non-custodial parent early enough in the tax year, it can create complications when filing. Also, I'd strongly recommend sitting down together (or communicating through email if that works better) to map out a 4-year plan before your son starts college. Figure out which parent will claim him each year, and factor in things like: - Who will be using 529 funds or savings bonds in which years - Any expected changes in income that might affect education credit eligibility - Whether either parent might remarry (affecting household income thresholds) We created a simple spreadsheet showing the projected tax benefits for each scenario over all four years, and it made the decision much clearer. Having it all planned out in advance has eliminated any confusion or arguments during tax season. One last tip - keep copies of all Form 8332s and any written agreements you make. The IRS can ask for documentation if they ever question who has the right to claim the dependent in a given year.

Hey! I'm dealing with a similar situation right now and this thread has been super helpful. I just started selling on a few different platforms and was totally overwhelmed by the tax implications. One thing I'm still confused about though - if I'm using multiple platforms (like feetfinder, OnlyFans, etc.), do I need to fill out separate T2125 forms for each one, or can I combine all the income from different platforms into one business activity? Also, for anyone who's been doing this for a while - what's the best way to track payments that come in at different times? Sometimes platforms hold payments for a week or two, so I'm not sure if I should record income when I earn it or when it actually hits my account. Don't want to mess up my record keeping from the start! Thanks for all the great advice in this thread - definitely feel more confident about handling this properly now.

This is such a common question and I'm glad you're being proactive about it! I went through the exact same confusion when I started earning from similar platforms. The key thing to remember is that in Canada, ALL income must be reported regardless of the source or amount - there's no minimum threshold. Even if you only make $50, technically it should be on your tax return. The good news is that as self-employment income, you can deduct legitimate business expenses against it. Since you're in Ontario, you'll report this on your T1 return using Form T2125. Some expenses you can likely deduct include: - Portion of your internet/phone bills used for business - Any equipment purchases (camera, lighting, props, etc.) - Marketing costs if you promote yourself My advice: start tracking everything from day one. Keep a simple spreadsheet with your monthly earnings and any related expenses. Set aside about 25-30% of what you earn for taxes. And don't stress too much - once you get the hang of it, it's really not that complicated! The CRA would much rather see you reporting everything properly from the start than trying to figure it out later.

Does anyone know if there's a certain amount of items you can sell before eBay considers you a business seller? I'm cleaning out my house too but worried about crossing some threshold.

The IRS looks at several factors to determine if you're operating a business rather than just selling personal items: frequency of sales, intent to make profit, time and effort spent, expertise in the items you're selling, and whether you're buying items specifically to resell. From what you've described - clearing out personal items from your house - this sounds like casual sales of personal property rather than a business. However, keep detailed records of everything: what you sold, original purchase price (or good faith estimates), sale price, and all expenses like eBay fees and shipping costs. The $3,200 you've made isn't automatically taxable income if you're selling items for less than you paid for them. But if some items sold for more than your cost basis, that profit portion would be taxable. Also remember that even if eBay sends you a 1099-K, you still need to determine what portion (if any) represents actual taxable income vs. return of your original investment in those items.

Just wanted to add that the IRS really looks closely at dependent claims that don't follow traditional family structures. I tried claiming my longtime roommate years ago (we had a similar arrangement where I paid all the bills and she covered other expenses). Got audited and had to repay the tax benefit plus a penalty. Make sure you have solid documentation of actually supporting them if you go this route!

Based on what everyone's shared here, it sounds like your money transfer arrangement with your roommate probably won't qualify him as your dependent under IRS rules. The key issue is that you're not actually providing his support - you're both just helping each other avoid international wire fees. For the IRS support test, you'd need to be directly paying for more than 50% of his actual living expenses like rent, food, utilities, medical costs, etc. The fact that you give him money that his family then gives to your family is more of a financial convenience than true support. Even if you were covering his living expenses directly, you'd also need to make sure he meets the gross income test (under $4,700 for 2025) and that he's not being claimed by anyone else. Plus, as others mentioned, there could be complications with his student visa status if he's international. I'd suggest keeping detailed records of who actually pays for what in your living arrangement, but based on what you've described, this probably isn't going to work for claiming him as a dependent. The IRS is pretty strict about these requirements, especially for non-family dependent claims.

Don't forget about state tax issues! Depending on your state, you might have franchise tax or entity-level taxes that are affected by the change from partnership to single-member LLC. In California for example, the $800 minimum franchise tax applies differently to partnerships vs. disregarded entities. Also, if you have any registered intellectual property like trademarks or patents in the LLC's name, you'll want to document that these remain with the entity through the transition. Some states also require notification to any LLC registered agents when ownership changes by more than a certain percentage.

Michigan has pretty straightforward requirements for LLC ownership changes. You'll need to file an amendment to your Articles of Organization with the state if your operating agreement requires it, but many standard LLCs don't actually require this filing just for membership changes. For taxes, Michigan follows federal treatment pretty closely - your LLC will be disregarded for state tax purposes once you become the sole member, so you'll report business income on your individual Michigan return instead of filing a separate entity return. No special franchise tax issues like California. One thing specific to Michigan - if you have any state tax credits or incentives tied to the LLC (like Renaissance Zone benefits or certain business development programs), make sure those don't get affected by the ownership change. The Michigan Department of Treasury sometimes requires notification for significant ownership changes in entities receiving state benefits. Also document your digital assets and domain ownership clearly in your buyout agreement. Even though they're not "registered IP" yet, having a clear record of what stays with the LLC will save headaches later if you do end up filing for patents or trademarks on your software.