Great question! The explanation about purchase commissions being added to cost basis and selling commissions reducing proceeds is spot on. Just wanted to add a couple of practical tips from my experience: 1) If you use multiple brokers, make sure you're consistent in how you handle fees across all platforms. Some brokers are better at clearly showing commissions on their 1099-B forms than others. 2) Don't forget about transfer fees if you moved stocks between brokers - these can usually be added to your cost basis as well since they're directly related to acquiring the securities. 3) Keep digital copies of all your trade confirmations, not just the year-end summaries. The IRS loves documentation if they ever have questions about your cost basis calculations. One last thing - if you're doing a lot of trading, consider whether you might qualify as a "trader in securities" for tax purposes. The rules are different and might actually be more favorable depending on your situation. Worth researching if you're making frequent trades!

This is such a common source of confusion! I went through the same thing when I started actively trading. One additional point that might help - if you're using a discount broker that charges per-share fees instead of flat commissions (like some do for penny stocks), those per-share fees work the same way. They get added to your cost basis on purchases and subtracted from proceeds on sales. Also, if you ever get into options trading, the same principle applies to options commissions and assignment/exercise fees. The key is always thinking about which side of the transaction the fee relates to - acquisition costs increase your basis, disposition costs reduce your proceeds. Keep good records throughout the year rather than trying to reconstruct everything at tax time. I learned that lesson the hard way my first year of serious trading!

I'm in my 3rd year of YouTube and my biggest mistake was mixing personal and business expenses at the beginning. For your sanity during tax season, get a separate card for YouTube purchases NOW, even if you're not making money yet. When tax time comes and you're trying to sort through hundreds of transactions to figure out which were for the channel... it's a nightmare. Trust me.

Great thread! As someone who's been through this exact journey, I want to emphasize something that saved me a lot of headaches: start treating it like a business from day one, even if you're not making money yet. Beyond what others have mentioned, here's what I wish I'd known: consider opening a business credit card (not just debit) for your YouTube expenses. Many business cards offer cash back on categories like office supplies, internet, and advertising - which are perfect for YouTubers. Plus, using credit responsibly helps build your business credit score for the future. Also, don't forget about the home office deduction if you're editing at home! Even if it's just a corner of your bedroom where you edit, you can potentially deduct that square footage. For 2025, you can use either the simplified method ($5 per square foot up to 300 sq ft) or calculate actual expenses. One last tip: start a simple spreadsheet or use an app to track everything monthly rather than waiting until tax season. I use a basic Google Sheet with columns for date, amount, category, and description. Takes 5 minutes a month but saves hours at tax time!

@Fatima Al-Maktoum You're absolutely right to feel confident about your tax provider's work! As someone who transitioned from employee to contractor status a few years ago, I can totally relate to the initial confusion. Schedule C was intimidating at first, but it's actually quite logical once you understand it. One thing that really helped me was requesting a copy of my completed return and having my tax preparer walk through each section with me - most good preparers are happy to explain their work if you ask. This way you'll be better prepared next year and can even start organizing your records throughout the year to make the process smoother. The fact that you're asking these questions shows you're taking your tax obligations seriously, which is exactly the right approach! Don't stress about "tax fraud" - you're clearly being responsible and working with a professional. Welcome to the US tax system - it gets easier each year! 😊

As a fellow newcomer to the US tax system, I completely understand your confusion! @Fatima Al-Maktoum Your tax provider definitely did the right thing by filing Schedule C - it's absolutely required for all 1099 contractor income. I went through this exact same panic last year when I saw all these unfamiliar forms on my return! 😅 What really helped me was learning that Schedule C is actually working IN YOUR FAVOR - it's not just about reporting income, it's also where you get to deduct all your business expenses (home office, equipment, supplies, mileage, etc.). These deductions can significantly reduce your taxable income. One thing I wish someone had told me earlier: start tracking ALL your business expenses now for next year! Even small things like office supplies or phone bills (if used for work) can add up. I use a simple app to photograph receipts as I get them. Also, definitely ask your tax preparer to explain each form next time - most are happy to educate clients, and understanding your return will make you feel much more confident about the whole process. You're asking all the right questions! 🙂

Check your loan estimate carefully! Mine had an origination charge of 1% but when i looked at the breakdown it was actually 0.25% for points (deductible) and 0.75% for underwriting fees (not deductible). They lump it all together as "origination" which is super confusing.

Great advice from everyone here! I went through this same confusion last year. One thing that really helped me was getting the HUD-1 Settlement Statement (or Closing Disclosure for newer loans) and looking specifically at line 801 for "Loan Origination Fee" and line 802 for "Loan Discount (Points)". If your 1.25% fee shows up on line 802 or is specifically labeled as discount points, it's likely deductible. If it's on line 801 as a service fee, it's probably not. Also, the IRS has a specific test for deductible points: they must be computed as a percentage of the loan amount, paid for your main home, be customary in your area, and not exceed the amount generally charged. Your lender should be able to confirm which category your fee falls into - don't be afraid to press them for specifics since this affects your taxes!

Don't forget about the stimulus payments from 2024 that were tied to dependents! If he incorrectly claims your daughter, it could affect any remaining credits you're entitled to receive. Make sure you correctly report any advance payments you received for her during the year on your tax return. Also, as the custodial parent, you qualify for Head of Household filing status which gives you a higher standard deduction than filing Single. Make sure you're claiming that benefit too!

I'm going through something very similar right now with my ex-husband. One thing I learned from my tax preparer is that you should also keep records of any expenses you paid for your daughter throughout the year - things like clothing, school supplies, extracurricular activities, medical copays, etc. The IRS looks at who provided more than half of the child's support, not just where she lived. Since you mentioned you're the one handling all her paperwork and she lives with you 280+ days, you're clearly the custodial parent. But having those expense records helps prove the support test too, especially if your ex tries to argue that his child support payments mean he provided more support. I'd also suggest taking screenshots of any text messages where he acknowledges that she lives with you most of the time, or where he's inconsistent about paying support. That kind of documentation can be really helpful if the IRS needs to investigate. Good luck with your filing!