Does anyone know if the Schedule C requirements are different if you're selling primarily vintage or antique items on eBay? I'm selling my grandmother's old collection and not sure if this counts as a business or just personal sales. My total is around $5,200 for the year.

Super late to this thread but just wanted to add that if you're filing Schedule C for the first time, don't forget about self-employment tax! I got a nasty surprise my first year selling on eBay when I had to pay an extra 15.3% on my net profit. Set aside more than you think you need for taxes.

Looking at all these responses, it sounds like you have three solid options to compare: staying on the domestic partner plan with the tax hit, getting your own ACA plan with unemployment subsidies, or considering marriage if that was already in your future plans. From a purely financial perspective, I'd strongly recommend getting actual quotes for an ACA plan before deciding. Since you just lost your job, your projected 2024 income might qualify you for substantial subsidies that could make individual coverage much cheaper than the ~$500+ monthly tax hit you'd face on your fiancée's plan. Here's what I'd do in your shoes: 1) Get that detailed breakdown from HR that Camila mentioned to make sure their $1,668 calculation is correct, 2) Get ACA quotes on healthcare.gov using your projected annual income including any unemployment benefits, and 3) Calculate the real after-tax cost of the domestic partner option using your fiancée's actual marginal tax rate plus FICA. The marriage route is definitely the cleanest solution tax-wise if you were planning to get married anyway - employer health benefits for spouses are completely tax-free. But if you weren't ready for that step, don't let health insurance be the only reason to rush it. Whatever you choose, make sure to act quickly since you mentioned your current coverage ends soon. Both ACA enrollment and adding you to your fiancée's plan will take some processing time.

I've been following this thread and wanted to share some additional considerations that might help with your decision. One thing I haven't seen mentioned yet is the potential impact on your fiancée's other tax benefits if her income increases by $1,668 monthly due to the imputed income. That extra $20,000+ in annual income could potentially push her into a higher tax bracket or affect eligibility for certain deductions and credits. For example, if she's close to income thresholds for student loan interest deduction, IRA contribution limits, or other phase-outs, this could create additional hidden costs beyond just the direct tax on the imputed income. Also, regarding the ACA option - make sure to factor in the potential differences in coverage quality. Employer plans often have better networks and lower deductibles compared to marketplace plans, even with subsidies. You might save money on premiums but end up paying more out-of-pocket for actual care. One more timing consideration: if you do decide on the domestic partner route, ask HR if there's any flexibility on the start date. Sometimes you can delay the coverage start by a few days to align with when your current coverage ends, which might save you from paying for overlapping coverage or having a gap. The documentation point that Malik made is really important too - I'd also suggest keeping records of any communications with HR about how they calculated the fair market value, just in case you need to justify it to the IRS later.

Have you guys considered alternating years for who claims your son? My bf and I do this with our daughter - I claim her on odd years and he claims her on even years. Our accountant suggested this as the fairest approach since we both contribute similar amounts to her expenses.

This is really helpful information everyone! I'm starting to see that the insurance split isn't the main issue - it's more about who provides the majority of support and how we can optimize our tax situation. @Paolo Longo - The Head of Household point is really important. I hadn't considered that aspect at all. Since I pay the mortgage and most utilities while my son's father covers groceries and some other expenses, I think I probably do pay more than half of the household costs. Combined with claiming our son as a dependent, that could mean significant tax savings with the HoH status. @Oliver Becker - Your approach of calculating the actual tax benefit difference and then sharing it makes a lot of sense. That seems much more fair than just alternating years without knowing the real impact. I think my next step is to sit down with my son's father and actually calculate out all our expenses and see who benefits more from claiming our son. The insurance coverage split should work fine as long as we're clear on the dependent claim. Thanks everyone!

I'm dealing with a very similar situation right now! My family's S-Corp just went through this exact issue with our accountant. What we discovered is that many accountants get confused about the ownership attribution rules and mistakenly apply the 2%+ shareholder restrictions to ALL family members, even when they have zero ownership. The key distinction is actual ownership vs. family relationship. Just because you're related to the owner doesn't automatically make you subject to the shareholder rules. Since you explicitly stated you have no ownership stake and receive a regular W-2, your health insurance premiums should be treated exactly like any other non-owner employee's. I'd suggest asking your accountant to show you the specific IRS code section they're relying on for their position. The attribution rules in IRC Section 318 only apply when determining if someone is a more-than-2% shareholder - they don't automatically disqualify family member employees from standard employee benefits if those family members don't actually own stock. Your situation sounds straightforward - you should be able to maintain the same health insurance deduction treatment you had as a C-Corp employee.

This is exactly the kind of confusion I see all the time in family businesses! Your accountant is definitely wrong here. As a zero-ownership employee, you should be treated exactly like any other W-2 employee for health insurance purposes. The 2% shareholder rules that restrict S-Corp health insurance deductions only apply to actual shareholders (and their spouses/dependents), not to family members who simply work for the company without owning stock. Since you explicitly have no ownership stake, your health insurance premiums should remain fully deductible as a business expense - just like they were when you were a C-Corp. I'd recommend getting a second opinion from a CPA who specializes in S-Corp taxation. Many accountants get tripped up by family business scenarios and incorrectly assume that ANY family relationship triggers the shareholder restrictions, but that's not how the tax code works. The key is actual ownership percentage, not family ties. Your dad (as the owner) will need to follow the special S-Corp rules for his own health insurance, but yours should be straightforward employee benefits with no special treatment required.

I've been working through similar tiered partnership 163(j) issues and wanted to share what I've learned from experience. The M-1 adjustment approach everyone is discussing is definitely correct, but I'd recommend a few additional steps to make sure you're bulletproof on this: First, create a detailed supporting schedule that shows the flow-through from the lower-tier partnership. Start with the K-1 ordinary income as reported, then show the embedded interest expense (from the footnote), your Form 8990 calculation, and finally the disallowed amount. This creates a clear audit trail. Second, make sure your partnership agreement addresses how these disallowed amounts are allocated among partners. Sometimes the standard profit/loss percentages don't apply to these tax attributes, and you want to be clear about the allocation method. Finally, consider sending a brief explanatory memo to your partners along with their K-1s. Most partners don't understand these complex calculations, and explaining that there's a disallowed interest carryforward that may benefit them in future years helps with client relations and reduces confusion. The good news is that once you set up the process correctly, it becomes much easier to handle in subsequent years. Just make sure you're carrying forward the prior year disallowed amounts correctly when you prepare next year's Form 8990.

I've been following this discussion and wanted to add a perspective from someone who's handled quite a few of these tiered partnership 163(j) situations. You're absolutely correct in your approach - the M-1 adjustment is the way to go. One thing I'd emphasize is the importance of timing in these calculations. Make sure you're applying the 163(j) limitation based on your partnership's adjusted taxable income for the current year, not the lower-tier partnership's limitation calculation. Since they weren't subject to 163(j), their entire $270K interest expense was properly deducted in computing their ordinary income that flowed through to you. Your Form 8990 should treat that $270K as current year business interest expense (line 1) along with the corresponding adjusted taxable income from the footnote (line 13). If line 31 shows zero deductible amount, then yes, you need to add back the full $270K through an M-1 adjustment to effectively "undo" the interest deduction that's embedded in the K-1 ordinary income. One practical tip: In Lacerte, I usually enter this as an "Other Addition" on the M-1 with a clear description like "Section 163(j) disallowed interest expense from [Partnership Name] K-1 - see attached Form 8990." This makes it crystal clear during review what's happening and why the adjustment exists. Don't forget to prepare the required disclosure statement for your partners showing their allocable share of the disallowed interest carryforward. They'll need this for their own tax planning and basis calculations.