Has anyone here used their IRA money for closing costs instead of the down payment? My lender said that could be a smarter way to use the funds since my down payment affects my loan terms but closing costs are just out of pocket.

@Mateo Martinez - I went through this exact same situation about 6 months ago! Here's what I learned that might help you make the decision: First, definitely confirm you qualify as a "first-time buyer" - the IRS definition is pretty generous (no home ownership in past 2 years). The $10,000 penalty-free limit per person is accurate, so if your wife has an IRA too, you could potentially access $20,000 total. One thing I wish I'd considered more carefully is the timing. You have to use the IRA funds within 120 days of withdrawal for home purchase, so make sure your house hunting timeline aligns with that. Also, even though you avoid the 10% penalty, you'll still owe regular income tax on the withdrawal, which could bump you into a higher tax bracket depending on your income. Given your price range ($340-380k), pulling $20-30k from IRAs for a 10% down payment seems reasonable, but I'd strongly suggest running the numbers on how this affects your 2025 taxes first. The withdrawal gets added to your regular income for that year. Have you looked into any state or local first-time homebuyer programs? Some offer grants or low-interest loans that might reduce how much you need from your IRA. Good luck with the house hunt!

Does anyone use separate credit cards for business vs personal expenses? I'm struggling to keep everything organized and wondering if that would help.

Honestly, you're asking all the right questions! I went through the exact same panic when I started freelancing two years ago. Here's what I wish someone had told me from day one: First, yes you absolutely need to make quarterly payments with that income level. The IRS expects you to pay as you go, not wait until April. Missing them isn't the end of the world, but the penalties add up. For the percentage to set aside, I'd actually recommend starting at 30-35% until you get a feel for your actual tax situation. Better to over-save and get a refund than scramble to find money you don't have. I learned this lesson the expensive way my first year. Home internet is definitely deductible based on business use percentage. Same with your phone, utilities for your home office space, even part of your rent/mortgage if you have a dedicated workspace. The biggest game-changer for me was getting everything automated. Separate business checking account, business credit card, and I literally transfer 30% of every payment the day it hits my account. No thinking, no "I'll do it later" - just automatic. Also, keep ALL your receipts and document everything. Even small stuff like coffee during client meetings or parking when visiting clients. It adds up fast over a year. One last tip - consider finding a good CPA who works with freelancers. Mine costs about $800/year but saves me way more than that in deductions I wouldn't have known about.

I'm actually more concerned about the attempt to serve papers at an address where you don't permanently live. From my understanding (not a lawyer), proper service usually requires delivering documents to your actual residence. If you're officially residing in Mexico, there are international protocols for serving US legal papers to someone in Mexico. It sounds like they're trying to serve you at a US address of convenience, which might not constitute proper service. You might want to research the "Hague Service Convention" which covers international service of process between the US and Mexico.

The international service of process angle is crucial here, but I want to clarify something - you mentioned you're in Peru, not Mexico. The Hague Service Convention does apply between the US and Peru, so if you're truly residing there permanently, any US legal action would need to follow proper international service procedures. However, there's an important distinction to consider. If you've been using your cousin's address as your official address for taxes, banking, and other legal purposes, courts might consider that your legal domicile for service purposes, even if you physically reside abroad. This is called "substituted service" and many jurisdictions allow it when the defendant has designated an address for official correspondence. Given that you mentioned maintaining US residency status and using the cousin's address for "all official mail," you might have inadvertently created a situation where service at that address could be considered proper. I'd recommend consulting with an attorney who handles international service issues before assuming you have protection under improper service rules. The key question is whether you've been filing taxes as a US resident (using that address) or as a US citizen abroad. This designation could significantly impact how courts view proper service in your case.

I had this exact same thing happen to me about 2 weeks ago! The verification request appeared overnight just like yours did. I was super worried at first, but it turned out to be totally normal - just part of their increased security measures for 2024. The whole process took about 30 minutes through ID.me and my refund processed normally after that. Don't stress too much about it, but definitely don't ignore it either since it can delay your refund if you wait too long. Good luck!

This verification request is becoming really common this year - you're definitely not alone! I went through the same thing about a month ago and it was nerve-wracking at first. The key thing is that you're seeing it in your legitimate IRS account on the official website, which is a good sign. When I did my verification, it was pretty straightforward - just had to confirm my identity through ID.me with a driver's license photo and a quick video selfie. The whole thing took maybe 15-20 minutes. My refund came through about a week later with no issues. One thing I'd recommend is to tackle it sooner rather than later. I've heard from others that waiting can sometimes cause longer delays in processing. Also, make sure you have good lighting and a clear background when you do the ID.me verification - it can be picky about photo quality!

Don't forget to track ALL your business expenses as a contractor! I do photography on the side with my regular job and the deductions make a huge difference. You can write off a portion of your home for office space, equipment, software, mileage for business travel, professional development, health insurance premiums, and retirement contributions.

Actually, business deductions for self-employment are completely separate from the standard deduction decision! Even if you take the standard deduction on your personal taxes, you still get to deduct all your legitimate business expenses on Schedule C against your 1099 income. So tracking your business expenses is definitely worth it - things like your design software subscriptions, computer equipment, portion of your home office, professional courses, etc. These reduce your self-employment income before calculating both income tax and self-employment tax, which can save you quite a bit. The key is keeping good records and making sure expenses are legitimately for your graphic design business. I use a simple spreadsheet to track everything monthly - takes maybe 30 minutes but usually saves me hundreds or even thousands come tax time.