Thought I'd chime in - I bought a new car last year too and tried to claim it on my taxes. H&R Block software actually walked me through the whole process for my Kia EV6. Needed the VIN, purchase date, and sale documents showing the purchase price. The most important document was the manufacturer's certification stating the battery capacity, which determines the credit amount. The dealer should have given you this, but if not, call them and ask specifically for the "EV tax credit certification" for your Prius Prime.

Just want to add another perspective here - I work in tax preparation and see a lot of confusion about vehicle tax benefits. The key thing to understand is that there's a big difference between a tax deduction (which reduces your taxable income) and a tax credit (which directly reduces the tax you owe). For personal vehicle purchases like yours, you're not getting a deduction - you're potentially eligible for a credit if it's an electric or plug-in hybrid vehicle. The Clean Vehicle Credit can be worth up to $7,500, but for plug-in hybrids like the Prius Prime, it's typically less based on battery capacity. Also worth noting - if you bought the car from a dealer in 2024, you might have had the option to transfer the credit to the dealer at the point of sale for an immediate discount instead of waiting to claim it on your tax return. Check your purchase paperwork to see if this happened, because if the dealer already claimed it, you can't claim it again on your return. The documents you'll need are your purchase agreement with VIN, and make sure your specific model is on the IRS qualified vehicle list. The rules have changed several times recently, so definitely verify current eligibility before filing.

This has been an incredibly thorough discussion! As a CPA who specializes in small business taxation, I want to add a few key points that could significantly impact your decision. First, consider the Alternative Minimum Tax (AMT) implications. Large depreciation deductions from cost segregation can sometimes trigger AMT, which could reduce your expected tax benefits. This is especially important if you have significant other income sources. Second, regarding the mixed-use concern between your existing sole proprietorship and new importing business - consider whether it makes sense to establish a formal rental arrangement between the businesses and yourself as the property owner. This creates cleaner documentation and can actually provide more flexibility in how you allocate costs and claim deductions. Third, don't overlook the potential for claiming bonus depreciation on qualifying components. Under current tax law, certain improvements to business property can qualify for 100% bonus depreciation in the first year, though this is being phased down. Items like security systems, specialized HVAC, and certain types of qualified improvement property might qualify. Finally, I'd strongly recommend running a detailed cash flow analysis comparing the garage project to leasing commercial space. Factor in the opportunity cost of the construction capital, ongoing property tax increases, maintenance costs, and the depreciation recapture tax if you sell the property. Sometimes the flexibility and immediate deductibility of commercial lease payments provides better long-term value than ownership. The tax benefits are attractive, but make sure the underlying business case is solid regardless of the deductions.

This thread has been incredibly educational! I'm in a similar situation with my home-based business and was considering a detached workshop/storage building. One thing I wanted to add based on my research: if you're importing products, make sure to factor in the potential need for climate-controlled storage. Electronics and many consumer goods can be sensitive to temperature and humidity fluctuations, which could affect your inventory value and insurance coverage. This might influence your HVAC decisions during construction and could potentially qualify more of those systems for the faster depreciation schedules mentioned earlier. Also, regarding the zoning concerns several people raised - I found it helpful to check not just with the building department, but also with your HOA (if applicable) and state/local business licensing departments. Some states have specific requirements for businesses that handle imported goods, and you want to make sure your residential location won't create compliance issues down the road. The cost segregation strategy everyone's discussing sounds really valuable. Based on what I've learned, it seems like planning this approach from the beginning of construction (rather than trying to retroactively apply it) makes a huge difference in the documentation quality and potential tax benefits. Thanks to everyone who's shared their experiences - this is exactly the kind of real-world insight that's hard to find elsewhere!

Has anyone used the Medical Expense Statement tool in TurboTax for this? I'm in a similar situation but confused about how to enter my mom's expenses that I paid versus what she paid herself.

Just wanted to add something that helped me when I was in this exact situation last year with my father's medical expenses. Make sure you're tracking not just the obvious medical costs, but also things like: - Medical equipment you bought for them (blood pressure monitors, diabetic supplies, etc.) - Transportation costs to medical appointments (mileage or actual costs) - Prescription glasses and hearing aids - Any dental work you paid for directly I found about $1,800 in additional deductible expenses I almost missed because I was only thinking about hospital and doctor bills. Also, if you're using a Health Savings Account (HSA) or Flexible Spending Account (FSA) to pay for any of their expenses, those don't count toward your itemized deduction since they're already tax-advantaged. One more tip - if you're close to the 7.5% AGI threshold, consider timing some medical expenses. For example, if you know your parents will need dental work or new glasses, paying for it in December versus January could make the difference in whether you get any deduction at all.

How do you even figure out what you can deduct with a 1099? My friend says I can write off part of my rent since I work from home sometimes??

As someone who's been freelancing for about 5 years now, I can tell you that 1099-NEC taxes are definitely manageable once you understand the basics. The biggest mistake I made my first year was not tracking my business expenses properly - things like software subscriptions, equipment, internet bills, and even mileage for client meetings can all be deducted. My advice is to open a separate business checking account and put 25-30% of each payment into a savings account immediately for taxes. That way you won't be scrambling come tax time. Also, keep receipts for everything work-related throughout the year. It's much easier than trying to reconstruct your expenses in April!

This thread has been incredibly helpful! As someone who's dealt with payroll issues before, I wanted to add one more thing to check - make sure your sister's W-4 wasn't accidentally processed under the old allowances system if HR is using outdated forms or procedures. Even though the W-4 was redesigned in 2020, some smaller companies or older payroll systems still try to convert the new format back to "allowances" for their calculations. If someone mistakenly entered a high number of allowances (like 8-10) when trying to interpret her W-4, that could result in extremely low withholding like the $78 you're seeing. Also, given that this is a new job, she should double-check that HR has her correct Social Security number in the system. I've seen cases where a single digit error in the SSN causes the payroll system to default to minimal withholding because it can't properly verify the employee's tax information with IRS databases. The fact that so many people in this thread have shared similar experiences and solutions really shows how common these issues are. The key is catching it early like you did - waiting until tax season would definitely have been painful! Hopefully between checking the W-4, verifying her SSN, and looking into potential system errors, she can get this resolved quickly.

Wow, this thread has been incredibly thorough! I'm impressed by how many different potential causes everyone has identified. As someone who works in tax preparation, I see these withholding issues ALL the time, especially with new employees. Based on everything discussed here, I'd recommend your sister take a three-step approach: 1) **Immediate action**: Get a copy of her W-4 from HR and verify it's filled out correctly. Pay special attention to whether she accidentally claimed exempt status or if there are any errors in her personal information. 2) **Verify payroll setup**: Ask HR to confirm her salary, filing status, start date, and SSN are all entered correctly in their system. As several people mentioned, new employee setup errors are incredibly common. 3) **Calculate catch-up withholding**: Once the issue is identified and fixed, use the IRS withholding calculator to determine if she needs additional withholding for the remaining pay periods to avoid owing a large amount in April. The $78 per paycheck is definitely a red flag for someone making $65k annually. For comparison, that's only about $2,000 in federal withholding for the entire year, which would likely result in owing several thousand dollars at tax time. Acting now could save her from both a huge tax bill and potential underpayment penalties. Good catch on spotting this early!