Thanks everyone for the detailed explanations! This clears up so much confusion. I was definitely overthinking this - sounds like I just need to worry about regular income tax on my $14k in short-term gains, not FICA. Based on what you all said, I'm in the 22% tax bracket so I should probably set aside around $3k for federal taxes on those gains, plus whatever my state rate is. Way less stressful than thinking I'd owe an extra 15.3% on top of that! Really appreciate this community - you saved me from either overpaying or calling my accountant and paying $200 just to ask this one question.

Just want to add one more thing that might be helpful - even though short-term capital gains aren't subject to FICA taxes, they do count toward your adjusted gross income (AGI). This means they could potentially push you into a higher tax bracket or affect other tax benefits that have income limits. For example, if your gains push your AGI above certain thresholds, you might lose eligibility for things like IRA deduction limits, student loan interest deductions, or other credits. It's worth running the numbers to see how your total income picture looks, not just the tax on the gains themselves. Also, since you mentioned you're doing more day trading this year, keep really good records of all your transactions. The IRS has been cracking down on unreported trading activity, especially with all the new 1099 reporting requirements for crypto and stock transactions.

This is such a helpful thread for young creators! I'm actually in a very similar situation - been developing on Roblox for about two years and have around $35k worth of Robux saved up. Reading through everyone's experiences has been incredibly reassuring. One thing I wanted to add that I learned recently - if you're planning to continue game development as your main income source, you might want to look into getting an Employer Identification Number (EIN) from the IRS even as a sole proprietor. It's free to get directly from the IRS website, and having an EIN can make you look more professional when opening business accounts or working with contractors later on. Also, I've been using a simple expense tracking app called Expensify to photograph and categorize receipts for anything business-related. It automatically pulls data from receipts and makes it super easy to organize everything for tax time. Way better than the shoebox full of paper receipts I had my first year! For anyone else in this situation - definitely start tracking everything NOW like others have mentioned. I wish I had been more organized from the beginning. And don't stress too much - the IRS wants you to succeed as a young entrepreneur, they just want accurate reporting. Thanks to everyone who shared their experiences, especially the tax professionals who took time to give detailed advice. This community is awesome!

This thread has been incredibly comprehensive! As someone who's worked in tax preparation for several years, I'm really impressed with the quality of advice being shared here. One additional resource I'd recommend checking out is the IRS's own guidance for the "gig economy" - they have a specific section on their website about digital platform earnings that covers situations exactly like yours. It's Publication 334 (Tax Guide for Small Business) and they recently updated it to include more examples of online creator income. Also, since you mentioned your parents are only familiar with W-2s, you might want to show them IRS Form 1040-ES (Estimated Tax for Individuals) so they understand what quarterly payments look like. Sometimes seeing the actual forms helps parents feel more comfortable with the self-employment process. One thing I always tell young creators - your situation is becoming incredibly common. The IRS has seen a huge increase in digital creator filings over the past few years, so you're definitely not breaking new ground here. They have plenty of experience with Roblox, YouTube, Twitch, and other platform earnings. The fact that you're planning ahead and asking these questions puts you way ahead of most people your age. Keep that organized mindset and you'll do great! The creator economy is only going to keep growing, so learning proper tax management early is a huge advantage for your future.

I find it so frustrating that the IRS doesn't make these things crystal clear in their publications. It's like they intentionally make it complicated. I missed out on claiming the extra amount for my spouse for TWO YEARS before figuring this out! Cost us over $700 in higher taxes...

As someone who's been through this confusion myself, I can confirm what everyone has said - you absolutely get $1,500 for EACH spouse over 65. So your calculation of $30,700 total ($27,700 + $1,500 + $1,500) is correct! The IRS really should make this clearer in their publications. I think the confusion comes from the way they phrase it as "additional standard deduction for taxpayers 65 and older" without explicitly stating it's per person on joint returns. But yes, each qualifying spouse gets their own additional amount. One tip: if you're using tax software, double-check that it calculated this correctly. Most do it automatically when you enter birth dates, but it's worth verifying the final numbers match what you expect. And as others mentioned, definitely review your prior year returns to make sure you didn't miss out on claiming the full amount you were entitled to.

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!