Thanks for mentioning this! We actually did install some grab bars and a walk-in shower about two years ago but I didn't think of that as something tax-related. About how much of his care costs would qualify toward the support test? The in-home aide costs around $4,200/month and we're paying for all of it.

The in-home care costs absolutely count toward the support test! If you're paying $4,200/month, that's over $50,000 per year just for that care, which is substantial. All of that would count toward your support calculation. For the medical modifications, if they were medically necessary (prescribed or recommended by a healthcare provider), they could potentially be deductible as medical expenses if you itemize deductions. However, these would need to exceed a certain percentage of your adjusted gross income along with other medical expenses to get any tax benefit. Alternatively, those costs could be added to the basis of the home if you didn't take the medical deduction, potentially reducing any taxable gain.

What counts as a "major improvement" versus just regular maintenance? Like if he replaced the water heater, does that count?

Thanks for the suggestion! Any specific apps you'd recommend? I'm definitely tired of trying to remember to write everything down, especially when I'm rushing between deliveries.

I've been using MileIQ for about 2 years and it's been really reliable. Stride is another popular one that's completely free and also helps track other business expenses. Everlance is good too - it has a free tier that lets you track up to 30 trips per month. The key is finding one that runs in the background without killing your battery. Most will let you export your mileage log as a PDF or spreadsheet at tax time, which looks way more professional than a handwritten notebook if you ever get audited.

This!!! I learned this the hard way my first year delivering. Didn't make quarterly payments and got hit with a penalty. The mileage deduction saved me though - turned a $3200 tax bill into about $850.

Wait, I think I might be confused now. My boss gives me cash at the end of each shift plus I keep the tips. He's never mentioned anything about a 1099 or being a contractor. Does that mean I'm an employee? How do I figure this out?

Thanks for breaking this down! Yes, my niece had almost no income in 2023 (less than $2,000 from a part-time job that didn't last). And for the baby, they both lived with me from birth in November through the entire year, and I provided well over 90% of all support. The father only lived there briefly and contributed almost nothing financially. Would bank statements showing I paid for diapers, formula, doctor visits, etc. be good evidence? And what about proof that they lived with me - would utility bills showing my address be enough?

Bank statements showing purchases of baby supplies and medical expenses would be excellent evidence. For proving they lived with you, utility bills are helpful, but even better would be: Medical records showing your address for the baby's appointments Any official documents like the birth certificate that might show your address Statements from doctors, childcare providers, or even neighbors confirming they lived with you Letters from social services or benefits offices if any benefits were received at your address The more documentation the better, but focus on official documents when possible. Also, if you can show that the father's address was different during most of this period, that would further strengthen your case.

Actually this isn't completely true anymore. With the new IRS systems, sometimes you CAN e-file even with a duplicate SSN claim. The system will accept it but flag it for review. A friend of mine was able to do this last year rather than paper filing.

What about retirement contributions? Do those reduce your qualified business income? I contribute to a SEP IRA and I'm wondering if that affects my QBI calculation.

Retirement contributions like SEP IRA, Solo 401(k), or SIMPLE IRA contributions do not directly reduce your QBI. These deductions are taken "above the line" on your personal tax return, but QBI is calculated at the business level before these personal deductions. However, retirement contributions do lower your overall taxable income, which can be beneficial if you're near the QBI phase-out thresholds. By reducing your taxable income through retirement contributions, you might avoid or reduce the phase-out limitations on your QBI deduction, potentially making more of your business income eligible for the full 20% deduction.

Generally, you'd want to keep them separate since the SSTB limitations would only apply to your consulting business. If you aggregated them, your rental income might get caught in the SSTB limitations. The regulations allow aggregation in certain cases but don't require it.

17 Quick question - for the home office deduction, does it matter if the space is also sometimes used for other things? Like, I have a desk where I package all my items, but sometimes my kids do homework there too.

22 For the home office deduction, the space needs to be used "regularly and exclusively" for business purposes to qualify. If your kids are doing homework at the same desk, unfortunately that area wouldn't qualify for the deduction since it's not exclusively business use. However, you might be able to claim a portion of your utilities, internet, and phone as business expenses based on the percentage used for business activities without taking the formal home office deduction. Just make sure you can reasonably justify the business percentage you're claiming if ever questioned.

5 Technically, the IRS requires you to report ALL income, regardless of the amount. There's no minimum threshold for self-employment income. If you earned $500 from your side business, you should report it. That said, self-employment tax (Social Security and Medicare) only kicks in when your net earnings are $400 or more. But income tax could still apply to amounts less than that, depending on your overall tax situation.