Actually I did start a small side business this year that lost about $3,800, and I sold some long-term investments that had gained around $4,200. I wonder if those mostly canceling each other out contributed to this situation.

That explains it perfectly! Your capital gains from the investments were likely offset by your business losses. Since they were long-term gains, they're taxed at a different rate than ordinary income, but the business loss can offset both types of income. Your tax preparer did a good job navigating this. If you're planning to continue the side business, you might want to talk to them about estimated tax payments for next year, especially if you expect the business to become profitable. This break-even situation probably won't repeat unless you have a similar pattern of gains and losses.

100% agree! I've been adjusting my withholding for years to get as close to zero as possible. Put the difference in a high-yield savings account throughout the year instead of giving the government an interest-free loan.

I used this option back in January and it took almost 3 weeks! I think it depends on the time of year and how busy the IRS is. Right now with tax season ramping up, I wouldn't count on it being quick.

Wait really? I can still make charitable donations now that count for 2023? Does this work if I take the standard deduction or only if I itemize?

This only works if you itemize your deductions. If you're taking the standard deduction, additional charitable contributions won't help reduce your taxes. The standard deduction for 2023 is $13,850 for single filers, so your total itemized deductions (including charitable contributions, mortgage interest, state and local taxes up to $10,000, etc.) would need to exceed that amount to make itemizing worthwhile. For your 2023 taxes, there's unfortunately no above-the-line charitable deduction available for those taking the standard deduction. That was a temporary COVID provision that has expired.

Thanks for the rental property tips! I actually did quite a few visits last year but wasn't tracking mileage. Can I estimate it now based on my address and the property address for those trips I know I made?

You can use a reasonable estimate based on the distance between your home and the rental property multiplied by the number of trips you can substantiate. Just be prepared to justify those trips if asked - having calendar entries, texts with tenants, or receipts from the same days as your visits can help establish that you actually made those trips. For future reference, it's best to keep a contemporaneous mileage log with dates, starting/ending mileage, and the purpose of each trip. Many people use smartphone apps for this now, which makes it much easier to track.

Yes actually I did get short-term disability for about 6 weeks, but it wasn't much (about $3,200). I didn't realize that might count differently! Does disability count as earned income for the child tax credit calculation? I did qualify for the EITC which helped, but was still counting on more from the child tax credit since I got the full amount last year.

Short-term disability payments generally don't count as earned income for purposes of the child tax credit calculation. Earned income typically includes only wages, salaries, tips, and net earnings from self-employment. That explains part of your situation. If your W-2 wages were $6,630 but some of your total income came from disability payments, then only the W-2 amount would count toward the earned income calculation for the Additional Child Tax Credit. Good that you qualified for the EITC though - with two children and your income level, that can be a significant help.

You can definitely file an amended return using Form 1040-X, but there's a 3-year deadline from the original filing date. So if you're talking about last year's taxes, you have plenty of time. Just make sure you have documentation for everything and be prepared for a long wait - amended returns can take 16+ weeks to process right now.

That's an interesting idea I hadn't considered! My friend actually has some web design experience that could help my online store. Would I need to file any special paperwork if I paid him as a contractor? And would this potentially impact any benefits he currently receives?

If you pay him as a contractor and it's $600 or more in a year, you'll need to issue a 1099-NEC form to both him and the IRS. It's pretty straightforward - you'll need to get him to fill out a W-9 form first to collect his tax information. As for benefits, that's definitely something to consider. Earned income could potentially impact certain government benefits he receives, depending on the programs and income thresholds. This is something he should look into carefully before you proceed, as the extra income might reduce benefits by more than the amount earned in some cases. He might want to check with his benefits counselor to understand exactly how additional income would affect his specific situation.

This is super helpful! Does inventory include shipping costs to get the products to me? Or are those separate expenses?