Can you explain more about the QBI deduction? I thought that was only for certain types of businesses. Does it apply to all self-employed people regardless of what service they provide?

The QBI deduction applies to most self-employed individuals, sole proprietors, partnerships, and S corporations. There are some limitations if you're in certain "specified service trades or businesses" like health, law, accounting, etc., and if your income is above certain thresholds (around $170,500 for single filers in 2022). For most freelancers making under that threshold, including graphic designers, you'll likely qualify for the full 20% deduction on your business profits. The calculation gets more complex at higher income levels or for certain professions, but tax software usually handles this automatically. It's basically free money that reduces your taxable income (though it doesn't reduce self-employment tax), so definitely don't miss out on it!

I've used QuickBooks Self-Employed for 2 years and it's pretty good for the basics. The mileage tracker works well if you remember to use it. The quarterly tax estimator is helpful but sometimes feels a bit off. The expense categorization is decent but you still need to review everything.

What's the 941-X form? My payroll company said they'd handle everything but now I'm worried they might miss something.

Form 941-X is the Adjusted Employer's Quarterly Federal Tax Return that you need to file to claim the ERC retroactively. It's essentially an amendment to your original quarterly tax filings. Most payroll companies are good with regular payroll processing but many don't have specialized experience with ERC claims on the 941-X. The form requires specific line items to be completed in a certain way to properly claim the credit. I'd recommend asking your payroll company specifically about their experience processing ERC claims via 941-X and what their success rate has been. If they seem vague or uncertain, you might want to consider a specialist firm instead.

I heard they resumed processing in January 2024 but they're going through claims much more slowly and with more scrutiny. Has anyone had an ERC claim processed successfully this year?

What specific things do you think software would miss in my situation? I'm trying to get a sense of what the actual value would be beyond just filling in forms correctly.

Software often misses timing strategies for realizing capital gains and losses that could significantly impact your tax burden. With your large gain, spreading recognition across tax years might have been beneficial, but that opportunity may have passed depending on how the sale was structured. Software also tends to be limited in integrating business expenses with personal tax strategy. With your wife's solo business, there are potential entity structure considerations and retirement planning opportunities beyond just the solo 401k that might optimize your overall tax situation. The interplay between her business income, your capital gains, and your retirement planning needs a holistic approach that most software simply isn't designed to provide.

I used TaxAct for a similar situation (sold rental property with big gains) and it handled everything fine. Way cheaper than TurboTax but still walks you through all the capital gains stuff step by step. Their investor edition is specifically designed for this kinda thing.

That's a really good point I hadn't considered. So you're saying that based on the residency test, my sister might not actually be eligible to claim my niece anymore since she's been living with me for most of the year? I definitely don't want either of us to get audited. Do you know if there's any exception to this residency test? Like if there's some kind of temporary arrangement or something? We didn't really think about the tax implications when my niece came to stay with me.

Yes, that's exactly what I'm saying. The residency test is pretty clear - a qualifying child must live with the taxpayer for more than half the year. With your niece living with you for 9+ months, your sister likely doesn't meet this requirement anymore. There are some exceptions to the residency test, but they're limited to specific situations like temporary absences (medical care, education, vacation, etc.), children of divorced or separated parents with a formal agreement, or kidnapped children. From what you've described, it doesn't sound like any of these exceptions would apply in your situation. I'd recommend having an honest conversation with your sister about the tax situation. The IRS would consider you to have the stronger claim to be the qualifying taxpayer for your niece based on the residency test.

This is the right answer! The residency test is super important for determining who can claim a dependent. If the niece lives with OP for most of the year, the sister technically shouldn't be claiming her unless there's a special exception. In my experience, the tax benefits for the person who has the child living with them (HOH status + child tax credits) are usually much better than just claiming a dependent who doesn't live with you. Might be worth both sisters calculating their taxes both ways to see what makes the most financial sense for the family as a whole.

Thanks for this suggestion! I checked and sadly freetaxusa doesn't have direct API integration with Robinhood for crypto yet. I did contact Robinhood support about the missing info, and they said that if my crypto activity didn't meet certain thresholds, it wouldn't be included on the 1099 but I'm still required to report it. Super annoying! Do you know if requesting the corrected 1099 takes a long time? I'm trying to file soon.

Requesting a corrected 1099 can definitely take some time, usually 2-3 weeks in my experience. But honestly, it might not help in your situation. If your crypto activity didn't meet their reporting thresholds, they're technically not required to include it on a 1099, so a "corrected" form would likely be identical. Your best bet is probably to download the transaction history yourself and manually calculate everything, or use one of the crypto tax services mentioned by others. If you're in a rush to file, you could also consider filing for an extension to give yourself more time to sort this out properly. Just remember an extension gives you more time to file, not more time to pay any taxes due.

This is terrible advice. ALL crypto transactions need to be reported regardless of amount. The IRS has been cracking down on crypto specifically and the question about virtual currency is right on the front page of Form 1040. Ignoring it is literally asking for an audit.