That's a really smart idea! Do you make the transfers manually or have you set up some kind of automation? I'm worried I'll forget if I have to do it myself every time.

I started out making manual transfers, but that got annoying real quick. Now I have automatic transfers set up through my bank. Most payment platforms like PayPal and Stripe let you split incoming payments automatically. I have mine set to send 30% directly to my "tax" account and 70% to my regular account. If your platform doesn't offer split payments, see if your bank has automation features. Many banks now let you create rules like "when a deposit comes in from YouTube, transfer 30% to savings." Makes it totally hands-off which is perfect for absent-minded people like me!

I've had good luck with FreeTaxUSA for my content creation business. It handles Schedule C well and costs way less than TurboTax. Just make sure you track all your expenses throughout the year - that's the part most new creators mess up.

Does the first person to file always win? I heard that the IRS just automatically accepts whoever files first and then the second person is stuck fighting for it.

No, the first person to file doesn't automatically "win" - they just get their refund processed first. The IRS doesn't know there's a conflict until the second person tries to claim the same dependent with the same Social Security number. When the second return comes in claiming the same dependent, it gets flagged for review. The IRS will apply their tiebreaker rules (which favor the parent the child lives with most of the time) and may request documentation from both parties. It's just that the second filer will likely need to paper file and wait longer for their refund while this gets sorted out. The rightful claimant will eventually get the tax benefits they're entitled to, regardless of who filed first.

I don't think there's a way to "reserve" your dependent before filing. The IRS doesn't have a pre-filing verification system for dependents that I know of. Your best bet is to file electronically as early as possible and make sure you have documentation ready if there's a dispute.

Thanks for clearing that up! I must have misunderstood what someone told me. Sounds like I should just focus on filing early with good documentation instead.

What happens if you accidentally go over the contribution limit? I think I might have done that this year with my job change...

If you go over the contribution limit, you'll need to withdraw the excess contribution before your tax filing deadline (including extensions) to avoid a 6% excise tax penalty. The withdrawal process is called an "excess contribution removal." You'll need to contact your HSA provider to request this removal. When you withdraw the excess, you'll also need to withdraw any earnings associated with that excess contribution, and those earnings will be taxable income in the year you withdraw them. Your HSA provider should be able to calculate the attributable earnings for you. Make sure you specifically tell them it's an excess contribution removal, not just a regular distribution.

I've used both. Honestly they're pretty similar for HSAs. The investment growth itself doesn't change how you report anything - it just means your year-end value is higher than your contributions. Either software handles that fine because all they're doing is putting the numbers on Form 8889.

I switched from TurboTax to FreeTaxUSA this year and they handled my HSA perfectly fine - and saved me like $60. The HSA section asks all the same questions TurboTax did, including year-end value.

I heard about someone trying to deduct their wedding because they invited business clients! Did any of those crazy deductions actually work? Asking for a friend...

None of the truly outrageous ones work! The IRS isn't stupid, though my brother-in-law says he's occasionally surprised by legitimate deductions people don't know about. The wedding one is actually interesting - if you can prove certain clients were invited specifically for business purposes, a PORTION might be deductible as a business entertainment expense. But the entire wedding? Absolutely not. Some people try to claim their entire basement as a home office when they just have a desk in the corner - that's asking for an audit!

I'm convinced the IRS intentionally makes the forms confusing so we mess up and they can charge penalties. Has anyone tried those free filing programs? Are they actually helpful or just as confusing?

Thanks for the tip about confirming the zero amount! I just started entering my forms and noticed CashApp Tax did ask me about this. So that's normal then? And one more thing - should I be concerned about any penalties on the newer account since I'm 42 and took money out of a retirement account?

Yes, that confirmation step is completely normal! CashApp Tax is double-checking that you're telling it the distribution is non-taxable, which is correct for qualified Roth distributions. Regarding the newer account, since you're under 59½, you might face a 10% early withdrawal penalty on the earnings portion (but not on your contributions). However, there are exceptions to this penalty - like using the money for a first-time home purchase, certain education expenses, or if you have unreimbursed medical expenses exceeding a certain percentage of your income. The distribution code in Box 7 (you mentioned code J) suggests it's an early distribution, so CashApp Tax should calculate any applicable penalties automatically when you enter the form correctly. If you're eligible for an exception, make sure to indicate that when prompted by the software.

This is such a good point! I made the exact same mistake last year with distribution codes and ended up having to file an amended return because it showed my qualified Roth distribution as taxable when it shouldn't have been. Those tiny codes make a huge difference in the tax treatment.