Thanks for mentioning this! I had no idea this was even a thing. Do you know if there's any minimum income requirement to qualify for this deduction?

There's no minimum income requirement to qualify for the Qualified Business Income deduction, which is great news for situations like yours. As long as you have positive net income on your Schedule C (after all your deductions), you can generally claim this deduction. The calculation gets more complex if your total taxable income exceeds certain thresholds (around $170,050 for single filers in 2023), but for most interns with stipends, you'll likely qualify for the straightforward 20% deduction on your net business income. Just make sure your tax software includes this calculation - some free versions don't handle it well.

Second this! Also consider opening a SEP IRA if you can afford it - great way to reduce your taxable income and save for retirement at the same time.

Thanks for the input! That's definitely something I've been considering. Do you think there's any benefit to at least harvesting some gains to "reset" my cost basis higher in case the crypto keeps appreciating? I'm torn between letting it ride versus locking in some gains tax-free while I can.

That's a good point about resetting your cost basis. If you're confident in the crypto's long-term prospects, selling and rebuying to establish a higher cost basis could definitely help you in the future if prices continue to climb. I'd probably take a middle approach - maybe harvest enough gains to use up a portion of your losses while keeping some losses in reserve for future years. That way you're getting some tax benefit now while also positioning yourself better for future growth. It really comes down to your outlook on where crypto prices are headed and your personal cash needs.

As of the 2025 filing season, wash sale rules still don't apply to cryptocurrency. There have been proposals to change this, but they haven't been implemented yet. This is one of the few tax advantages crypto still has - you can sell at a loss and immediately repurchase to harvest the tax loss without waiting 30 days (which would be required for stocks and securities). Just make sure you're keeping detailed records of all transactions since the IRS is paying more attention to crypto reporting these days.

Is there a limit to how much can go into these accounts total? Like between what my employer puts in and what I might add?

Yes, there are annual limits to the total contributions that can go into retirement accounts. For 2024, the total contributions to a defined contribution plan (like a 401(k) or 403(b)) is capped at $69,000 or 100% of your compensation, whichever is less. This includes both employer and employee contributions combined. For traditional pension plans (defined benefit plans), the limits work differently and are based on actuarial calculations of what's needed to provide your promised benefit at retirement. Your benefits administrator at the union hall should be able to tell you exactly how much room you have for additional voluntary contributions based on your specific plan rules and the IRS limits.

I did this last year when I moved from a union job to management. Process wasn't too bad - contact your plan administrator and request a direct rollover to avoid tax withholding. Make sure you have an IRA already set up before you start the process. One thing to watch - some union pensions won't allow rollover until you're fully vested or have been inactive in the union for a specific period.

I tried looking for that option but couldn't find anything specific about overriding for Roth conversions. Do you remember exactly where in FreeTaxUSA that option appears? I've gone through the 1099-R section multiple times but might be missing something.

After you enter the 1099-R information, FreeTaxUSA should ask you follow-up questions about the distribution. Look for a question that asks something like "What type of account did you roll this distribution into?" or "Did you convert this distribution to a Roth IRA?" If you select the Roth conversion option, it should override the code G treatment. If you can't find it, another approach is on the review screen for the 1099-R. There should be a section showing the taxable amount calculated. There's usually a "This is incorrect" link nearby that lets you override the calculated amount. Click that and enter the full distribution amount as taxable.

I had the opposite experience - TaxSlayer confused me on a similar issue but FreeTaxUSA worked fine. Think it depends which screens you navigate thru. Did you try contacting your pension provider? Sometimes they'll issue a corrected 1099-R if you explain the situation.

15 Does the SIMPLE IRA allow for Roth contributions like his current solo 401k? I thought SIMPLE IRAs were all traditional pre-tax money. If he's been doing Roth contributions, wouldn't switching to a SIMPLE change his tax strategy pretty significantly?

22 You're absolutely right about the Roth consideration. SIMPLE IRAs don't have a Roth option currently - they're all traditional pre-tax money. This would be a significant change from the solo Roth 401k strategy. If maintaining Roth contribution capability is important, then a regular 401k plan with a Roth option would be needed despite the higher administrative costs. Some providers have started offering more affordable 401k options for small businesses that include Roth capabilities. The tax strategy difference is substantial - immediate tax deduction with traditional contributions versus tax-free growth and distributions with Roth.

11 I use Vanguard for my small construction business (7 employees). The transition from solo 401k was pretty straightforward - about $1200 setup fee and $800 annual administration fee. The bigger issue was the timeline - took about 2 months to get everything set up, so if you're planning to hire in March/April, start the process ASAP. The investment options are solid though, and their customer service has been helpful with the transition questions.