One thing nobody has mentioned - if you have proof that your ex knowingly claimed your child incorrectly (like text messages where he admits it), you should consider reporting him for tax fraud using Form 3949-A. The IRS takes this stuff seriously, especially if there's a pattern.

I'm so sorry you're dealing with this - it's incredibly frustrating when an ex tries to pull something like this! As others have mentioned, you're absolutely in the right here. Since you have full custody, you're the custodial parent and entitled to claim your daughter. I'd recommend filing your paper return ASAP and including a clear cover letter explaining that you're the custodial parent with full legal and physical custody. Attach copies of your custody agreement (highlight the relevant sections), school enrollment records showing your address, and any medical records that show you as the primary contact. The more documentation you provide upfront, the smoother the process will be. One tip that helped me when I dealt with IRS paperwork - send everything certified mail with return receipt so you have proof of delivery and timing. Keep copies of everything you send. The waiting is the worst part, but stay strong! The IRS will sort this out correctly, and your ex will likely think twice about trying this again once he realizes the consequences. Focus on documenting everything properly and let the system work - you've got this!

I've been following this thread closely as I'm in a similar situation with employer-paid disability premiums. One thing I wanted to add that might help others - if you're still unsure about your specific situation after reviewing your plan documents, you can also request a written clarification from your benefits administrator or payroll department. I did this last year when I couldn't determine from my paystub whether the premiums were being treated as taxable income. I sent a simple email asking: "Are the disability insurance premiums paid by the company included in my taxable wages, and if so, in what amount?" They responded with the exact dollar amounts and confirmed the tax treatment. This documentation became really valuable when I was preparing my taxes, and it also helped me understand that I had the option to change my election during the next open enrollment period. Sometimes the most direct approach - just asking your employer's benefits team - can save a lot of confusion and research time. The key is asking for the information in writing so you have it for your tax records, rather than relying on a verbal explanation that you might misremember later.

As a newcomer to this discussion, I'm really grateful for all the detailed explanations here! I'm dealing with a similar situation where I just started a new job that offers disability insurance, and I had no idea there were different tax treatments depending on how the premiums are structured. One question I have after reading through all these responses - if my employer gives me the choice between having them pay the premiums (making future benefits taxable) versus having the premiums deducted from my after-tax pay (making future benefits tax-free), how do I decide which option is better? Is there a rule of thumb for evaluating whether it's better to pay tax on the smaller premium amount now versus potentially paying tax on larger benefit payments later if I ever become disabled? I imagine it depends on factors like my current tax bracket, expected future tax rates, and the likelihood of actually needing the benefits, but I'm not sure how to weigh all of that. This thread has already taught me so much about disability insurance taxation that I never knew before!

16 I'm in the exact same situation and my accountant advised something different than what others are saying here. He told me that since I own more than 2% of the S-Corp, health insurance has to be handled as additional compensation on my W-2, then I deduct it as self-employed health insurance on my personal taxes. He said S-Corps can't use QSEHRA for owners with >2% ownership. Is this right??

As someone who's been through this exact scenario, I can confirm what others have mentioned about the >2% shareholder rules. The key thing to remember is that even though the reimbursements have to go through your W-2 as taxable wages, you still get the tax benefit through the self-employed health insurance deduction on Line 16 of Schedule 1. One thing I'd add that hasn't been mentioned - make sure you keep detailed records of the actual premium amounts your spouse's employer deducts from their paychecks. The IRS may want to see that the reimbursements from your S-Corp don't exceed the actual premiums paid. Also, the reimbursement timing matters - you generally need to reimburse in the same tax year the premiums were paid. The formal plan documentation is absolutely critical. I learned this when helping a friend who got audited - the IRS disallowed all their health insurance deductions because they couldn't produce the required corporate resolutions and plan documents, even though they had been reporting everything correctly on their tax returns.

Hey Diego! I totally get the frustration with that CPA consultation - sounds like you got the classic "it's complicated, pay me more" response without any real help. Here's the thing about sales tax for artists: everyone makes it sound way scarier than it needs to be when you're starting out. You're in Florida, so let's keep this super practical: **Step 1**: Register for your Florida sales tax permit online at the Department of Revenue website. It literally takes 15-20 minutes and costs nothing. **Step 2**: For sales to Florida customers - collect 6% state sales tax on physical artwork. Digital downloads are tax-free in Florida (lucky you!). **Step 3**: For out-of-state customers - don't collect anything until you hit $100,000 in sales to that specific state in a year. **Step 4**: File quarterly returns in Florida (even if you owe $0). That's it to start! Use a platform like Etsy, Shopify, or even Square that automatically calculates the right tax rates including local taxes. They handle all the math so you don't have to figure out Orlando's specific local rates. The "nexus" stuff your CPA mentioned only becomes relevant once you're doing serious volume in other states. Right now, focus on getting Florida right and actually making those sales happen. You can always layer on complexity later when your income justifies hiring better help. Don't let tax anxiety kill your artistic momentum - you've got this! 🎨

Diego, I completely understand your frustration! I went through the exact same thing when I started my handmade ceramics business a few years ago. That feeling of being ready to sell but totally lost on the tax side is so stressful. Here's what I learned after making some mistakes and finally getting it right: Start with the absolute basics and don't try to solve every possible scenario upfront. Since you're in Florida, here's your immediate action plan: 1. Go to Florida's Department of Revenue website and register for a sales tax certificate (DR-1) - it's free and takes maybe 30 minutes 2. For Florida customers buying physical art: collect 6% + local sales tax (platforms like Shopify handle this calculation automatically) 3. For Florida customers buying digital art: no tax needed (Florida doesn't tax digital products) 4. For customers in other states: don't collect anything until you hit significant sales volume there The key insight that changed everything for me: you're not expected to be an expert on all 50 states' tax laws from day one! Focus on doing Florida correctly, keep detailed records, and expand your tax compliance as your business actually grows into other states. I use Shopify for my online sales and it handles all the tax calculations, collection, and even provides reports that make quarterly filing much easier. The small monthly fee is absolutely worth not having to manually calculate tax rates for every sale. Don't let tax confusion delay your art business launch - you've got customers waiting! Set up Florida properly and start selling. You can always refine the process as you grow.

Watch out for state tax issues too with your LLC sale! Federal is only part of it. Some states treat these sales differently and you might face surprising state tax bills. I sold my LLC in California and got hammered with state taxes I hadn't planned for because my accountant only focused on federal. Double check your state's treatment of goodwill and intangible assets before finalizing anything.

This is such a complex area that really deserves careful planning. One thing I'd add to the excellent advice already given - make sure you get a professional business valuation done before finalizing your sale structure. This isn't just helpful for negotiations, but it's crucial documentation if the IRS ever questions your asset allocation on Form 8594. A formal appraisal can help support the value you're assigning to goodwill versus tangible assets, which directly impacts whether you're paying capital gains or ordinary income rates. The cost of a good business appraiser (usually $3k-8k depending on complexity) is often a fraction of what you could save in taxes with proper allocation. Also, timing matters more than people realize. If you're close to a year-end, consider whether pushing the sale into the next tax year might help with your overall tax situation, especially if you have other capital gains or losses to consider. The interplay between federal and state taxes that others mentioned is real - I've seen people save five figures just by timing their sale strategically.