Thanks for this simple explanation. I was overthinking it completely. So just to confirm - even though the seller gave me money for their portion of the taxes, when I pay the full bill next year, I still deduct the entire amount?

Exactly right, Sofia! You deduct the entire amount you pay in 2025. Think of it this way - the seller credit essentially reduced what you paid for the house, so when you pay the full tax bill, you're paying for the full year of ownership responsibility. The IRS doesn't care that part of those taxes were "economically" the seller's - they only care about the actual cash payments you make to the tax authority.

This is really helpful! I'm also a first-time homeowner and was worried I was missing out on a deduction this year. Quick question - when you say to keep the escrow analysis statement, should I be looking for a specific form or document name? My mortgage company sends me so many different statements and I want to make sure I'm saving the right one for tax purposes.

The pretax employer premium at $515/month saves you roughly 30% in taxes depending on your tax bracket (federal + FICA). So that's about $154/month in tax savings. Marketplace: $560/month = $6,720/year Employer: $515/month = $6,180/year Tax savings with employer: ~$1,854/year So financially, your marketplace plan costs about $2,394 more annually when including lost tax benefits. BUT, the $3,500 lower deductible could make up for that if you expect to need significant healthcare. If you hit both deductibles, the marketplace plan would actually save you about $1,106 annually.

This is super helpful breakdown, thanks! I'm pretty healthy but you never know when something unexpected might happen. Think I'll go with marketplace since high deductible scares me more than tax benefit. Wish the system wasn't so complicated tho!

This is a really important point about HSAs that I hadn't considered! I don't think my employer offers an HSA option with their plan - it's just a regular PPO with high premiums and high deductible (worst of both worlds honestly). @Madeline Blaze Do you know if marketplace plans can be HSA-eligible? I ve'heard mixed things about whether you can open your own HSA if you buy insurance outside of your employer. If I could get a high-deductible marketplace plan AND contribute to an HSA, that might actually make the math work out better even with the tax disadvantage on premiums. Also wondering if anyone knows - can you contribute to an HSA if you re'eligible for your employer s'health plan but choose not to take it? The HSA triple tax advantage sounds amazing if I can actually access it.

YouTube income is a bit different since it's typically reported on a 1099-K rather than a 1099-NEC. The nominee process would be similar, but there might be additional considerations around intellectual property and digital content creation. Your son's YouTube activity would likely be considered a business, so you'd still report it on Schedule C and then attribute it to him. Just make sure you keep good records of all channel-related expenses for deductions!

Great questions about the exemptions! You're right that the type of work can make a big difference. From what I understand, there are several exemptions for minors under 18: 1. Domestic service (like babysitting, house cleaning) - exempt from self-employment tax 2. Newspaper delivery - traditionally exempt, though this is becoming less common 3. Work for parents' business - different rules apply depending on the business structure For camp counseling, that would typically be subject to self-employment tax since it's more of a professional service. Pet-sitting through an app might fall under domestic service depending on how it's structured. The IRS Publication 15 (Employer's Tax Guide) has some of this info, but honestly it can be pretty confusing to parse through. You might want to check with a tax professional or use one of those specialized tax analysis tools that others mentioned to make sure you're applying the right exemptions. And yes, definitely set up that Roth IRA! Starting at 17 with even small contributions could literally be worth hundreds of thousands more at retirement compared to starting in their 20s.

This is really solid advice, especially about calling them today. I had a similar situation a couple years ago and made the mistake of waiting "just another week" for some paperwork - ended up with way more complications than if I'd just called immediately. The temporary hold option is clutch if you can get through to them. And Dylan's right about the communication piece - the IRS agents are actually pretty reasonable when you proactively reach out versus them having to chase you down. They deal with people who completely ignore notices all day, so when someone calls to explain their situation, they're usually willing to work with you. One thing to add - if you do end up setting up that payment plan, you can always pay it off early once you get your refund. The plan just buys you time and stops the collection process.

This is exactly the kind of real-world experience that helps! Two hours on hold is rough but definitely worth it to get that 90-day breathing room. I'm curious - when you called, did you have to provide any specific documentation or proof that you were waiting for tax documents, or did they just take your word for it? I'm planning to call tomorrow morning and want to be prepared with whatever info they might need. Also, did they give you any kind of confirmation number or paperwork about the collection hold, or was it just noted in their system? Thanks for sharing your experience - it's really reassuring to hear from someone who went through the same thing!

@223ee46b4e6f They didn't ask for any documentation when I called - they just took my word for it since I was being proactive about contacting them. I explained I was waiting for a specific W2 from my summer employer and gave them the company name and approximate dates I worked there. They did give me a confirmation number for the collection hold, which I wrote down immediately (wish I could remember it now, but it was something like a 10-digit number starting with "CH" - definitely keep whatever number they give you!). The agent also told me the exact date the hold would expire, which was super helpful for planning. Pro tip: when you call, have your Social Security number, the notice number from your letter, and the amount you owe ready. Also be prepared to explain exactly what documents you're waiting for and from whom. The more specific you can be, the more helpful they tend to be. Good luck with your call! The wait time sucks, but it's totally worth it to get that peace of mind and stop the collection process.

This is incredibly helpful, thank you! I'm actually in the middle of this process right now and was getting overwhelmed by all the conflicting information I found online. Your point about the Operating Agreement is especially valuable - I hadn't even thought to check if there were provisions that could disqualify the S Corp election. Quick question: when you mention "disproportionate distributions," what exactly should I be looking for in my Operating Agreement? My business partner and I have equal ownership (50/50), but I want to make sure there's nothing hidden in the language that could cause issues. Also, did you have to notify your state at all about the S Corp election, or was it purely a federal filing?

Great question about disproportionate distributions! In your Operating Agreement, look for any language that allows profits or losses to be allocated differently from ownership percentages. For example, if you and your partner both own 50%, but the agreement says one partner gets 60% of profits in certain situations, that would disqualify S Corp status. Also watch out for clauses about "preferred returns" or different classes of membership interests with varying rights. S Corps can only have one class of stock, so your LLC needs to mirror that - equal rights to distributions and liquidation proceeds based on ownership percentage. As for state notification, it was purely federal in my case (I'm in Texas). The S Corp election is just a tax treatment choice with the IRS - your LLC remains an LLC under state law. However, some states do have different tax implications for S Corps, so it's worth checking with your state's revenue department or a local CPA to understand any state-level tax changes. Since you have 50/50 ownership, you're likely fine as long as your Operating Agreement doesn't have any special allocation provisions. Most standard LLC agreements for equal partners are S Corp compliant, but definitely worth having someone review it before filing Form 2553.

Thanks for sharing your experience! The reasonable compensation requirement is something I completely overlooked when considering S Corp election. Can you elaborate on what "reasonable" means in practice? I'm wondering if there are specific guidelines or if it's more subjective. Also, did you set up payroll processing before or after receiving confirmation of your S Corp election? I'm trying to figure out the timing of when I need to start treating myself as an employee versus just taking owner distributions.