Just to clarify something that might help others - there's actually been some changes to the Child Tax Credit over the years that can cause confusion. For 2024 tax year (filing in 2025), the credit is $2,000 per qualifying child under 17, with up to $1,700 being refundable through the Additional Child Tax Credit. The key point everyone's made is correct - no minimum income required for the Child Tax Credit itself. But if you have very low or no income, you'll mainly benefit from the refundable portion (up to $1,700 per child). The non-refundable portion can only offset actual tax liability. Make sure your children have valid Social Security Numbers (not ITINs) to qualify for the full credit. Also, with your income under $10,000, you should definitely file a return even if not required to - that's the only way to get the refundable portion back as a refund.

I want to add something that might help clarify the confusion you're experiencing. The Child Tax Credit has NO minimum income requirement - you can have $0 in income and still qualify. What you might be thinking of is the Earned Income Tax Credit (EITC), which does require earned income. However, here's the important part for your situation with under $10,000 income: while you can qualify for the Child Tax Credit, the benefit you actually receive depends on whether it's refundable or non-refundable. For 2024 (filing in 2025), up to $1,700 per child is refundable through the Additional Child Tax Credit - meaning you can get this as a refund even with no tax liability. The key requirements for your kids (ages 4 and 7) are that they: - Have valid Social Security Numbers (not ITINs) - Lived with you for more than half the year - Are under 17 at the end of the tax year - You provided more than half their support You should definitely file a return to claim this credit, even if your income is below the filing threshold. With two qualifying children, you could potentially get up to $3,400 back as a refund ($1,700 × 2) regardless of your low income level.

Quick question - does anyone know if this NUA strategy still makes sense if you're going to be in a lower tax bracket in retirement? I'm trying to decide between traditional NUA and just rolling everything to an IRA and taking distributions later.

This is a great discussion and really helpful for understanding NUA taxation. One thing I'd add for anyone considering this strategy - make sure to understand the timing requirements. You have to take the entire distribution of your employer stock in the same tax year to qualify for NUA treatment. You can't spread it out over multiple years. Also, there's a "lump sum distribution" requirement that means you have to distribute your entire 401k balance within one tax year after a qualifying event (like separation from service). You can't just take out the employer stock and leave other funds in the 401k. The IRS is pretty strict about these requirements, so if you're planning an NUA transaction, work closely with both your 401k provider and tax advisor to make sure you meet all the criteria. Missing any of these requirements means you lose the favorable tax treatment and everything gets taxed as ordinary income.

Does anyone know if you can bundle these kinds of donations with your regular charitable giving to help hit the itemized deduction threshold? My tax guy isn't very clear on this, and I'm below the standard deduction by about $1000, but I gave almost $2000 to various gofundmes this year.

I went through this exact same situation last year and learned the hard way that documentation is everything. Even if you think a GoFundMe might qualify (like when it mentions partnering with a charity), you need official receipts from the actual 501(c)(3) organization to claim any deduction. What I ended up doing was keeping detailed records of all my GoFundMe donations in a separate spreadsheet with notes about why I donated and whether there was any charitable organization involvement. While most weren't deductible, it helped me identify a couple that actually were connected to registered nonprofits - but only after I contacted those organizations directly for proper tax receipts. For future reference, if you want to help individuals while still getting tax benefits, consider looking into donor-advised funds. Some allow you to recommend grants to help specific people in need while still qualifying as charitable deductions since the fund itself is a qualified charity. It's not as direct as GoFundMe, but it's an option for people who want both the personal connection and the tax benefit.

Just wondering - have you considered waiting until next year to sell some of the shares? If you hold them in your brokerage account for a year before selling, wouldn't that remove any confusion about the long-term status?

Great thread! I'm going through a similar situation with my NUA distribution. One thing I'd add is to make sure your former employer properly coded the distribution on their end too. I found out the hard way that if the 401k administrator doesn't mark it correctly as an "NUA-eligible distribution," it can create problems downstream even if you do everything else right. The distribution needs to be part of a "qualifying event" (like retirement or separation from service) and needs to be a lump-sum distribution of your entire account balance within one tax year. Also, double-check that you didn't accidentally have any company stock in a Roth 401k portion - those shares don't qualify for NUA treatment and need to be handled differently. The rules are pretty strict about what qualifies, so it's worth confirming all the boxes are checked before you start selling shares. The good news is once it's done correctly, you'll have a lot more flexibility in managing your tax burden when you do decide to sell!

Did anyone mention that you CAN actually "pay yourself" for labor on a business vehicle if you have the right structure? I'm a mechanic with an S-corp and I've been paying myself as an employee to work on company vehicles. Company pays me, company deducts it as an expense, I report income on my personal return. My accountant confirmed this is legit if done properly with proper documentation and reasonable rates. You need the right business structure though.

Great question! As someone who's dealt with similar situations in my own small business, I can confirm what others have said - you unfortunately can't deduct your own labor costs even when working on business vehicles. The IRS is pretty strict about this because no actual cash expense occurred. However, don't overlook some other potential deductions that might apply to your situation: - If you have a dedicated workspace at home for your business (even just for paperwork, ordering parts, etc.), you might qualify for the home office deduction - Tools and equipment used for the repairs can be deducted or depreciated - Any training or certification costs to maintain your mechanic skills - Professional subscriptions, trade publications, or software related to your work Also, keep detailed records of everything! Even though you can't deduct the labor, having documentation of the work you performed, time spent, and fair market value could be helpful if you ever get audited - it shows you're running a legitimate business operation. The $3,200 in parts is definitely deductible as you mentioned, and that's still a significant write-off. Sometimes focusing on what we CAN deduct rather than what we can't helps put things in perspective.