One thing nobody's mentioned - if you're paying $1,890/month with only a $340 subsidy, you might qualify for a larger subsidy depending on your income. The ACA subsidies were expanded for 2023-2025. Might be worth double-checking on healthcare.gov if your marketplace plan is giving you the maximum subsidy you're entitled to. Could save you more money than any tax deduction!

I went through this exact same situation last year! The key thing to understand is that there are actually TWO different types of health insurance deductions, and most people (including tax software) get them confused: 1. **Self-employed health insurance deduction** - This is the "above-the-line" deduction that reduces your AGI directly. You DON'T qualify for this since you're not self-employed. 2. **Medical expense itemized deduction** - This is where your ACA premiums (minus subsidies) can potentially be deducted, but only if you itemize AND your total medical expenses exceed 7.5% of your AGI. Based on your numbers ($32k AGI, $18,600 in net premiums after subsidies), you'd easily clear the 7.5% threshold ($2,400). The question is whether itemizing makes sense overall. Here's what I'd suggest: Make sure you're capturing ALL your medical expenses - not just premiums. Include copays, prescriptions, dental work, vision care, medical equipment, even mileage to medical appointments. Also don't forget about state income taxes paid, property taxes (if any), and charitable donations for your itemized total. Your situation actually looks like a good candidate for itemizing, unlike most ACA marketplace participants. Definitely worth running the numbers both ways before filing!

Quick question - does anyone know if the gift tax applies to cryptocurrency transfers? I was thinking of sending my sister some Bitcoin to help with her expenses but not sure if that triggers any reporting requirements.

Thanks everyone for all this helpful information! I had no idea about the lifetime exemption being so high - it really changes things knowing I'd just need to file a form but wouldn't actually owe tax. The suggestion about paying medical expenses directly is genius. I'm definitely going to contact his hospital about paying that $5k directly, and then I can help him with the remaining debt without going over the annual limit. One follow-up question though - when you pay medical expenses directly to providers, do you need any special documentation from the recipient to prove it was for their medical care? Or is the payment directly to the hospital/doctor sufficient proof for the IRS? Also really appreciate the recommendations for taxr.ai and Claimyr - might check those out if I run into any complications. This community is so much more helpful than trying to decode IRS publications on my own!

Our C-corp uses the annualized income installment method since our revenue is extremely seasonal (educational services company). It's worth noting that even with this method, we still had to pay an underpayment penalty last year because we miscalculated our Q3 payment. Make sure you're documenting your calculation methodology thoroughly and keeping detailed records of how you arrived at each quarterly payment amount. We now use Form 8936 (Annualized Income Installment Method) for each quarter even though it's technically only required at year-end filing. This creates a paper trail showing our good faith effort to comply.

Has anyone successfully requested a waiver for the estimated tax penalty? Our corporation had an unexpected loss in Q4 of 2023 that threw off our entire calculation for 2024 estimates because our prior year numbers suddenly dropped significantly.

What nobody has mentioned yet is that you should look up the "regular place of business" rule too. Even if your home doesn't qualify as your principal place of business, travel between multiple regular work locations is still deductible business mileage. So as a housecleaner with regular clients, you could potentially deduct miles between Client A and Client B (definitely business miles), and possibly still deduct miles from home to first client and last client to home depending on your specific situation. Just wanted to add this since there are multiple ways you might qualify for the deduction!

This is such a common confusion for mobile service providers! I'm a self-employed carpet cleaner and went through this exact same struggle last year. The good news is that you absolutely CAN deduct those miles from home to clients even without a dedicated home office. Since you're doing all your business administration (scheduling, invoicing, client communications) from your kitchen table, your home qualifies as your "administrative headquarters" or "tax home" under IRS rules. I was initially scared to take this deduction because I thought I needed an official home office, but after consulting with a CPA who specializes in service businesses, I learned that the home office deduction and business mileage deduction are completely separate things. Your home can be your principal place of business for mileage purposes without meeting the strict "exclusive use" requirement for the home office deduction. What really helped me was keeping detailed records showing that my home is truly my business hub - screenshots of my scheduling software, photos of my invoicing setup at the kitchen table, records of client calls made from home, etc. The IRS wants to see that your home isn't just where you sleep, but where you genuinely conduct your business operations. At 120-150 miles per week, you're looking at potentially $3,000+ in annual deductions at current rates. Definitely worth getting this right!

My accountant told me most software engineers aren't SSTBs unless your primarily doing consulting. He said to track hours for each type of work. Anybody using Quickbooks for this? How do you categorize your services?

I've been dealing with this exact issue for the past two years with my software engineering business. What really helped me was creating a simple tracking system where I log my activities daily - either "Development" (coding, testing, implementation) or "Consulting" (meetings, architecture discussions, recommendations without implementation). The IRS looks at the substance of what you're actually doing, not just your job title. If you're spending most of your time writing code and building solutions, you're likely in the clear for QBI. But if you're mostly in meetings giving advice without actually creating the software yourself, that could be problematic. One thing that caught me off guard - even project management and client communication can blur the lines. I now make sure my contracts explicitly state that I'm being hired to "develop and implement software solutions" rather than just "provide software consulting services." The language matters more than you'd think. Have you considered restructuring how you bill clients? Breaking out development work separately from any advisory work could help establish a clear pattern that most of your business is non-SSTB.