Thank you all for the helpful responses! I think I'm going to go with the de minimis approach since all my purchases are under $2,500 and it seems simpler than tracking depreciation. I'll definitely create that accounting policy document today. One final question though - if I buy something that costs more than $2,500 later this year, can I still depreciate that specific item even if I used de minimis for my other purchases? Or do I have to be consistent with one approach for all assets?

Great thread! Just wanted to add one more tip that helped me when I was starting out as self-employed - consider the timing of your purchases if you're expecting your income to vary significantly year to year. If you're in a lower tax bracket this year but expect higher income next year, immediate deductions (like de minimis) give you the tax benefit now when it might be worth less. But if you expect to be in a higher bracket in future years, depreciation spreads the deduction over time when it might be more valuable. For most new self-employed folks with the amounts you mentioned, de minimis is still probably the way to go for simplicity, but it's worth considering your income trajectory. Also, don't forget that if you're using part of your home as an office, you might be able to claim the home office deduction for that space too!

Has anyone here actually formed an LLC operating agreement that specifically includes the purchase of a business vehicle? I'm wondering if I need to update my operating agreement before purchasing a truck for my landscaping business.

Great question about the LLC and vehicle purchase! I went through this exact same situation with my small consulting business last year. One thing I'd add to all the excellent advice here - definitely talk to your insurance agent before you decide whether to title the vehicle in your personal name vs LLC name. When I put my truck in my LLC's name, my commercial insurance premium was almost double what personal auto insurance would have been. But my agent explained that if I titled it personally and just added business use coverage, I could save quite a bit while still being protected. Also, regarding the Section 179 deduction - make sure you have enough taxable income to take advantage of it. The deduction can't create a loss, so if your business only made $42k profit, you might not be able to deduct the full purchase price of a $45k truck in one year. In that case, regular depreciation might actually work better for your situation. And definitely keep those delivery receipts and customer records - they'll help prove the business use percentage if the IRS ever questions it. Congrats on the successful business year!

This is such a helpful thread! I was making the exact same mistake - I kept trying to use my take-home pay as the starting point for tax calculations because that's what I actually "received." But reading through everyone's explanations, it's clear that the IRS works backwards from gross income. What really clicked for me was understanding that my W-2 Box 1 is already a partially processed number - it's my gross income with certain pre-tax deductions already removed. So when I start my tax return with that Box 1 amount, I'm not starting with true gross income, but I'm also not starting with net income. It's this middle ground that represents my taxable wages before standard/itemized deductions. I think the confusion comes from thinking about our paychecks, where we see gross pay, then a bunch of deductions, then net pay. But tax returns don't follow that exact same flow since some of those paycheck deductions are already baked into the W-2 numbers we use.

This thread has been incredibly helpful! I work in payroll and see this confusion constantly with employees who don't understand why their tax calculations don't match their paycheck math. One thing I'd add that might help clarify: when you look at your final pay stub of the year, the year-to-date (YTD) gross pay amount is your true gross income. But your W-2 Box 1 will often be lower because it reflects gross pay minus pre-tax deductions like 401(k), health insurance, HSA contributions, etc. So the flow is: True Gross → W-2 Box 1 (gross minus pre-tax stuff) → AGI (Box 1 minus other adjustments) → Taxable Income (AGI minus standard/itemized deductions) → Tax calculation. The key insight is that you never actually use your "net" or take-home pay in tax calculations. Net pay is just what's left after taxes are withheld, but those withholdings are estimates that get reconciled when you file your return.

Trust your gut here - you're absolutely right to be suspicious. I went through this exact same situation with my dad two years ago when I was 23. He kept insisting his "tax guy" needed my complete 1040, but when I pressed for specifics, he got evasive just like your mom. Turns out he was just curious about my finances and his CPA had never actually requested my full return. The CPA only needed to verify my gross income and whether I met the support test - which can be done with a simple one-page summary. Here's what I ended up doing: I called the CPA's office directly and spoke with them myself. They confirmed they only needed my total income figure and an estimate of my annual living expenses. No forms whatsoever. When I told my dad this, he finally admitted he "just wanted to make sure I was doing okay financially." Given your $28K income and 4 months of independent living, you very likely provided more than half your own support anyway. I'd calculate that first before even engaging further with your mom about paperwork. If you're over the 50% threshold, the whole conversation becomes moot since she can't claim you regardless. Don't feel bad about protecting your financial privacy - you're an adult now and entitled to keep that information private unless there's a legitimate need to share it.

Your suspicions are completely justified! I work in tax preparation and can confirm that NO CPA should ever need your complete tax return to determine dependent eligibility. This is a huge red flag. The only information actually required is: - Your total gross income for 2024 ($28,000) - An estimate of your total annual support costs - How much of those costs you paid yourself That's literally it. Any legitimate tax professional knows this. Given your situation - earning $28K and living independently for 4 months while paying your own rent, food, and expenses - you almost certainly provided more than half of your own support. This means your mom legally CANNOT claim you as a dependent, regardless of what paperwork she has. I strongly recommend calculating your support test yourself before this goes any further. Include the fair market value of housing for your entire year (both the rent you paid independently AND what a comparable room would cost during your 8 months at home), plus food, utilities, transportation, etc. If you covered more than 50% of these total annual costs, case closed. Don't hand over your tax return. Offer to provide only the three pieces of information listed above if she insists her CPA needs verification. Any pushback after that confirms this isn't really about taxes. You're an adult and entitled to financial privacy. Trust your instincts here.

Glad to hear you figured out the timeline issue with your two 1095-A forms! Just a heads up - when you're filling out Form 8962 for your amended return, make sure to enter the information from both forms in the correct months. The form has columns for each month, so you'll input the January-May data from the first form and the June-December data from the second form. Also, double-check that the policy numbers are different between the two forms - that's another way to confirm they're for different coverage periods rather than one being a correction. If you run into any issues with the math on the 8962 (it can get tricky with mid-year plan changes), don't hesitate to reach out here again. Good luck with your amendment!

Another thing to keep in mind when filing your amended return - make sure to check Box C on Form 1040X to indicate you're making changes due to "Forms, schedules, or worksheets" since you're adding the 8962. This helps the IRS understand why you're amending. Also, if you received any advance premium tax credits during the year (which would show in column B of your 1095-A forms), you might end up owing money back or getting additional refund depending on your final income versus what you estimated when you enrolled. The 8962 reconciles all of this. One last tip - keep copies of both 1095-A forms with your tax records. Even though you're filing them with your amendment, having your own copies can be helpful if the IRS has any follow-up questions later.