4 I think an important factor nobody's mentioned is FUTURE plans for the app. If you intend to keep developing it, adding features, or creating more apps, the IRS would likely see this as an ongoing business activity rather than a hobby. One advantage of filing as self-employed now is that it establishes a pattern if your app income increases in the future. It's easier to start as self-employed and stay consistent than to switch from hobby to self-employed when profits increase.

I'm dealing with a similar situation with my freelance graphic design work that I do occasionally on weekends. Based on everything I've read here and my own research, it really seems like the profit motive test is key. The fact that you deliberately switched your app from free to paid shows clear intent to generate profit, even if the amount is small. That's probably the strongest indicator that this should be treated as self-employment rather than a hobby. I'd also consider what you plan to do going forward. Are you going to keep the app paid? Might you develop other apps? Even small actions like adjusting pricing or promoting the app could further demonstrate business intent. The expense deduction issue is huge too. Losing the ability to deduct that $125 developer fee means you're essentially paying taxes on income you didn't actually receive after expenses. That seems fundamentally unfair and not what the tax code is designed to do. I think I'm leaning toward Schedule C for my own situation after reading all these responses. Better to establish the pattern now while everything is well-documented and straightforward.

One thing nobody's mentioned yet about HSAs: if you're trying to decide whether to reimburse yourself now or let the money grow, consider your current tax bracket vs future bracket. If you expect to be in a higher tax bracket in retirement (which might happen with required minimum distributions from traditional accounts), it might make more sense to reimburse yourself now and use that money for expenses, rather than pulling more from taxable accounts. Conversely, if you're in your peak earning years now, letting that HSA money grow and reimbursing yourself in retirement could be smartest. Either way, KEEP YOUR RECEIPTS. Can't stress this enough. Digital copies with cloud backup.

Don't overthink the reimburse-then-contribute strategy. Simplest way to look at it: 1. You have a yearly HSA contribution limit ($3,850 individual/$7,750 family for 2023) 2. If you're not already maxing out your contributions, just contribute more without the reimbursement step 3. If you ARE maxing out, then there's no additional tax advantage to the reimburse-then-contribute cycle The real magic of HSAs is the option to pay expenses out-of-pocket now and reimburse yourself years later. I've been doing this for 6 years and have about $14k in "banked" medical expenses I can withdraw tax-free whenever I want, while my actual HSA has grown to over $45k.

I've been through this exact situation with my LLC running both a landscaping service and freelance graphic design work. One thing that hasn't been mentioned yet is the quarterly estimated tax payments - you'll need to calculate these based on the combined income from all your business activities under the LLC. Also, for your specific businesses (dog grooming, food cart, web development), make sure you research any special licensing requirements for each. The food cart especially might have health department permits and potentially different insurance requirements than your other activities. Some states also have specific regulations about mobile businesses that could affect your LLC structure. The separate bank accounts advice is spot on - even if you use one main account, at minimum get a business credit card dedicated to each activity. It makes expense tracking so much cleaner when tax time comes around.

I'm running into a similar situation with my LLC that handles both my freelance writing business and a small Etsy shop selling handmade jewelry. One thing I learned the hard way is to make sure you're tracking your time spent on each business activity, not just the income and expenses. This becomes super important if you ever want to claim the home office deduction - the IRS wants to see how you're allocating that space between different business uses. I use a simple time tracking app to log hours for each business, which helps me determine what percentage of my home office expenses should go to each Schedule C. Also, @Chloe Zhang, since you mentioned a food cart, definitely check with your local health department early. In my area, food service businesses have to register separately even if they're under an existing LLC, and the inspection requirements are pretty strict. You don't want to get everything set up only to find out you need additional permits or modifications to operate legally. The banking situation really does make a difference for organization. I started with one account and it was a nightmare trying to separate everything come tax time. Now I use separate business checking accounts - yes, there are monthly fees, but the time savings and peace of mind are worth it for me.

2 Does anyone know if you need to submit proof of expenses to your HSA administrator when you reimburse yourself? My HSA is through HealthEquity and their website just lets me request distributions without uploading any documentation.

Great question! You're absolutely on the right track with your HSA strategy. Since you established your HSA on October 15th, any qualified medical expenses from that date forward are eligible for reimbursement - which means your November procedure definitely qualifies. You can contribute up to the 2025 maximum ($4,300 for individual coverage, or $8,550 for family coverage if you're 55+) regardless of when during the year you opened the account, thanks to the "last-month rule." Just make sure you maintain your high-deductible health plan through December 2026 to avoid any penalties. Your reimbursement strategy is spot-on too. You can reimburse yourself the current $1,300 now and the remaining $3,000 later as you build up the account. There's no deadline for HSA reimbursements as long as the expense occurred after your HSA was established. Just keep detailed records of all receipts and documentation - the IRS doesn't require you to submit these with your taxes, but you'll need them if audited. One pro tip: if you can afford to leave some money in the HSA to grow, consider only reimbursing what you absolutely need now. HSAs can be great long-term investment vehicles since the money grows tax-free and withdrawals for qualified expenses are always tax-free, even decades later!

Great discussion everyone! I just wanted to add one more practical consideration for your situation. Since you're planning to rebalance between your IRA and taxable account, this might be a good time to think about tax-location strategy going forward. Generally, it's most tax-efficient to hold your most tax-inefficient investments (like REITs, bonds, or high-turnover funds) in tax-advantaged accounts like your IRA, while keeping tax-efficient investments (like broad market index funds or individual stocks you plan to hold long-term) in your taxable account where you can benefit from long-term capital gains rates. With 30-40 years until retirement, you've got plenty of time to recover from those tech losses. The silver lining is that this gives you a chance to restructure your portfolio with better tax efficiency in mind. And as others have confirmed, you don't need to worry about wash sale rules when moving from IRA losses to taxable purchases - just focus on building a solid long-term allocation that you can stick with through future market volatility.

One additional thing to consider as you're restructuring - since you mentioned you're 30-40 years from retirement, this might actually be a blessing in disguise. Those tech losses in your IRA, while painful now, don't have the same tax implications as losses in a taxable account would. I went through something similar in 2022 with my growth-heavy IRA getting crushed. What I learned is that IRA losses, while they hurt psychologically, are actually "cleaner" from a tax perspective since you're not missing out on tax-loss harvesting opportunities like you would in a taxable account. The fact that you're thinking about wash sale rules shows you're being thoughtful about this, but as others have confirmed, selling those losing positions in your IRA and buying different investments in your taxable account won't create any wash sale issues. Focus on building a more diversified allocation across your accounts rather than trying to recover those specific losses. With decades until retirement, time is really on your side here. Those ARKK losses might sting now, but they'll be a footnote in your investment journey if you stay disciplined with a solid long-term strategy.