This is such a smart approach to think about optimizing your deductions as a household! You're absolutely right that sometimes it makes more financial sense for one person to claim the full deduction rather than splitting 50/50. Just to add to what others have said - make sure you also consider the state tax implications if you're in a state with income tax. Some states have different rules or limits for mortgage interest deductions that might affect your optimization strategy. Also, since you mentioned you're both on the title, you might want to document your agreement about how you're handling the tax deductions. It's not required, but having a simple written agreement between you two about who claims what can be helpful if questions ever come up later. This is especially useful if you decide to change your approach in future years. The key thing the IRS cares about is that the person claiming the deduction actually paid that portion of the expense, so as long as you set up your payment structure to match your deduction claims, you should be in good shape!

Great question about changing strategies year to year! It's completely normal and acceptable to adjust your deduction approach annually based on your circumstances - the IRS doesn't expect you to stick with the same split forever. What matters is that each year's approach accurately reflects who actually paid what expenses that year. Regarding state-specific rules, most states follow federal guidelines for mortgage interest deductions, but there are some exceptions to watch out for. For example, some states have lower caps on mortgage interest deductions than federal limits, and a few states don't allow mortgage interest deductions at all (like states with no income tax). States like California generally follow federal rules but have their own forms and sometimes different AGI thresholds that could affect whether itemizing makes sense. New York has some unique rules around property tax deductions that might impact your optimization strategy. I'd recommend checking your specific state's tax guidelines or consulting with a local tax professional who knows your state's quirks. The strategy that works best federally might not always be optimal when you factor in state taxes, especially if you're in a high-tax state with different deduction limits or phaseout rules.

Friendly reminder to everyone that the IRS is SEVERELY understaffed and underfunded! They're still dealing with backlogs from the pandemic and system limitations. The people answering phones are doing their best with limited resources. My sister works for the IRS and says amended returns are processed in the order received, but there are exceptions where returns get flagged for various reasons that require manual review. Sometimes these get stuck in queues waiting for available staff. Yes it's frustrating but the frontline employees aren't the ones creating these delays! They literally can't process returns any faster than the antiquated systems and staffing levels allow.

I completely understand your frustration - 9 months is definitely excessive for an amended return, especially when your 2020 amendment was processed quickly. Based on what others have shared here, it sounds like there might be a specific issue holding up your 2021 return that the phone reps aren't identifying. I'd strongly recommend trying multiple approaches simultaneously: 1. Request your account transcript online through the IRS website - this often shows processing codes and flags that phone reps don't mention 2. Contact the Taxpayer Advocate Service at 877-777-4778 - they're specifically designed to help with situations like yours where normal channels aren't working 3. Reach out to your Congressional representative's office - many have constituent services that can inquire directly with the IRS on your behalf The fact that you mentioned unemployment income and a change from HOH to married filing status might be relevant - sometimes these changes trigger additional reviews that can cause delays. When you call next, specifically ask if there are any "freeze codes" or "hold codes" on your account and request to speak with someone who can actually review your file rather than just check the general status. Don't give up - 9 months with no clear explanation is not acceptable, and you have legitimate options to escalate this beyond the standard phone support.

Slightly different perspective here - have you considered just separating out the sales tax on your invoices/receipts instead of absorbing it? There are a few benefits: 1. Customers actually expect to see sales tax added separately 2. It's WAY easier for accounting/bookkeeping 3. You don't cut into your profit margins 4. Avoids all this tax deduction confusion When I switched from inclusive to exclusive pricing, my sales didn't drop at all - turns out customers are used to seeing the tax added at checkout. Just something to consider as a simpler solution to your problem.

I've been dealing with this exact same issue in my small business! After reading through all these responses, I'm convinced that backing out the sales tax from gross receipts is definitely the right approach rather than trying to deduct it as an expense. One thing I'd add is to make sure you're also considering multi-state sales tax rules if you sell online. I got caught off guard when I started selling to customers in other states and didn't realize I had economic nexus obligations in some of them. Each state has different thresholds for when you need to start collecting and remitting sales tax. Also, if you're doing craft shows or farmer's markets across state lines, you might need temporary sales tax permits in those states. I learned this the hard way when a show organizer informed me I needed to collect local sales tax for that jurisdiction. The good news is once you get your system set up correctly to separate the tax component from your actual sales revenue, quarterly filings become much more straightforward. I use a simple spreadsheet that automatically calculates the breakdown, and it's saved me so much headache compared to when I was trying to figure out deductions.

Has anybody used QuickBooks Self-Employed for tracking business vs personal expenses? I'm a sole proprietor too and get confused about what counts as business vs personal. Last year I just guessed and probably left money on the table.

Just wanted to chime in as someone who went through this exact decision process last year with my consulting business. The key thing that helped me decide was getting clear on my actual numbers and goals. As others mentioned, you're right at that threshold where an S-corp election might make sense financially. But beyond just the tax savings, consider the administrative overhead - you'll need to run payroll (even for yourself), file additional returns, and maintain more formal records. One thing I didn't see mentioned is that you can actually elect S-corp status for an LLC, which gives you the tax benefits without some of the corporate formalities. This might be a middle ground worth exploring. For your furniture business specifically, also consider liability protection. As a sole prop, your personal assets are at risk if something goes wrong with your products. An LLC (even without S-corp election) would give you that protection layer. My recommendation would be to run the actual numbers for your situation - either with a tax pro or using one of the tools mentioned here - before making any changes. The "right" answer really depends on your specific income level, expenses, and business goals.

I feel your frustration! I'm in a similar boat with Fidelity - my consolidated 1099 got pushed back to March 5th even though my portfolio is pretty straightforward. What's annoying is that they can't give you a specific reason beyond the generic "waiting for final tax information" message. From what I've learned dealing with this, the February 15th deadline is more of a guideline than a hard rule. Brokerages can file for extensions with the IRS, especially when they're waiting on corrected information from fund companies or dealing with complex corporate actions. The silver lining is that once you do get your form, it should be more accurate than if they rushed it out. I've had friends who got their 1099s "on time" only to receive multiple corrections later, which is arguably worse than waiting a bit longer for the right information the first time. If you're expecting a refund and want to get the process started, you might consider using your December statement to estimate your tax situation while you wait for the official form. Just be prepared to file an amendment if there are significant differences.

This delay issue isn't unique to Fidelity unfortunately. I've seen similar complaints across multiple brokerages this year - Schwab, E*Trade, and even Vanguard have had more delays than usual. From what I understand, there's been a broader industry trend toward being more cautious with 1099 accuracy after some high-profile issues in recent years where investors received multiple corrected forms. The SEC has been pushing for better data quality, which ironically means more delays as brokerages wait longer for final information from fund companies and transfer agents. The ETF industry has also grown significantly, and many of these funds are still figuring out their year-end distribution classifications. Even "simple" broad market ETFs can have complex underlying holdings that require additional time to properly categorize for tax purposes. I know it's frustrating when you're trying to plan your taxes, but the silver lining is that when you do receive your form, it's much more likely to be accurate the first time. Having dealt with amended 1099s in the past, I'd rather wait a few extra weeks than deal with the headache of filing corrections later.