Make sure your home office truly qualifies before taking any deduction! The space must be used EXCLUSIVELY for business - meaning no personal use whatsoever. If you sometimes use that second bedroom for guests, storage of personal items, or anything non-business related, you could lose the entire deduction if audited. I learned this the hard way - had a dedicated office but kept a futon in there for occasional guests. Auditor disallowed my entire home office deduction because it wasn't 100% exclusive business use. Document your setup with photos showing it's clearly a workspace only.

I'm in a similar situation with a shared apartment but hadn't thought about the exclusive use requirement that Sofia mentioned. Since you mentioned the second bedroom is "exclusively used" for your business, make sure you can truly prove that if audited. One thing I'd add to the great advice already given - keep detailed records of everything. Take photos of your office setup, save all rent receipts, and document that 13% square footage calculation with measurements and a floor plan sketch. The IRS loves documentation, especially for home office deductions. Also, double-check your state tax rules too. Some states have different requirements or don't allow the federal home office deduction, so you might need to calculate things differently for state vs federal returns. For your van parking expense, definitely keep that separate on Schedule C as others suggested. That $125/month adds up to $1,500 annually, which is a solid business deduction you don't want to dilute by mixing it into your home office calculation.

This is great information everyone is sharing! I'm also a service-based business owner (handyman services) and was completely unaware I could deduct mileage. I've been driving to client locations for two years now and never claimed any of these miles because I thought it was just "commuting." I do have a dedicated office space in my basement where I handle all my scheduling, invoicing, and business planning. It sounds like I need to start tracking my mileage immediately and possibly look into amending previous tax returns? One question though - do I need to track mileage for every single trip, or can I estimate based on regular routes to frequent clients? Some of my clients are repeat customers where I go to the same address multiple times per month.

Great thread with lots of helpful information! I'm also self-employed (freelance marketing consultant) and this discussion has been really eye-opening. I've been missing out on mileage deductions for client meetings because I thought since I work from home, any driving was just "personal" travel. One thing I want to add that I learned from my accountant last year - if you're using the standard mileage rate, make sure you're using the correct rate for the tax year. The rates change annually. For 2024, it's 67 cents per mile for business use (up from 65.5 cents in 2023). Also, don't forget that you can deduct mileage for business-related trips beyond just client visits. This includes driving to the bank for business deposits, to the office supply store for business purchases, to networking events, etc. As long as the trip has a legitimate business purpose and you're traveling from your home office (principal place of business), it should qualify. The key is really having that qualifying home office and keeping meticulous records. I use a simple spreadsheet with columns for date, starting location, destination, business purpose, and miles. Takes 30 seconds to log each trip but can save hundreds or thousands at tax time.

No one has mentioned tax credits! The formula isn't just "tax liability minus taxes paid." Tax credits come into play too and could explain the discrepancy. Tax due = Tax liability - (Taxes paid + Tax credits

I had a very similar issue last year and it drove me crazy for weeks! The $529 difference you're seeing could be from several sources that aren't immediately obvious: 1. **Additional Medicare Tax** - If your income exceeded certain thresholds ($200k single/$250k married), there's an extra 0.9% Medicare tax that gets added to your total tax liability. 2. **Net Investment Income Tax** - If you have investment income and your modified AGI exceeds the thresholds, there's a 3.8% tax on investment income that gets tacked on. 3. **Premium Tax Credit Reconciliation** - If you received advance premium tax credits for health insurance through the marketplace, you might owe some back if your actual income was higher than estimated. 4. **Prior Year Balance** - Sometimes there's an outstanding balance from a previous tax year that gets rolled into your current year's amount due. The best thing to do is go through your tax form line by line and look for any additional taxes or adjustments that might not be part of your basic income tax calculation. These "extra" taxes can really throw off the simple liability-minus-payments formula that most people expect to work. Check lines 16-23 on Form 1040 - that's where most of these additional taxes show up. One of those lines probably has that missing $529!

Sorry to jump in with a slightly different perspective, but isn't renting a different car each week extremely inefficient tax-wise? The standard mileage rate for 2024 is around 67 cents per mile, which accounts for ALL vehicle costs including depreciation. If you're paying $15,600 annually for rentals, you'd need to be driving nearly 23,300 business miles annually to make that worthwhile compared to just using your own vehicle and taking the standard deduction. Have you calculated if this approach actually makes financial sense?

You might also want to consider whether your photography business would benefit from a dedicated business vehicle instead of weekly rentals. As a fellow creative professional, I understand wanting to protect your personal car from wear and tear, but there could be more tax-efficient approaches. For example, you could lease a vehicle exclusively for business use and deduct 100% of the lease payments, or purchase a used vehicle and depreciate it over time. This would eliminate the need to track personal vs. business use percentages entirely. That said, if the rental approach works best for your workflow (maybe you need different vehicle sizes for different shoots?), just make sure you're documenting everything meticulously. The IRS can be particularly scrutinous of Schedule C vehicle deductions, so having ironclad records is crucial. Consider setting up a simple system where you log business purpose, mileage, and take photos of receipts immediately after each rental period. Also, don't forget about other deductible expenses related to your vehicle use - things like GPS apps, car phone mounts, or other equipment you need for business travel can also be deducted as business expenses.

Have you guys considered splitting the benefits? Like one of you claims the child tax credit and the other claims the EIC if eligible? My ex and I alternate years claiming our kid which works for us.

This is such a common situation for unmarried couples with kids! From what you've described, it sounds like your boyfriend would likely be the better choice to claim your child since he has the higher income and provides the financial support. The IRS tiebreaker rules for unmarried parents living together typically favor the parent with higher AGI. However, don't overlook the Earned Income Credit (EIC) - even with your lower income of $27k, you might still be eligible for EIC if you claim your child, and sometimes that can be more valuable than the Child Tax Credit your boyfriend would get. The EIC is specifically designed to help lower-income working families and phases out at higher incomes. My suggestion would be to use tax software or consult a professional to run both scenarios - him claiming vs you claiming - and see which gives your household the better overall refund. Sometimes the math isn't as obvious as it first appears, especially when factoring in all the different credits and filing statuses available to each of you. Also keep in mind that whichever one of you doesn't claim the child will need to file as Single rather than Head of Household, so factor that into your calculations too. Good luck navigating your first tax season as parents!