I see a lot of great math advice here but nobody's mentioned WHERE to actually set up your Solo 401k. After a ton of research, I went with Fidelity for mine because they don't charge any setup or maintenance fees and their investment options are solid. Vanguard is another good option. Avoid the ones that charge annual fees if possible - those fees eat into your returns over time!

Just wanted to chime in as someone who went through this exact confusion last year! Your math looks right - the ~20% calculation after SE tax adjustment is correct for the employer contribution portion. But like others mentioned, you're missing the huge opportunity of the employee contribution side. What really helped me understand it was thinking of it this way: as a sole proprietor, you're literally both the boss AND the worker. The "boss" you can contribute about 20% of net profit (employer contribution), and the "worker" you can defer up to $22,500 of your earnings (employee contribution) - even without a formal payroll setup. So with your $13,500 profit, you could potentially contribute your calculated $1,675 PLUS up to $13,500 more as an employee deferral (limited by your total net income). That's a massive difference in retirement savings potential! Just make sure you establish the plan by Dec 31st if you want to contribute for this tax year.

I think I know exactly what's happening here. You're probably looking at the instructions for Form 8582 (Passive Activity Loss Limitations) where it might direct certain losses to other areas of the return depending on your specific situation. But even with passive activity or at-risk considerations, business losses would never be reported as dividends. Here's the correct flow for Schedule C losses: 1. Net loss flows from Schedule C to Schedule 1, Line 3 2. Then from Schedule 1 to Form 1040, Line 8 3. If you have at-risk limitations, you'd use Form 6198 first 4. If you have passive activity limitations, you'd use Form 8582 first For Schedule SE - the $434 threshold is the minimum self-employment income required to owe SE tax. Below that = no Schedule SE needed.

Is anyone using tax software for their Schedule C? I've been using TurboTax and it automatically puts everything on the right lines - it wouldn't let me put business losses on the dividend line even if I tried. Might be worth the investment to avoid these kinds of headaches.

6 Is anyone using TurboTax instead of H&R Block? I'm having the exact same issue with negative foreign tax values in TurboTax and wondering if there's a similar fix.

I've been dealing with international dividend taxation for several years now, and I wanted to add some clarification that might help others avoid confusion. The foreign tax credit is definitely worth claiming - it's essentially getting back taxes you've already paid to another country. The $300 threshold for the simplified method ($600 if married filing jointly) is per tax year, so if you're consistently investing in international stocks, you'll want to track this annually. One thing I learned the hard way: keep good records of your foreign tax credits. If you can't use the full credit in one year because your US tax liability is lower than the foreign taxes paid, you can carry the unused portion forward for up to 10 years. But you'll need Form 1116 for carryovers, even if the original amount was small enough for the simplified method. Also, make sure the foreign taxes you're claiming actually qualify - they need to be income taxes, not other types of foreign taxes or fees. The 1099-DIV should clearly show "Foreign Tax Paid" in Box 7 if it qualifies for the credit.

Anyone know if box spreads on SPX options still qualify for section 1256 treatment? I've been using them for pseudo-financing and I'm not sure if I should be checking any of these elections for tax purposes.

I've been dealing with Form 6781 for my options trading for the past few years, and I totally feel your pain about the desktop vs. online TurboTax issue. The desktop version definitely requires more manual work for section 1256 contracts. A few quick tips that might help: 1. Double-check that your SPX and VIX options are actually being treated as section 1256 contracts in the desktop version. Sometimes the import doesn't categorize them correctly and they end up on Form 8949 instead of Form 6781. 2. For the "Net section 1256 contracts loss election" - only select this if you had significant section 1256 gains in the previous 3 years that you want to offset. If you didn't have prior gains, this election won't benefit you and your losses will just carry forward normally. 3. The account description can be pretty straightforward. I usually put something like "Options Trading Account - [Broker Name]" and have never had issues with the IRS. 4. If you're really stuck, consider reaching out to a tax professional who specializes in trading taxes. The cost might be worth it for the peace of mind, especially if you're dealing with complex positions or significant amounts. The learning curve is definitely steep when switching from the online version, but once you get the hang of it, the desktop version does give you more control over how everything is categorized.

Does anyone know if selling the property would let me use those accumulated losses? I've been carrying forward losses for like 3 years now and wondering if I should just sell.

Great thread! Just wanted to add that if you're a real estate professional (which has very specific IRS requirements), your rental activities might not be considered passive at all. You need to spend more than 750 hours annually in real estate trades or businesses AND more than half your personal services must be in real estate activities. If you qualify as a real estate professional, your rental losses can offset other types of income without the passive activity limitations. It's a high bar to meet, but worth investigating if you're heavily involved in real estate. Most casual landlords won't qualify, but thought it was worth mentioning since it's another exception to the passive loss rules.