Serious question - what happens if your friend just ignores the W-2G? Like the casino sent the form to the IRS, but if he has no other income and has been a non-filer for years, would the IRS really come after him for a small jackpot? Just wondering if it's even worth the hassle.

I went through something similar a few years ago. Had a decent casino win with a W-2G but was basically broke otherwise. The key thing to understand is that even though your friend has been a non-filer, that W-2G creates a filing requirement regardless of his other income. However, the good news is exactly what Sophia pointed out - if that $1600 is his only income for the year, it's well below the standard deduction threshold. He'll need to file a return to report it, but he won't actually owe any federal income tax. The IRS just needs to see that return to match against their records. I'd definitely recommend he files rather than ignoring it. The IRS matching system is pretty good at catching unreported gambling income, and it's much easier to file a simple return now than deal with notices and penalties later. Most free tax software can handle a basic return with just a W-2G.

One more thing to consider - the deadline for filing 1099s with the IRS is January 31, which is earlier than it used to be years ago. If this is your first time filing, don't get caught by surprise! Also, make sure you're collecting W-9 forms from vendors BEFORE you pay them, not scrambling to get them in January. I learned this the hard way when several of my vendors were impossible to reach when I needed their tax info.

This is such a common confusion for new S Corp owners! Your accountant is absolutely right about the 1099 requirement. I went through the exact same thing my first year and was shocked to learn about all the paperwork involved. One tip that really helped me: create a vendor tracking spreadsheet at the beginning of each tax year. Include columns for vendor name, business structure (sole prop, LLC, corp), total payments, and whether a W-9 is needed. Update it quarterly so you're not scrambling in January. Also, don't forget that the penalties for not filing required 1099s can be pretty steep - up to $280 per form if you're really late. The IRS has been cracking down on this more in recent years, so it's definitely worth getting compliant even if other people in your industry aren't doing it properly. Your colleague who says she's never had to issue them is probably either working with mostly incorporated vendors (who don't need 1099s) or simply not complying with the requirement. Better to be safe and follow your accountant's advice!

Great point about the home office deduction! This is something many people overlook. If you've claimed depreciation on any part of your home for business use, you'll need to "recapture" that depreciation when you sell - meaning you'll pay taxes on the amount you previously deducted, even if the rest of your gain qualifies for the exclusion. The recapture is taxed at a maximum rate of 25%, which can be a nasty surprise if you're not expecting it. Keep records of any home office deductions you've claimed over the years so you can calculate this correctly. Also worth noting - if you converted part of your home to rental property at any point (like renting out a basement apartment), similar rules apply. The IRS gets pretty strict about mixed-use properties when it comes to the primary residence exclusion.

Just wanted to add another perspective on documentation - I work as a tax preparer and see this situation frequently. Beyond organizing your receipts, consider creating a timeline document that shows the progression of improvements over the years. This helps if the IRS questions whether certain expenses were truly capital improvements versus repairs. For example, if you replaced a roof in 2010, that's clearly a capital improvement. But if you then had roof repairs in 2015, those would be maintenance expenses, not additional capital improvements. A chronological summary helps differentiate between the two and shows the logical progression of your home's improvements. Also, don't forget about permits! Many major improvements required building permits, and these are usually available from your local building department. Permit records can serve as excellent backup documentation, especially for older improvements where you might have lost receipts. They show the scope of work, dates, and often the estimated value of the improvement. One more tip: if you had any insurance claims for improvements (like upgrading electrical after a small fire), those insurance documents can also help establish the value and timing of capital improvements.

Just my two cents, but from experience - document EVERYTHING. Save your hotel receipts, take pictures of your work setup in the hotel, keep a log of hours worked, save emails sent from the hotel, etc. I had a similar deduction questioned once and having thorough documentation saved me.

This is a really interesting situation that I think more people deal with than they realize! I've been in a similar spot where my home office became unusable due to circumstances beyond my control (in my case, it was construction noise from next door that made client calls impossible). The consensus here is solid - you can likely deduct this as a legitimate business expense since your regular workspace is temporarily unavailable. What I'd add is to consider the "reasonable" test the IRS applies. A basic hotel room for a couple nights to maintain business operations? That sounds reasonable. A luxury suite at the Four Seasons? That might raise eyebrows. Also, keep track of your normal home office expenses during this period. You're not "double dipping" - you're replacing one workspace with another temporarily. Just make sure your documentation clearly shows this was a business necessity, not a personal preference to get away from the family (even though we all understand the need for quiet work time!). One last tip - if you have any client meetings or important calls scheduled during this time, document those as well. It shows the hotel expense was directly tied to maintaining your business operations.

Given your income level ($310k) and the fact that you're in Texas (no state income tax), you're likely in the 24% federal tax bracket. This means even if you can deduct the HELOC interest, you're only saving 24 cents for every dollar of interest paid - so you're still effectively paying about 8.4% on that $42k even with the deduction. The key question is whether your total itemized deductions (mortgage interest + property taxes + HELOC interest + charitable contributions) exceed the standard deduction of $27,700 for 2024. With a $380k mortgage at 2.8%, you're probably paying around $10,600 in mortgage interest annually. Add Texas property taxes (which can be substantial), and you might already be close to the itemization threshold without the HELOC interest. My recommendation: Use part of your $65k savings to pay down the HELOC to maybe $15k-20k, keeping $40k+ as your emergency fund. This reduces your interest burden while maintaining financial security. The 11% variable rate could easily go higher, making this debt even more costly. You can always use the HELOC again if needed for true emergencies. Also consider Evelyn's suggestion about refinancing into a fixed home equity loan - rates around 7-8% would be much better than your current variable 11%.

One thing I'd add to the excellent analysis already provided is to consider the timing of your debt payoff strategy. Since you mentioned the Wells Fargo card's 0% rate expires in March 2025, you have a clear deadline there. I'd suggest prioritizing that $24k Wells Fargo balance first - either pay it from savings before March or transfer it to the HELOC if you can't cover it from cash flow. Don't let that promotional rate expire and suddenly be paying high interest on credit card debt. For the Chase card with 0% until 2027, you have more time to strategize. The real question is the $42k HELOC at 11% variable rate. Given your income and likely property taxes in Texas, you'll probably benefit from itemizing and can deduct that HELOC interest. But as others noted, you're still effectively paying ~8.4% after the tax benefit. My suggested priority: 1) Pay off Wells Fargo before March 2025, 2) Keep 6 months expenses (~$40k?) in emergency savings, 3) Use remaining savings to pay down HELOC principal, 4) Consider refinancing remaining HELOC balance to a fixed-rate home equity loan if you can get 7-8%. This approach gives you the tax benefits while minimizing your interest costs and maintaining financial security.