That's interesting - I didn't know about the tax court cases. My CPA was very black and white about it not qualifying. Do you happen to know which cases addressed this? I'd love to look them up since my lease has some triple net features but I'm still quite involved in other aspects of property management.

@Luca Ferrari could you share which tax court cases you re'referring to? I m'in a similar situation with a lease that has some triple net features but I m'still actively managing the property in other ways. My understanding was that any triple net elements would disqualify the entire rental from QBI, but if there are cases suggesting otherwise based on overall activity level, that could be really helpful to know about.

This is really excellent advice about tracking all the different types of rental activities! I was definitely under-counting my hours by only focusing on the physical maintenance stuff. The time spent screening tenants, responding to late-night "emergency" calls that turn out to be non-emergencies, and researching everything from insurance policies to local rental regulations really does add up. Your point about property management software is spot on too. I've been using a simple app to track rent payments and maintenance requests, but I never thought about using the time-stamped communications in there as documentation for my contemporaneous records. That could be really helpful if the IRS ever questions my hour calculations. Do you know if time spent learning about landlord-tenant laws or attending local real estate investment meetups would count toward the 250-hour safe harbor requirement? I spend quite a bit of time educating myself to be a better property manager, but I'm not sure if that qualifies as "rental services" under the regulations.

Does your 401k provider let you choose how much to withhold? Mine only gave me the option for the standard 20% withholding and said I'd need to deal with the rest at tax time.

Yes, most 401k providers allow you to choose a higher withholding rate than the mandatory 20% federal withholding. My provider (Fidelity) allowed me to specify any percentage I wanted above 20%, but I foolishly stuck with the minimum. If your provider only allows 20%, you can mitigate the tax hit by making estimated quarterly tax payments to the IRS to cover the additional taxes and penalty. That way you won't face a huge bill (and possibly underpayment penalties) when you file your return. I learned this the hard way!

Do you still get charged that interest if you pay it off early? And does taking a loan affect your ability to make new contributions?

Good question! Most 401k loans allow early repayment without prepayment penalties, so you only pay interest for the time you actually have the loan outstanding. The interest rates are typically pretty reasonable too - usually prime rate plus 1-2%. As for contributions, taking a loan generally doesn't affect your ability to make new contributions to your 401k. However, some plans do have restrictions like limiting you to one outstanding loan at a time or requiring you to wait a certain period before taking another loan. You'll want to check with your specific plan administrator about their rules. One thing to watch out for - while you're repaying the loan, you're missing out on potential investment growth on that borrowed amount, since the money isn't invested in the market. But for a home purchase, the benefits often outweigh this opportunity cost.

Yes, that's correct. If you close all positions by year-end and don't repurchase the same or substantially identical securities within 30 days (including into January of the next year), then all your disallowed losses would be recognized in the current tax year. This is a common strategy for active traders - completely exit positions in securities where you've taken losses by year-end and stay out for at least 30 days. This ensures you don't push losses into the next tax year.

This is really reassuring to hear from someone who's been through it! I'm curious though - when you say "track your actual realized gains/losses carefully," what's the best way to do that? Are you talking about keeping a separate spreadsheet beyond what the broker provides, or is there a specific method you found worked well for distinguishing between gross trades and the actual tax impact after wash sales?

This is super important! And also remember that short-term losses offset short-term gains first, and long-term losses offset long-term gains first. Only after you've netted these within their own categories do you offset remaining gains with remaining losses from the other category. The worksheet can be confusing about this.

The VITA program suggestion is excellent! I wish I had known about this earlier. I've been struggling with tax document interpretation for years and didn't realize there were free resources available. Your spreadsheet idea is also brilliant - I'm definitely going to start doing this after I file my 2025 return. It's so frustrating to know that important information exists somewhere in your tax documents but not be able to find it when you need it months later. Having those key numbers written down in one place would save so much time and stress. Do you happen to know if VITA volunteers can help with questions about prior year returns, or do they mainly focus on current year filing assistance?

After deductions, my effective tax rate was around 12% last year on $28k of Doordash income. The key is tracking EVERY business expense - especially mileage. I drove about 15,000 miles for Doordash which was a massive deduction.

This is really helpful info about tracking miles between deliveries! I had no idea you could deduct those too. Quick question though - how do you prove to the IRS that you were "actively looking for orders" during those between-delivery miles? Like if you're driving from one area to another hotspot, do you need to screenshot the app or something to show you were available for deliveries? Also, the FAFSA thing is something I hadn't even thought about. Do you know roughly what income threshold starts affecting financial aid? I'm definitely going to talk to my financial aid office but curious if you have any ballpark numbers.

Great question about proving you were actively looking for orders! The key is maintaining good records. I keep a simple log that shows when I start/end my "dash" sessions in the app, and my mileage tracking app (I use Stride) automatically records all miles driven during those active periods. You don't necessarily need screenshots, but it helps to have a consistent pattern. For example, if your log shows you were online from 11am-2pm and drove 45 miles total with only 3 deliveries, it's reasonable that the other miles were spent positioning yourself in hotspots or driving between orders. As for FAFSA, there's no hard threshold - it uses a complex formula based on your Expected Family Contribution (EFC). But generally, if you're making more than around $6,970 as a dependent student, it starts reducing your Pell Grant eligibility. The tricky part with gig work is that it's self-employment income, which can be treated differently than regular wages. Definitely talk to your financial aid office early - they might have strategies to help minimize the impact, like timing when you file your taxes or how you report the income.