Don't forget to check if your daughter qualifies for the Child Tax Credit! There are special rules for children who are non-resident aliens. If she has an ITIN and meets the other tests, you might still qualify for the credit even if she lives abroad.

I went through this exact same situation a couple years ago! Here's what I learned that might help you: Since you're a resident alien and your wife can elect to be treated as one for tax purposes, you're on the right track with married filing jointly. For your daughter, even though she's a nonresident alien, you can still claim her as a dependent if she meets the qualifying child or qualifying relative tests. The key thing to know is that for qualifying children, they need to be US citizens, resident aliens, nationals, OR residents of Canada/Mexico. If your daughter doesn't fall into those categories, you might still qualify under the qualifying relative rules. You absolutely can get an ITIN for her using Form W-7. I'd recommend working with a Certifying Acceptance Agent if possible rather than mailing original documents - it's much safer and faster. One heads up though - while you can claim her as a dependent for the dependency exemption, she won't qualify for the Child Tax Credit since that requires US citizenship or resident alien status. But the dependency deduction itself can still provide significant tax savings. Make sure you have all her documentation ready (birth certificate, proof of relationship) and get any foreign documents certified and translated if needed. The whole process took about 10 weeks for us during non-peak season.

Quick tip - make sure you're tracking business use vs personal use percentages for that equipment! The IRS can be picky about this. If you use the equipment 80% for business and 20% for personal, you can only deduct 80% of the cost.

Great question! As someone who just went through this exact situation with my small consulting business, I can confirm what others have said about Schedule C being the way to go. One thing I'd add - keep detailed records of when you placed the equipment in service for your business. The IRS cares about the "placed in service" date, not just the purchase date. So if you bought equipment in November but didn't start using it for business until December, that December date is what matters. Also, since you're new to business expenses, consider keeping a simple spreadsheet or log of all business-related purchases throughout the year. It makes tax time so much easier when you have everything organized ahead of time. I learned this the hard way my first year when I was scrambling to find receipts in March! The Section 179 deduction is definitely your friend here - being able to write off that full $1,800 immediately rather than depreciating it over several years will give you a nice tax benefit this year when your business is still growing.

Slight tangent but might be useful - watch out for the "substantially equal periodic payments" rule getting confused with the rollover rule. My advisor messed this up for me. I thought I could take out regular payments from my IRA without penalty using the 72(t) SEPP program AND do a 60-day rollover in the same year. Turns out doing a rollover terminates your SEPP plan and triggers penalties on ALL previous distributions. Cost me thousands in surprise taxes. Just mentioning this because sometimes when people are looking at ways to access retirement funds early, these different rules get mixed up.

Great question about Roth IRA rollovers! I've been through something similar and learned the hard way about the complexity of these rules. One important detail I haven't seen fully addressed - when you withdraw from a Roth IRA, the IRS considers withdrawals to come from contributions first (FIFO - first in, first out). So if you've contributed $20,000 over the years and your account is worth $25,000, your first $20,000 withdrawn would be considered contributions and wouldn't face the 10% penalty regardless of the rollover. However, once you hit the earnings portion (that $5,000 in my example), those ARE subject to the 10% penalty if you're under 59½ - unless you complete a valid 60-day rollover or qualify for an exception. The tricky part with your dual withdrawal scenario is that even if both withdrawals combined stay within your contribution basis, you still can only do ONE rollover per 12-month period. So if something goes wrong and you can't complete the rollover for any reason, you'd want to make sure your total withdrawal amount doesn't exceed your contribution basis to avoid penalties on earnings. I'd strongly recommend getting documentation from your IRA custodian showing exactly how much you've contributed versus earned before making any withdrawals. This gives you a clear picture of your penalty-free withdrawal capacity.

One thing that might help ease your mind: the IRS has specific guidance on this exact situation in Publication 525. Since you paid $700 for shares with a par value of $70, and this was at company formation when fair market value was likely minimal, you've essentially paid above fair market value. This means there's no "bargain element" to report as income. The 83(b) election protects you from future taxation as your shares vest - without it, you'd owe ordinary income tax on each vesting tranche based on the company's value at that time. Since you made the election and paid fair market value upfront, you're in good shape. For your 2024 return, just keep your documentation organized: the 83(b) election filing proof, your $700 payment record, and the stock purchase agreement. Most tax software won't even prompt you for this information since there's no taxable event to report. The real benefit comes later when you sell - everything above your $700 basis will be capital gains instead of ordinary income.

Adding to the great advice already given - one practical tip that saved me headaches later: create a simple spreadsheet tracking all your equity-related transactions and dates. Include your initial $700 payment, the 83(b) filing date, vesting schedule milestones, and any future equity events. This becomes invaluable if you ever get audited or need to calculate basis for tax purposes down the road. I wish I had done this from day one instead of scrambling to reconstruct everything years later when we had our exit. Also, regarding your specific situation - since you paid above par value at formation, you're in the best possible position tax-wise. The 83(b) election combined with paying fair market value means you've essentially "pre-paid" any tax obligations on these shares. Future appreciation will be capital gains when you sell, which is exactly what you want as a founder.

I'm really sorry this happened to you - losing $5K on what you thought was a safe long-term investment is incredibly frustrating. As others have confirmed, unfortunately you can't deduct annuity surrender losses under current tax law due to the Tax Cuts and Jobs Act suspending miscellaneous itemized deductions through 2025. What might help is thinking of this as valuable (albeit expensive) financial education. At 22, you trusted what seemed like professional advice, but now you have the knowledge to make much better investment decisions going forward. Many people don't learn about the high fees and surrender charges in these products until they're much older with even larger losses. For the $23K you received back, consider putting it into low-cost index funds in a taxable account or maxing out tax-advantaged accounts like your 401k or IRA if you haven't already. These will give you much better transparency, lower fees, and the ability to use any future losses for tax purposes. Also, definitely keep all your paperwork from this surrender - the original contract, payment records, and surrender statements. While the loss isn't deductible now, tax laws can change, and having complete documentation could be valuable if deductibility rules are restored after 2025. You're not alone in this situation - the annuity industry has unfortunately caught many young investors in similar fee traps. The important thing is learning from it and making better choices going forward.

I'm really sorry to hear about your $5K loss - that's such a frustrating situation, especially after being disciplined about contributing for so many years. Unfortunately, the other commenters are correct that you can't deduct annuity surrender losses under current tax law. The Tax Cuts and Jobs Act suspended the miscellaneous itemized deductions that would have previously allowed this type of loss (subject to the 2% AGI floor) through 2025. While this doesn't help with your immediate tax situation, I'd recommend using this experience as motivation to review your overall investment strategy. That $23K you received back could work much harder for you in low-cost index funds or by maxing out your 401(k)/IRA contributions. At least with traditional investments, any future losses could potentially be used for tax-loss harvesting. Also, definitely keep all your surrender paperwork - the contract, payment records, and surrender statement. Tax laws do change, and if miscellaneous itemized deductions are restored after 2025, having complete documentation could be valuable. I know it's little consolation right now, but learning about investment fees and surrender charges at your age, while painful, is actually better than many people who don't discover these costly structures until they're closer to retirement with much larger amounts at stake. Consider it expensive but valuable financial education that will serve you well going forward.