ur gonna need to setup state tax withholding with ur employer asap if u havent already

Also worth noting that Arkansas allows you to deduct your federal income tax paid from your state taxable income, which can help reduce what you owe. It's one of the few states that does this! Make sure your tax preparer knows about this deduction or look for it if you're filing yourself.

I understand your frustration completely. The disconnect between family court orders and actual IRS rules creates these impossible situations for parents. Based on what you've described, you likely had your son for significantly more than 183 nights this year (the IRS threshold for custodial parent status), especially with that 4-month absence. Under IRS rules, the custodial parent has the primary right to claim the child as a dependent. However, you're caught between two systems: the IRS rules that would likely support your claim, and a court order that could hold you in contempt if violated. My suggestion would be to document everything - every night each child stayed with you versus your ex, all expenses you covered during the absence period, any communication about the missed parenting time. Then consider going back to court specifically requesting a one-year modification to the tax arrangement based on the actual custody time this year, not a permanent change to the parenting plan. You might also want to speak directly with an IRS agent about your specific situation. They can clarify whether your actual custody time this year would qualify you as the custodial parent under their rules, which could strengthen your position if you need to return to family court.

This is such a complex situation, and I really feel for you being caught between two different sets of rules. As others have mentioned, the IRS and family courts operate independently, which creates these frustrating scenarios. One thing that might help is understanding that the IRS has specific criteria for determining who can claim a child, and actual custody time is a major factor. If you had your son for those 4 months plus your regular 50% time, you likely exceeded the 183-night threshold that makes you the "custodial parent" under IRS rules. However, violating a court order - even one that seems unfair given the circumstances - can lead to contempt charges. That said, courts can also modify orders when there are substantial changes in circumstances, and a 4-month abandonment certainly qualifies. Have you considered requesting a one-time modification just for this tax year? You could present it as asking for relief based on the actual parenting time rather than trying to change the permanent arrangement. Sometimes judges are more willing to make temporary adjustments than permanent ones. Also, keep meticulous records of everything - custody exchanges, expenses you covered, any missed visits. This documentation will be crucial whether you go back to court or if there are any IRS questions later. The more evidence you have of the actual situation, the stronger your position becomes.

Just to clarify something that seems to be causing confusion in this thread - there's an important distinction between truly collectible/investment vehicles and regular cars that happen to be a bit special. For a regular car (even if it's a nice classic that you drive on weekends), you generally CANNOT deduct the loss. These are personal-use assets. For cars held EXCLUSIVELY as collectible investments, you potentially CAN deduct losses, but you need extensive documentation showing investment intent. For cars used in a BUSINESS (like a restoration business, car dealer, etc.), losses are generally deductible as business expenses. Most people fall into the first category and can't deduct losses, which is why the general advice is that car losses aren't deductible. Most folks simply can't meet the strict requirements for the exceptions.

This is such a frustrating aspect of the tax code that catches so many people off guard! I went through something similar with a vintage truck I had to sell at a loss during COVID when I needed cash fast. What really helped me understand the situation was learning about the "personal use presumption" - basically, the IRS assumes that unless you can prove otherwise with solid documentation, any vehicle you own is for personal use and enjoyment. Even if you barely drive it, even if it's rare or collectible, the default assumption is personal use. The harsh reality is that the tax code is designed this way intentionally. Personal assets like cars, boats, jewelry, etc. are expected to depreciate as part of their normal use cycle. The IRS views this depreciation as the "cost" of enjoying these items, similar to how you can't deduct the loss when your furniture gets old or your clothes wear out. What I learned from my tax advisor is that if you're serious about treating vehicles as investments going forward, you need to set up that framework BEFORE you buy, not after. This means business entities, proper documentation, storage agreements, maintenance logs, and most importantly - never using them personally. It's a pretty high bar to meet, but it is possible if you're committed to treating it as a true investment rather than a hobby that might make money.

Minnesota state income tax rates range from 5.35% to 9.85% depending on your income level, so you'll definitely want to factor that in! Since you're just starting out, I'd recommend setting aside around 35-40% of your profit to cover both federal and state taxes - better to have a little extra cushion than come up short. Also, Minnesota requires quarterly estimated tax payments if you expect to owe more than $500 in state taxes, so keep that in mind as your LLC grows. The Minnesota Department of Revenue website has a decent estimated tax calculator that can help you figure out roughly what you'll owe based on your projected annual profit. One more thing - make sure you're aware of Minnesota's self-employment tax situation. The state doesn't have its own self-employment tax (that's just federal), but they do have their own rules about what business expenses are deductible that might differ slightly from federal rules.

Great question! I went through this exact confusion when I started my handyman business. You're absolutely right to calculate based on profit, not gross revenue. In your case, with $9,800 revenue minus $6,350 in legitimate business expenses, you'd only need to set aside taxes on the $3,450 profit. One thing that really helped me was creating a simple spreadsheet to track everything in real-time. I have columns for revenue, materials, equipment rental, mileage, and other expenses. This way I can see my actual profit margin throughout the year and adjust my tax savings accordingly. Also, don't forget to track your business use of personal items - like if you use your personal truck for jobs, you can deduct the business mileage. And definitely keep digital copies of all receipts! I learned that lesson when I lost a box of receipts and couldn't claim about $800 in legitimate expenses. The 30% rule is a good starting point for profit, but as others mentioned, factor in your state taxes too. I'd rather set aside a bit extra and get a refund than scramble to find money I don't have come tax time.

I'm really glad you asked this question because I went through the exact same thing about 4 months ago! Got a Treasury check completely out of nowhere for about $450 and immediately thought it had to be some kind of scam since I wasn't expecting any refund. After reading through all these helpful responses, it's clear that what you're experiencing is completely normal. The IRS runs continuous automated reviews of tax returns and frequently finds errors that work in taxpayers' favor. In my case, it turned out they had corrected a mistake I made calculating my Retirement Savings Contributions Credit on my 2022 return. The key things that convinced me it was legitimate were exactly what you described - proper security features, correct personal information, and it being issued by the US Treasury. The paper check format instead of direct deposit is standard for these types of adjustment refunds, even if you normally receive electronic deposits. I ended up depositing mine after verifying all the security features, and sure enough, I received a CP11 notice about 12 days later explaining exactly what had been adjusted and why. The whole process was completely legitimate and straightforward. My advice would be to go ahead and deposit it, but definitely keep copies of everything for your records. That explanation notice will arrive soon and will clear up any questions about where the refund came from. Based on everything you've described, this sounds like a routine IRS adjustment that happens thousands of times every month!

I completely understand your concern - getting an unexpected check from the Treasury can definitely be nerve-wracking! Based on everything you've described (proper security features, correct personal information, issued by US Treasury), this sounds like a completely legitimate IRS adjustment refund. These are actually much more common than most people realize. The IRS continuously reviews past returns and issues adjustment refunds when they find errors in taxpayers' favor. Common reasons include: - Math errors they corrected in your favor - Tax credits you were eligible for but didn't fully claim (EITC, Child Tax Credit, education credits, etc.) - Excess withholding corrections (especially if you had multiple employers) - Interest on delayed refunds from previous years The fact that it came as a paper check instead of direct deposit is completely normal for adjustment refunds - they're processed through different IRS systems than your original return. My recommendation would be to deposit the check since all the security features check out. You should receive a CP11, CP12, or similar notice within the next 2-3 weeks explaining exactly what was adjusted and why. This explanation notice will give you complete details about which tax year was corrected and how they calculated the adjustment amount. Keep copies of everything for your records, but don't worry - this sounds like a routine adjustment that the IRS processes thousands of times every month!