Don't forget about state tax implications! While the federal deduction for unreimbursed employee expenses is gone, some states still allow it. For example, I live in California and can still deduct legitimate home office expenses on my state return even if they're not deductible federally. This at least reduces the tax burden somewhat. Other states with similar provisions include New York, Pennsylvania, and Minnesota. If you live in one of these states, definitely keep those receipts and track your expenses carefully. You'll need to file a separate schedule with your state return to claim these deductions.

This is such a common confusion with WFH stipends! Based on what you've described, it sounds like your employer is treating this as taxable income since HR mentioned it will be on your W-2. Here's what you need to know: If the $200/month appears on your W-2 as wages, you'll owe taxes on the full $2,400 annually regardless of how much you actually spend. The key distinction is whether your company has set up what's called an "accountable plan" - this requires you to submit receipts and documentation for reimbursement. Without that requirement, the IRS treats it as additional compensation. Unfortunately, since 2017, employees can no longer deduct unreimbursed work expenses on federal returns. However, I'd still recommend keeping those receipts for two reasons: 1) Some states still allow these deductions, and 2) You might be able to use this documentation to convince your employer to switch to a proper accountable plan structure. You might want to approach HR about restructuring this as a true expense reimbursement program where you submit receipts quarterly. This would make the payments non-taxable for everyone involved. Many companies are open to this change once they understand the tax benefits for both parties.

For those confused about the difference between expensing and Section 179: In 2025, you can "expense" (immediately deduct) items that cost less than $2,500 per item under the de minimis safe harbor election. You make this election on your tax return. Since your computer is $2,700, it's over this threshold, which is why Section 179 or depreciation come into play. The monitor at $2,000 could potentially qualify for immediate expensing under the safe harbor if purchased separately. Has anyone used TurboTax Business to handle Section 179 for an S corp? Wondering if it walks you through this properly.

One thing to keep in mind - if you're using the computer and monitor partially for personal use, you can only deduct the business percentage. The IRS is pretty strict about this, especially for home-based S-corps. I'd recommend keeping a log of business vs personal usage for at least the first few months to establish a pattern. If it's 80% business use, you can only claim 80% of the cost under Section 179. Also, since you mentioned it's just you and your wife, make sure the equipment is titled to the S-corp and not purchased personally. The business needs to own the assets to claim the deduction. If you bought them personally and are reimbursing yourselves, that's a different scenario that might need to be handled as a sale to the corporation.

Don't forget that if you get the subscription software like the ERP system you mentioned, that's considered a regular business expense and gets deducted each year as you pay for it. Only the permanent software license needs the Section 179 vs. Schedule C decision. Also, if you're using a tax preparation software like TurboTax or H&R Block, they'll walk you through both options and usually recommend the simplest approach automatically. That's what I do for my pet portrait business and it's worked fine for years.

One thing I'd add is to make sure you keep the software license agreement or terms of service documentation along with your receipt. The IRS likes to see that you actually own or have the right to use the software for business purposes, especially for expensive programs like Wilcom. Also, since you mentioned you have current client projects, I'd suggest documenting a few examples of how you use the software for actual business work - maybe save some digitized designs with client names and dates. This creates a clear business purpose trail that's helpful if you ever need to justify the deduction. For timing, as long as you purchase and start using the software before December 31st, you can claim it for the current tax year regardless of which method you choose. The "placed in service" date is what matters, not when you paid for it.

Anybody know if there's a limit to how much you can deduct for church donations? I heard somewhere it was capped at like 60% of your income or something?

I've been following this thread and wanted to add some practical advice about the withholding issue that several people mentioned. If you're consistently owing taxes each year, the church donation question might be secondary to fixing your W-4. The IRS updated the W-4 form a few years ago, and many people are still using outdated allowance calculations. If you're married, have multiple jobs, or your spouse works, the new form has a more complex calculation that actually works better for determining proper withholding. You can use the IRS withholding calculator on their website (irs.gov) to figure out exactly how much should be withheld from each paycheck. This usually solves the "owing every year" problem more effectively than trying to find enough deductions to itemize. Church donations are great for supporting your community, but as others have said, they likely won't provide tax benefits unless you're already close to itemizing. Focus on fixing your withholding first, then consider charitable giving as a separate decision rather than a tax strategy.

For RSUs specifically, make sure you understand that they're typically taxed TWICE: 1. When they VEST (this is included in your W-2 as ordinary income) 2. When you SELL the shares (capital gains/losses on any change in value since vesting) The most common mistake people make is not realizing that the vesting value is already on their W-2, then reporting the full sale amount as capital gains. This results in paying tax twice on the same income!

Just wanted to add my experience as someone who went through this exact situation last year. TurboTax Premier absolutely can handle W-2 + 1099-NEC + RSUs, but there are a few things I wish I'd known beforehand: For the 1099-NEC, you'll enter it under "Business Income" and TurboTax will create a Schedule C-EZ for you (since it's under $5,000). Don't forget you can deduct business expenses like mileage and a portion of home office costs if you worked from home for that contract work. For RSUs, the Fidelity import usually works well, but ALWAYS verify the cost basis is correct. I caught an error where TurboTax had imported some of my shares with a $0 cost basis instead of the vesting date value, which would have caused me to overpay by hundreds of dollars. One tip: Keep your Fidelity year-end tax documents handy when doing the import. Sometimes TurboTax asks for clarification on certain transactions, and having those documents ready saves time. Given your situation seems straightforward (no complex deductions or multiple business entities), Premier should work great and save you the cost of a tax professional. Just take your time with the stock transactions and double-check everything before filing!