Just wanted to add a practical tip about timing your expenses for maximum tax benefit. Since rental property expenses are deductible in the year paid (not when incurred), you have some flexibility with year-end planning. For example, if your rental property is showing a profit this year and you're hitting the passive activity loss limitations, consider prepaying some January expenses in December - things like insurance premiums, property management fees, or scheduled maintenance. This can help offset current year rental income. Conversely, if you're already maxed out on passive losses you can use this year, it might make sense to defer some discretionary expenses to next year when you might have more rental income to offset. Also, regarding the mortgage interest - keep copies of all your loan statements, not just the 1098 forms. Sometimes lenders make errors on the 1098s, and having your actual payment records makes it much easier to catch and correct these mistakes. I learned this the hard way when my lender undereported my rental property interest by almost $800 one year!

Great discussion everyone! I want to add something important that I learned from my CPA about the acquisition debt vs home equity debt distinction that could affect your primary residence deduction. The $750K limit applies specifically to "acquisition debt" - loans used to buy, build, or substantially improve your home. If you later refinance and take cash out for other purposes (like funding your rental property purchase), that portion above your original acquisition debt is considered home equity debt and isn't deductible for personal use. So if you originally had a $600K mortgage on your primary residence and later cash-out refinanced to $750K to help buy your rental property, only the first $600K of interest would be deductible as qualified residence interest. The remaining $150K portion would be considered home equity debt. However, if you used that $150K specifically to acquire or improve the rental property, you might be able to deduct that interest as a rental property expense on Schedule E instead. The key is tracing where the loan proceeds actually went - this is called the "debt tracing rules" and requires careful documentation. Just wanted to mention this since many people don't realize that not all mortgage interest on a primary residence automatically qualifies for the personal deduction, especially with cash-out refinances.

Does anyone know if half-day preschool programs qualify for the Child and Dependent Care Credit? My daughter only goes to preschool from 8-12, but I work full time. We have a babysitter in the afternoons. Can I claim both?

Great question about private preschool and Pre-K expenses! You're definitely on the right track. Since both you and your spouse worked full-time, those expenses should qualify for the Child and Dependent Care Credit. The IRS treats preschool and Pre-K as qualifying care for children under 13, even when provided by private schools. However, keep in mind that with two children, you can only claim up to $6,000 in expenses (not the full $14,800 you paid). The credit percentage depends on your adjusted gross income - it ranges from 20% to 35% of your qualifying expenses. So you could potentially get a credit of $1,200 to $2,100. Make sure to collect the school's name, address, and tax ID number (EIN) for Form 2441. You'll need this information when you file. Also, if either of you contributed to a dependent care FSA through work, you'll need to subtract that amount from your eligible expenses to avoid double-dipping on tax benefits.

Have you considered filing through a local VITA (Volunteer Income Tax Assistance) site and then applying for a separate refund advance loan through a financial institution? Ohio has numerous VITA locations that handle self-employment income below certain thresholds, and they file for free. Then you could separately apply for a Tax Refund Express Loan through regional banks like Fifth Third or Huntington that serve Ohio/WV. This separates the filing from the advance, potentially giving you better terms on both. I've seen people get their returns filed more accurately this way while still accessing funds quickly.

I'm in a similar situation and found that TaxAct's Refund Advance program works well for Ohio residents with mixed income. They approved my advance within 24 hours even with Schedule C income, though I had to upload bank statements showing my business deposits. The key was having organized quarterly payment records to the IRS - they seem to use that as verification that your self-employment income is legitimate. One thing to watch out for: make sure you calculate your expected refund accurately because if your actual refund is less than the advance amount, you'll owe the difference immediately. Also, most providers now require you to receive your refund through their bank products, so factor that into your decision. For transportation issues, some tax prep offices offer mobile services or will work with you over video calls for the verification process. Worth asking about if you find a provider you like but can't physically visit.

Has anyone used TurboTax Business to handle their final S-corp return when dissolving? I'm trying to decide if I should use software or hire someone for this final filing. Not sure if the standard software handles dissolution scenarios properly.

I went through this exact process last year when I dissolved my S-corp. For Line 10 on Form 966, you need the date when you formally adopted the resolution to dissolve the corporation. Even as a sole shareholder, you should create a simple written resolution stating your decision to dissolve the S-corp and date it. That's the date that goes on Line 10. Here's a basic template I used: "I, [Your Name], as the sole shareholder and director of [Corporation Name], hereby resolve to dissolve this corporation effective [Date]." Sign it, date it, and keep it with your corporate records. One thing to watch out for - make sure you coordinate the timing with your state filing requirements. Some states want you to file dissolution paperwork with them before submitting Form 966 to the IRS, while others are more flexible. Check your state's specific requirements to avoid any complications.

Your instincts are spot-on! Gifts to family members are definitely not deductible on income tax returns. Your mother-in-law might be confusing a couple of different tax concepts here. The annual gift tax exclusion ($17,000 for 2023, $18,000 for 2024) just means she can give that amount to each person without having to file a gift tax return or use up her lifetime estate tax exemption. But this has absolutely nothing to do with income tax deductions. She might be thinking of charitable donations, which ARE deductible if you itemize, or possibly remembering some old tax rule from way back. Sometimes older folks mix up different aspects of tax law or remember how things worked decades ago. I'd suggest gently mentioning that you've heard gift rules can be confusing and maybe she could double-check with a tax professional before filing. Frame it as wanting to make sure she gets the best advice rather than questioning what she said. The last thing you want is for her to claim an improper deduction and then have to deal with IRS penalties or filing an amended return later. You're being really thoughtful looking out for her like this!

You're absolutely right to be concerned! Your mother-in-law is definitely mixing up different tax concepts. Gifts to family members are never deductible on income tax returns - that's a really common misconception. The $17,000/$18,000 annual gift exclusion amount just means she won't have to file a gift tax return (Form 709) or use up any of her lifetime estate tax exemption when giving those amounts. But it has zero impact on her income taxes. She might be thinking of charitable donations, which ARE deductible if she itemizes, or possibly remembering some old tax rule from years past. Tax laws have changed quite a bit over the decades, and it's easy to get confused. I'd suggest approaching this delicately - maybe mention that you were reading about gift tax rules and wanted to make sure you understood them correctly. You could frame it as wanting to learn rather than correcting her. Something like "I was reading that gift tax rules can be tricky - should we double-check with a tax professional just to be safe?" The last thing you want is for her to claim an improper deduction and then have to deal with IRS penalties or an amended return later. Better to prevent the problem now with a gentle conversation or quick consultation with a tax pro. You're being a really good family member by looking out for her!