One thing nobody's mentioned yet - don't forget about the self-employment tax implications. When you're deciding whether to take the full deduction for your business expenses or not, remember that reducing your net income also reduces your self-employment tax (which is currently 15.3% for 2025). So if you don't deduct your business expenses, you'd pay more in SE tax, which might offset some of the benefit of the higher 401k contribution. It's usually better tax-wise to take all legitimate business deductions and then calculate your Solo 401k contribution based on the lower net amount.

Don't overthink this! Just use the IRS formula: your contribution limit is lesser of $22,500 or your net earnings. And you ALWAYS wanna deduct business expenses. I made the mistake of not tracking my expenses properly when I started my side hustle and probably overpaid hundreds in taxes. Oh and btw the plan needs to be established by Dec 31st of the tax year, but you can actually make the contributions up until your tax filing deadline (including extensions). Super helpful if you're tight on cash at year end!

Make sure you're keeping track of the adjusted basis for any replacement shares! The wash sale rule disallows the loss, but that loss doesn't disappear forever - it gets added to the basis of your replacement shares. This matters for when you eventually sell those replacement shares.

I'm dealing with a similar wash sale situation as a non-resident, and this thread has been incredibly helpful! One thing I wanted to add based on my experience is that you should double-check your 1099-B carefully because some brokerages don't always correctly identify ALL wash sales, especially if you have accounts at multiple brokerages. I discovered that I had wash sales that weren't marked on my 1099-B because I sold shares at one brokerage and bought similar shares at another brokerage within the 30-day window. The wash sale rule still applies in this situation, but the brokerages don't communicate with each other to identify these cross-brokerage wash sales. So even if your 1099-B shows some wash sales, make sure to review all your transactions across all accounts to catch any that might have been missed. You'll still need to report these on Form 8949 with code "W" even if they weren't identified by your brokerage.

I'm confused why everyone's saying 7 years. My accountant put our portable toilets under 5-year property when we bought them for our construction company last year. Did we do something wrong???

Great question! I went through this exact same situation when I started my outdoor event business. After consulting with my CPA and doing some research, I can confirm that porta potties are indeed 7-year property under MACRS asset class 00.28. A few key points that helped me: - They're considered tangible personal property, not real property, since they're mobile - You can absolutely use Section 179 expensing if you want to deduct the full cost in year one (subject to income limitations) - If you purchase them late in the year, you might also qualify for bonus depreciation One tip: make sure to keep good records of the business use percentage if you ever use them for personal events. The IRS likes to see clear documentation that they're primarily for business purposes. Also, don't forget to factor in any delivery/setup costs - those can usually be added to the basis of the equipment rather than expensed separately.

Probably unpopular opinion but... just take the money and pay the taxes? All these complicated schemes to save on taxes often end up costing more in professional fees and stress than they save. Plus some can put you in audit territory. My brother won about $200k and just paid the taxes. Simple. No stress. No worrying about IRS problems. And honestly, you still have hundreds of thousands left after taxes. Not worth the headache trying to squeeze out every last dollar imo.

Congratulations on your win! As someone who works in tax preparation, I'd strongly recommend getting professional help given the size of this windfall. One important consideration nobody's mentioned yet - timing your claim strategically. If you're close to year-end, you might want to think about whether to claim in 2025 vs early 2026, depending on your other income and potential tax law changes. Also, make sure you understand California's specific lottery tax rules. CA doesn't tax lottery winnings at the state level the same way as regular income - there are some nuances that could affect your planning. The charitable contribution strategy mentioned earlier is solid, but remember the 60% AGI limitation means you can't offset the entire win in one year through donations alone. You might need to spread charitable giving across multiple years to maximize the tax benefit. Whatever you decide, don't rush into anything. The lottery commission usually gives you several months to claim, so use that time to get proper advice and make informed decisions. This is definitely a situation where spending a few thousand on quality professional guidance could save you tens of thousands in taxes.

Don't forget that property tax rules can vary by state! In some places, property taxes are paid partly in advance rather than fully in arrears. And some counties have weird fiscal years that don't align with calendar years. Might be worth a quick call to your county tax assessor's office to confirm exactly how your local system works before making any decisions.

Great question! I went through the exact same confusion when I bought my first home. The key thing to remember is that for individual taxpayers, property tax deductions follow the "cash basis" rule - you can only deduct what you actually paid out of pocket to the tax authority in that tax year. Since your escrow account didn't make any property tax payments in 2023, you won't have a property tax deduction for your 2023 return. The credit you received at closing from the seller is considered a purchase price adjustment, not a tax payment by you. When you pay the 2023 property taxes in January 2024 (even though they're for the previous year), that's when you'll get the deduction - on your 2024 tax return that you'll file in 2025. Make sure to keep your closing statement and all escrow records organized, as you'll need them for future reference and when you eventually sell the home.