Has anyone here successfully claimed the R&D credit for software that ultimately didn't work out? We spent about $120k developing a specialized analytics tool but ultimately abandoned it because we couldn't solve some key technical problems. Can we still claim the R&D credit even though the project failed?

@Rajiv Kumar - Based on what you've described, your custom SaaS development sounds like it has strong potential for R&D credit qualification. The key factors working in your favor are: 1) creating new functionality not previously available, 2) solving technical challenges, and 3) having your developer document the process. However, I'd recommend being extra careful about a few things given your setup. Since you're using an outside developer, make sure your contract clearly establishes that you retain substantial rights to the software and bear the financial risk of the project. The IRS scrutinizes contractor arrangements closely for R&D credits. Also, with the Section 174 changes mentioned by Ryan Kim, you'll need to capitalize and amortize your $75k investment over 5 years starting in 2022, but you can still claim the R&D credit in the year the expenses were incurred. This actually makes the credit more valuable since you're getting an immediate credit against expenses that are now spread over multiple years. One practical tip: if you do move forward with claiming the credit, consider getting professional help with the documentation. The IRS four-part test requires very specific language and evidence, and it's easy to miss subtle requirements that could trigger an audit or disqualification.

Just wanted to add a few things from my experience claiming vision expenses in Ontario: 1. Don't forget about contact lenses if you use them - they're also eligible medical expenses, including contact lens solutions if prescribed by your optometrist. 2. If you need to travel to see a specialist (like for complex prescriptions or eye conditions), you can claim travel expenses too - 61 cents per kilometer for 2024 if you drove. 3. Consider timing your purchases strategically. Since you can claim medical expenses for any 12-month period ending in the tax year, you might want to coordinate with other family members' medical expenses to maximize the benefit. 4. Keep digital copies of all receipts - I learned this the hard way when my original receipt faded and became unreadable years later during a CRA review. The threshold can be tricky to hit on your own, but if you're married/common-law, you can combine medical expenses with your spouse to reach that $2,635 or 3% threshold more easily. Good luck with your new glasses!

Great thread everyone! As someone who just went through this process, I wanted to add a few practical tips: Make sure to ask your optometrist to note on your prescription if you have any specific medical conditions affecting your vision (like astigmatism, presbyopia, etc.) - this can help justify the medical necessity if questioned. Also, if you're getting progressive lenses or bifocals, these are typically fully claimable since they're addressing a medical vision condition. Same goes for specialized coatings if they're prescribed for medical reasons (like anti-reflective coating for people with light sensitivity). One thing I learned is that if you're self-employed, you might be able to claim a portion of your glasses as a business expense instead of (or in addition to) medical expenses, especially if you do a lot of computer work. Worth checking with an accountant if that applies to your situation. And definitely shop around for prices - the medical expense credit is based on what you actually paid, so finding a good deal means you still get the same percentage back but spend less upfront!

I'm wondering if something fishy is happening with your therapist's taxes. My wife is a private practice therapist, and she's REQUIRED to provide documentation of payments to clients. For cash payments, she gives a receipt at each session and provides year-end statements in January. The fact your therapist is charging extra for this basic business function suggests either extremely poor business practices or possibly tax evasion. Neither is good. If you continue with her, I'd strongly suggest switching to checks or electronic payments and getting receipts for EVERY payment going forward.

As someone who's navigated similar documentation challenges with healthcare providers, I'd recommend taking a two-pronged approach. First, create your own detailed payment log immediately using your calendar, bank withdrawal records, and any text/email communications about appointments. This shows good faith effort to maintain records. Second, send your therapist a formal written request (email is fine) stating that you need payment documentation for legitimate tax purposes. Offer to pay reasonable administrative costs if needed, but emphasize this is standard business practice. If she continues to resist, consider that this may indicate larger issues with her business practices. For future payments, absolutely switch to checks or electronic transfers that create automatic paper trails. You shouldn't have to chase down basic payment records from any professional service provider. The IRS accepts various forms of documentation for medical expenses, but having a clear paper trail makes everything much smoother during tax preparation and potential audits.

Your CPA is being honest about their limitations. My previous accountant tried to help with my Form 5500 despite limited experience and completely messed it up. Cost me $5,200 in penalties that took months to get abated!!! Consider calling Schwab directly - since they're your plan provider, they might have resources or recommended partners who specialize in these filings. Many providers have relationships with TPAs who can handle this for reasonable fees.

I'm dealing with the exact same situation! My CPA also declined to handle Form 5500 for my solo 401k, which left me scrambling. After reading through all these responses, I'm leaning toward trying one of the tech solutions mentioned here rather than paying $375+ for a TPA. The penalty risks are what really concern me - $250 per day adds up fast if you mess something up. Has anyone here actually dealt with IRS penalties for Form 5500 mistakes, and how difficult was the abatement process? I want to understand the real-world consequences before deciding between DIY with assistance tools versus hiring a specialist. Also curious if anyone has compared multiple TPAs for pricing - $375 seems steep for what should be a relatively straightforward filing for a solo plan.

I tried claiming a similar situation with my college roommate who I was supporting and got audited. The big thing the IRS looked at was whether I had an actual "landlord-tenant relationship" or a genuine "household member" situation. Since we had separate leases (even though I paid both), the IRS ruled it wasn't eligible. For your situation, make sure: 1. You have a single lease with both names 2. Keep receipts for ALL expenses you pay for them 3. Get documentation from their school showing they're enrolled full-time 4. Have them sign Form 8332 if possible

Has anyone looked into whether the money exchange between families in the foreign country could be seen as income to the roommate? Like if the IRS views it as the roommate providing a "money transfer service" for a fee (the free housing), couldn't that be considered income to the roommate, making them ineligible as a dependent?