Just wondering, does your dad's tax preparer work at a major chain or are they independent? I worked at one of the big tax prep companies and we had specific training on dependent tests. This mistake seems really basic for a professional.

This is definitely a frustrating situation, but you're absolutely right to question this. The tax preparer is incorrect about the income limits for dependents your age. Since you're 21 and not a student, the income test for qualifying child status is $4,700 for 2024 - not the standard deduction amount. Your income of $12,630 far exceeds this limit, so you cannot be claimed as a qualifying child dependent. For qualifying relative status, your father would need to provide more than half of your total support for the year. Given your income level, this seems unlikely unless you had very high expenses that he covered. Here's what I'd recommend: 1. Don't sign any tax documents that list you as someone else's dependent 2. Show your father and his tax preparer the official IRS Publication 501 which clearly outlines these rules 3. Request that your father file an amended return (Form 1040-X) to remove you as a dependent 4. File your own return claiming yourself If your father refuses to amend his return and you file correctly claiming yourself, the IRS will send correspondence to both of you to resolve the duplicate claim. You won't be penalized for filing correctly, but be prepared to provide documentation of your income and support situation. Don't let anyone pressure you into filing incorrectly just to avoid conflict. The rules are clear, and you have every right to claim your own exemption.

Dont forget to check if u need to include any earnings/losses that happened during the recharacterization period too!! When I did mine last yr, the amount that moved from roth to traditional was more than my original contribution because of some gains, and that affected how I reported it on form 8606. turbotax was a bit confusing on this part tbh.

I went through a very similar situation last year and it really is confusing! One thing that helped me was understanding the timeline clearly: since you made the 2023 contribution in 2024 (before April 15) and then recharacterized it in 2024, both actions affect your tax reporting. You'll definitely need to file Form 8606 for 2023 to report the nondeductible Traditional IRA contribution (since that's what it became after recharacterization). The key thing I learned is that the recharacterization is treated as if the money went directly to the Traditional IRA from the beginning - so it never "counts" as a Roth contribution for tax purposes. For your 2024 return, you'll report the recharacterization itself. TurboTax should handle this when you enter your 1099-R information, but make sure you have all the documentation from your IRA custodian showing the proper recharacterization codes. I'd recommend getting your custodian statements that show exactly what happened and when, because the timing and proper documentation is crucial for reporting this correctly. The good news is once you get through this year, future backdoor Roth conversions will be much more straightforward!

I'm an Enrolled Agent and see this situation frequently with contractors and mobile service businesses. Here's what you need to know: 1) Employee snacks and beverages like you're describing are typically 100% deductible as de minimis fringe benefits, even when not provided at a traditional office. 2) The key distinction is between "snacks/refreshments" vs "meals" - if you're buying actual meals (like hot food from the deli counter), those would likely fall under the 50% limitation. 3) Document, document, document! Note on receipts: date, business purpose, who received the items. 4) Be reasonable with amounts - $5-10 per employee for snacks/drinks won't raise eyebrows, but large amounts might trigger questions. 5) Consider setting up a specific credit card just for these purchases to make tracking easier. Hope that helps! The mobile nature of your business doesn't eliminate deductions that would be available in a traditional office setting.

This is really helpful information everyone! I run a small plumbing business and face the exact same situation - always on the road with my crew and grabbing drinks/snacks to keep morale up during long days. One thing I'd add from my experience: if you're doing this regularly, consider getting a business credit card specifically for these employee-related expenses. It makes tracking so much easier at tax time, and you can set spending limits if needed. Also, don't forget that if you're providing these snacks consistently, your employees might need to report them as income if they exceed the IRS de minimis thresholds. But for occasional convenience store runs like you're describing, that's usually not a concern. Keep doing what you're doing - happy employees are productive employees, and the IRS recognizes legitimate business expenses for employee benefits even in mobile work situations.

This thread has been incredibly helpful! As someone who just became a partner in a small business this year, I was completely lost on these concepts. One thing I'm still confused about - my K-1 shows a negative capital account balance. How is that even possible? I contributed $25,000 initially and we've been profitable, but somehow my capital account is showing -$8,000. The partnership has some equipment loans, but I thought debt was supposed to help my basis, not hurt my capital account? Also, is there a difference between what shows up on the K-1 as my capital account and what I should be tracking for tax basis purposes? I feel like I'm missing something fundamental here.

This has been such an educational thread! I'm dealing with a similar K-1 situation and have been going in circles trying to understand these concepts. One thing that's really helping me is keeping separate worksheets for my capital account reconciliation versus my outside basis calculation. They're related but definitely not the same thing, as several people have pointed out. For anyone still struggling with the inside vs outside basis concept, I found it helpful to think of it this way: inside basis is what the partnership thinks its assets are worth for tax purposes, while outside basis is what YOUR interest in the partnership is worth for YOUR tax purposes. They can diverge because of timing differences in when income/losses are recognized, different depreciation methods, or various elections the partnership makes. The debt aspect that @Chloe Anderson and @Declan Ramirez mentioned is crucial - I didn't realize that even nonrecourse debt could increase my basis until I started tracking everything more carefully. It's definitely worth creating that quarterly tracking system rather than trying to reconstruct everything at year-end!

This is a great question that trips up a lot of people! The SALT deduction cap is one of the most confusing parts of the current tax code. Just to add some context to the excellent explanations already given - the reason you're seeing such a dramatic difference between 2024 and 2025 is likely because: 1. You mentioned buying a house in late 2024, so 2025 is your first full year of property tax payments 2. Property taxes can easily be $15k-25k+ annually depending on your location and home value 3. Combined with state income taxes, this quickly pushes you over the $10k cap One thing to keep in mind is that this SALT cap is currently set to expire after 2025, so it may not be a permanent limitation. However, nothing is guaranteed until Congress acts. Also, make sure you're not double-counting any property taxes that might have been prorated at closing - those should only be deducted once, in the year you actually paid them to the tax authority (not necessarily when they were due).

One thing that might help clarify the SALT situation is understanding that the $10,000 cap is per tax return, not per person. So if you're single, you get $10,000. If you're married filing jointly, you still only get $10,000 total (not $10,000 each). This is why some married couples consider filing separately - each spouse could potentially claim up to $10,000 in SALT deductions on their separate returns. Also, since you mentioned using FreeTax USA, make sure you're looking at the right forms. Your total SALT taxes paid will show up on the detailed worksheets, but only up to $10,000 will actually flow through to your Schedule A as a deduction. The software should clearly show both numbers - what you paid versus what you can deduct. Given that you bought a house in late 2024, you're probably going to be dealing with this cap for the foreseeable future. It might be worth tracking your quarterly estimated state tax payments and property tax payments throughout the year so you can plan ahead for next year's filing.