Do we need to scan and upload the W-2 when using tax software, or just manually enter the numbers? I'm using H&R Block online for the first time and not sure if I need to have my scanner ready.

Most tax software lets you do either option. You can manually enter all the numbers from your W-2 into the appropriate boxes in the software, which is what I usually do. Many tax programs now also have the option to take a photo of your W-2 with your phone or upload a scanned copy, and they'll automatically extract the data. This can save time and reduce errors, but I still always double-check the numbers after the software imports them. Sometimes the automatic reading misses things or puts data in the wrong fields.

How long should we keep these forms? I've got a drawer full of tax docs going back like 10 years and would love to clean it out!

The general rule is to keep tax documents for at least 3 years after filing, since that's how long the IRS has to audit your return for most situations. However, if you had unreported income that's more than 25% of what you reported, they have 6 years. And if you never filed or filed a fraudulent return, there's no time limit. I personally keep mine for 7 years to be safe, then shred everything older than that. So you could probably safely get rid of anything from 2016 and earlier at this point. Just make sure to properly shred or destroy them since they contain sensitive financial information!

This is literally the worst advice possible. The IRS already has OP's W-2 information from their employer. Not filing when you're entitled to a refund is just giving free money to the government. And the IRS virtually never audits low-income people - they don't have the resources to go after small fish.

Does that $600 threshold include the full sale amount or just profit after fees? Like if I sell $1000 worth of clothes but the platforms take $200 in fees, what number counts toward the $600?

The $600 threshold applies to the gross amount of payments processed - so that's the full sale amount before the platforms take their cut with fees. In your example, the full $1000 would count toward the threshold, not the $800 you actually receive after fees. That said, when you report your income on Schedule C, you'll be able to deduct those platform fees as a business expense to reduce your taxable income. So you're only paying taxes on your actual earnings, but the reporting threshold is based on the total transaction amount.

That sounds stressful! Did you end up owing more in taxes after the audit? I'm new to this and trying to avoid mistakes.

@Amara Okonkwo It ended up being more of a headache than a financial disaster, but I did have to pay some penalties and interest. The auditor disallowed about 60% of my home office deduction because I couldn t'prove exclusive business use - I had claimed my whole guest bedroom but it was obvious I used it for other things too. The lesson I learned is to be really conservative with deductions unless you have rock-solid documentation. Now I only claim the corner where my inventory shelves are, and I measure and photograph everything. Better to claim less and be safe than deal with an audit again!

Omg yes this happened in my family too! My uncle and my mom both claimed my grandpa and didn't tell each other. The IRS rejected my mom's electronic filing and it turned into this whole dramatic thing with everyone taking sides. Holidays were AWKWARD that year!!

The aftermath was brutal! Both my cousins got hit with penalties, and they still barely speak to each other three years later. Thanksgiving is super uncomfortable now. The IRS doesn't care about family drama - they just want the correct person to claim the dependent. If multiple people provide support, sometimes it's better to rotate who claims the dependent each year (with a Multiple Support Declaration) rather than destroy family relationships over a tax credit.

For free resources on Medicaid planning, I'd recommend starting with your state's SHIP (State Health Insurance Assistance Program) - they provide free counseling on Medicare, Medicaid, and other benefit programs. You can find your local SHIP through the Medicare.gov website or by calling 1-800-MEDICARE. Also check with your Area Agency on Aging - they often have benefits counselors who can help you understand how claiming a dependent might affect future Medicaid eligibility. Many of these services are completely free since they're federally funded. The National Council on Aging also has a BenefitsCheckUp tool online that can help identify programs your mom might be eligible for and flag potential issues with dependency status. It's worth running through this before making your final decision on claiming her as a dependent.

For free resources on Medicaid planning, I'd recommend starting with your state's Area Agency on Aging - they usually have benefits counselors who can help navigate these issues at no cost. You can also try the National Council on Aging's Benefits CheckUp tool online, which helps identify potential benefit conflicts. Another good resource is your local Senior Legal Aid office if you have one. They often provide free consultations specifically for benefit eligibility questions. Some states also have SHIP (State Health Insurance Assistance Program) counselors who are trained on how different income sources and dependency status affect Medicare and Medicaid eligibility. The key thing to remember is that Medicaid looks at your mom's actual financial situation, not just her tax filing status. But you're absolutely right that it's worth checking before making the dependency decision - Medicaid benefits can be worth way more than a $500 tax credit if she needs long-term care down the road.