One important thing nobody mentioned - you need to track your expenses CAREFULLY! I made this mistake my first year of selling handmade stuff. Just because PayPal only reports income over $600 doesn't mean you can't deduct your legitimate business expenses. Save receipts for EVERYTHING related to your digital design work. Software, hardware, portion of internet bill, even a percentage of your electricity if you work from home. These deductions can often bring you below the $400 threshold where you'd need to pay self-employment tax. I learned this the hard way!

Another thing to consider is quarterly estimated tax payments. If you expect to owe more than $1,000 in taxes for the year, you're supposed to make quarterly payments instead of paying it all when you file your return.

Has anyone dealt with a situation where one heir wants to buy out the other after a partial step-up? My brother and I inherited our parents' vacation home (50% each, at different times), but now he wants to sell his half to me. We're struggling to figure out the right price since we have different tax basis amounts.

This is exactly the kind of situation where proper planning can save your family tens of thousands in taxes. You're absolutely right to avoid the lifetime gift route - that would be a costly mistake. One thing I'd add to the excellent advice already given: make sure your uncle's estate planning documents are crystal clear about bypassing his spouse for the property transfer. Depending on your state, there could be spousal elective share issues that complicate things if not handled properly in his will or trust. Also consider having a family meeting now to discuss what happens if either you or your cousin wants to sell their share later, or if one of you can't afford the ongoing property taxes and maintenance. It's much easier to agree on buy-sell arrangements while everyone is getting along than after emotions and money stress get involved. The stepped-up basis approach you're planning is definitely the right move tax-wise. Just make sure all the legal paperwork supports that plan.

Has anybody had the situation where supplemental property tax bills arrive YEARS after you bought the property? We just got one from 2022 last month and it made me miss the SALT deduction for that year since I already filed! So annoying.

Great discussion here! One thing I'd add is that if you're close to the $10,000 SALT cap, it might be worth calculating whether bunching your property tax payments could be beneficial. For example, if you're going to be slightly over the cap in both 2023 and 2024, you might consider paying both installments in one year to maximize the deduction in that year, then potentially having more room for other SALT deductions (like state income taxes) in the other year. Also, make sure you're keeping good records of all payment dates and amounts. The IRS can be particular about documentation for property tax deductions, especially with supplemental bills that might not follow the typical payment schedule. I always recommend keeping copies of the cancelled checks or bank statements showing the exact payment dates, since that's what determines which tax year you can claim the deduction.

I'm going through the exact same thing! Filed my AZ return on March 8th and it's been stuck on "Your return is being processed" for over 2 months now. The frustrating part is that my federal refund came through in less than 3 weeks, so it's definitely an Arizona-specific issue. I've been reading through all these comments and it sounds like there are a few things we can try: 1. Call right at 8:00 AM sharp when they open 2. Check the AZ Dept of Revenue website directly with our SSN instead of just using the confirmation number 3. Make sure all our info (address, bank details) exactly matches what's on our W-2 4. Contact our state representative if nothing else works The suggestions about taxr.ai and Claimyr are interesting too - might be worth trying if we can't get through the normal channels. It's ridiculous that we have to pay third parties just to get our own money back from the state, but at this point I'm desperate. Thanks for posting this - at least we know we're not alone in dealing with Arizona's broken system! Keep us updated if you make any progress.

I'm experiencing the exact same issue! Filed my Arizona state return on March 20th and it's been stuck on "Your return is being processed" for almost 2 months now. My federal refund was deposited within 2 weeks, so this is definitely an Arizona problem. After reading all these comments, I'm going to try a few things: 1. Check the status using my SSN directly on the AZ Dept of Revenue website instead of just the confirmation number 2. Set my alarm for 7:59 AM tomorrow and call exactly at 8:00 AM 3. Double-check that my address and bank info exactly match what's on my W-2 If none of that works, I'll contact my state representative - seems like that's been the most successful approach for people here. It's absolutely ridiculous that we have to jump through all these hoops just to get our own money back, but at this point I'm willing to try anything. Thanks for starting this thread - it's somewhat comforting to know we're all dealing with the same broken system. Arizona really needs to fix their processing issues!

Don't forget that if your income is under $60,000, you can get your taxes done for FREE through the VITA program (Volunteer Income Tax Assistance). They're specifically trained to help with credits like the EITC and Child Tax Credit. Just Google "VITA site near me" to find locations. This will save you from paying for tax software and they'll make sure you get every credit you qualify for. I've used them for years and they're amazing volunteers who really know their stuff about tax credits for families!

Remember that if your baby was born in 2024, they count as your dependent for the ENTIRE year, even though they weren't here the whole time! This surprises a lot of new parents. You get the full Child Tax Credit and they count for EITC purposes for all of 2024. Also make sure you're getting any state tax credits too! Many states have their own version of EITC that piggybacks off the federal one, so you could get even more money back.