One thing I learned the hard way as a pianist - make sure you clearly document which vehicle expenses go with which type of income! I got flagged for an audit because I deducted all my travel, but some was for my W-2 teaching position (not deductible) and some for my 1099 gigs (deductible). Keep a mileage log with dates, destinations, purpose, and which "job" it was for. There are apps that can help track this automatically. This distinction between W-2 and 1099 related expenses is super important and something many musicians miss.

As someone who's navigated the musician tax maze for years, I want to emphasize something that hasn't been mentioned yet - the importance of understanding the "exclusive use" test for your home studio deduction. Since you mentioned teaching private lessons from your home studio, you can absolutely deduct that space, but it must be used EXCLUSIVELY for business purposes. If your home studio doubles as a family room or storage area, the IRS won't allow the deduction. The space needs to be dedicated solely to your music business activities. For calculating the deduction, you can either use the simplified method ($5 per square foot up to 300 sq ft) or the actual expense method (percentage of home expenses based on square footage). Given your multiple income streams, I'd recommend the actual expense method since you can likely justify a larger deduction. Also, don't forget about the Section 199A deduction (QBI deduction) for your 1099 income! As musicians with Schedule C income, you may qualify for up to a 20% deduction on your qualified business income. This can be substantial savings that many musicians overlook. One last tip - consider whether any of your equipment purchases qualify for Section 179 depreciation, which allows you to deduct the full cost in the year of purchase rather than depreciating over several years. This applies to items like recording equipment, instruments, and computers used for your business.

My tax guy told me that when you have a 1099-R with code J, you should also include a statement with your tax return explaining the situation. He said its not technically required but can help prevent questions from the IRS later. Has anyone else been advised to do this?

I went through this exact situation last year with a 1099-R code J for an excess Roth contribution removal. Everyone's advice here is spot on - you'll report the full amount on line 4a and $0 on line 4b since it's just returning your already-taxed contribution. The most important thing that some tax software misses is Form 5329. You absolutely need to file this form to report the 6% excise tax for both 2022 and 2023. TurboTax should prompt you for this when you indicate it was an excess contribution removal, but double-check that it's including Form 5329 in your filing package. Also, don't worry about box 2b being checked - that's completely normal for this type of distribution. The brokerage is basically saying "we're not making the taxability determination, that's between you and the IRS," which is standard practice for excess contribution removals. Keep all your documentation from Vanguard showing the removal request and confirmation, plus records of the excise tax payments. This will be helpful if there are any questions later.

Has anyone here actually had their NOL challenged by the IRS? I'm worried about carrying forward my losses properly.

This is such a common source of confusion! I went through the exact same thing last year with my construction business. The key thing to remember is that for tax purposes, NOL is calculated from your bottom-line taxable income - meaning AFTER all legitimate business deductions including mortgage interest. In your example, you're absolutely correct that you'd have a $1300 NOL in year 1, and you'd carry forward $1040 (80% of $1300) to offset year 2's income. So you'd only owe taxes on $60 in year 2. The confusion often comes from mixing up accounting terminology (operating income) with tax terminology (taxable income). For IRS purposes, it's always about your final taxable income after ALL deductions. One tip: make sure you're tracking your NOL carryforward amounts carefully each year. I use a simple spreadsheet that shows the original NOL, how much I've used each year, and what's remaining. The IRS loves documentation if they ever question it.

Honestly, podcasts have been my favorite way to learn! I listen to "Money Girl" and "Taxgirl" on my commute. They explain complicated tax concepts in everyday language and keep you updated on changes.

As someone who was completely overwhelmed by taxes when I started working, I found that combining multiple learning approaches worked best for me. Start with the IRS's free "Understanding Taxes" online modules - they're actually pretty well designed for beginners and cover the fundamentals without being too dry. What really helped me was creating a simple spreadsheet to track different tax concepts as I learned them. For example, I'd note down what each box on my W-2 meant, common deductions I might qualify for, and how tax brackets actually work (spoiler: it's not as scary as it sounds!). Also, don't underestimate the value of going through last year's tax return line by line, even if someone else prepared it. Understanding what happened with your own taxes is often the best way to learn the practical side of things. You can use tax software to "practice file" your previous year's return and see how different scenarios would change your outcome. The key is starting simple and building up your knowledge gradually. You don't need to become a tax expert overnight!

Something nobody's mentioned yet - if your new home purchase was after Dec 15, 2017, and your old one was before that date, there's actually different rules that apply to each! Mortgages from before that date can still use the old $1M limit rather than the new $750k limit. In your case, the first mortgage from 2017 would fall under the old rules, while the December 2025 mortgage would fall under the new rules. This means you might be able to deduct more than you think.

Has anyone used TurboTax for this kind of situation? I'm having the same issue but can't figure out where to enter the acquisition dates for my mortgages so it calculates the limitation correctly.