That's actually a really good idea. I didn't consider Costco might take it back since I installed it. I'll give them a call tomorrow and see what they say. Did you return yours to the store or did you have to call their customer service line first?

I just took it back to the store with my receipt. The person at the return counter didn't even ask any questions, just processed the return right away. Costco's return policy is pretty great for most things. Just make sure you bring the original packaging with everything that came in the box, even if it's been opened.

Does FreeTaxUSA handle K-1 forms and rental properties well? I've been using TurboTax Home & Business for years but the price keeps going up every year. Worried about switching and missing deductions though.

That's a really good point I hadn't considered fully. My daughter did have an internship last summer and works part-time during school, probably earning around $14,000 for the year. Would that be enough to utilize most of the credit?

With $14,000 in earnings, your daughter should have enough tax liability to utilize a good portion of the non-refundable part of the AOTC. After the standard deduction (around $13,850 for 2023), she'll have a small taxable income. Even with minimal tax liability, she'll still get the $1,000 refundable portion, plus whatever portion of the $1,500 non-refundable part her tax liability allows. So while she might not get the full $2,500, she'll likely get significantly more than $1,000. Definitely worth calculating both scenarios to see which benefits your family more overall.

Yes, scholarships definitely impact the AOTC calculation! Tax-free scholarships that are used for qualified education expenses (tuition and required fees) reduce the amount of expenses eligible for the credit. However, if the scholarship is used for room and board (by including it as taxable income), then it doesn't reduce qualified expenses.

You can request a tax transcript though right? Even if they haven't fully processed it?

Unfortunately, the transcript isn't available until they've processed your return, which is exactly the problem. You can get transcripts from previous years, but not for a return that's still sitting in their paper backlog. My mortgage lender ended up needing additional documentation and it delayed my closing by almost a month. Just wanted to mention it in case you might need proof of filing for anything important this year.

Do you report the different insurance costs separately on your taxes? Like rideshare insurance vs commercial taxi insurance? Or is it all just lumped together as "insurance expense"?

You should definitely separate the insurance expenses when reporting on your taxes. The commercial insurance for your taxi service is a direct expense for that business, while your rideshare insurance is specific to your Uber/Lyft work. In QuickBooks, I create separate expense categories for each type of insurance and allocate them accordingly. This gives you a more accurate picture of the profitability of each business activity. Your tax professional (or tax software) will appreciate having these costs properly separated, and it helps ensure you're getting the maximum deduction while also maintaining clean records in case of an audit.

That's a great tip about the separate phone number! Hadn't thought about that. Did you find that QuickBooks worked well for tracking both businesses? And did you end up forming an LLC eventually or kept everything as sole proprietorships?

QuickBooks Self-Employed worked pretty well for me. I created separate income categories and would tag each deposit appropriately. I did find that I needed to be really disciplined about entering everything promptly and tagging it correctly. I actually did form an LLC after my second year when my combined income from both businesses hit about $75,000. Before that, the costs of maintaining the LLC and doing the extra paperwork didn't make financial sense. My accountant advised waiting until I hit that income threshold. When I did form the LLC, I put both business activities under the same entity since they were related services. If you do form an LLC, you can still use QuickBooks Self-Employed, but you might want to consider upgrading to QuickBooks Online as it has more features for managing a formal business entity.

Thanks for bringing this up! My company actually did mention "early exercise" as an option but I didn't really understand what it meant or why I would do it. Is there any advantage to exercising early before the options vest? And what exactly is an 83(b) election?

The main advantage of early exercise is potential tax savings. When you exercise options, you're taxed on the difference between the exercise price and the fair market value at the time of exercise. By exercising early when the company valuation is still low, that difference might be small or even zero, minimizing your tax hit. An 83(b) election is a form you file with the IRS within 30 days of exercising unvested options. It tells the IRS you want to be taxed on the shares at the time of exercise rather than when they vest later. This is crucial because without it, you'd be taxed again at each vesting date based on the potentially higher fair market value at that time. The 83(b) essentially locks in your tax obligation at the lower early value. It's especially valuable for startup employees who expect the company's value to increase significantly over time.

Do you know if there's any specific form or documentation we should ask the company for regarding the 409A valuation? My startup is pretty disorganized with this stuff.