How often should HNW clients have their tax strategy reviewed? Is it something that needs adjustment every year or is a good strategy supposed to last for several years? And does having multiple properties across different states complicate things significantly?

Tax strategies should be reviewed quarterly at minimum, with a comprehensive overhaul annually. Tax laws change frequently, and as a portfolio grows, different strategies become available. What works for 3-4 properties often becomes suboptimal at 10-12 properties. Multi-state portfolios absolutely complicate matters and often require state-specific expertise. Each state has different tax treatments for out-of-state owners, and some entity structures that work well in one state can create unnecessary tax burdens in others. This is especially true with states like California, New York, and Texas, which have very different approaches to taxation.

DSTs have serious downsides though. You lose operational control, returns are often lower than direct ownership, and the fees can be substantial. Plus, you're locked in for the duration with very limited liquidity. They're not always the best choice for active investors who want to grow their portfolio.

This information is not accurate. For a spouse who is unemployed but actively looking for work, the IRS makes an exception to the earned income requirement. Publication 503 specifically addresses this by treating job-hunting as a qualifying activity. In your case, since your wife earned $14,500 and has been actively job searching, you will likely qualify for the credit. The maximum qualifying expenses you can claim for two children is $16,000 anyway, so her earned income won't be a limiting factor here.

You're right, and I stand corrected. I mixed up two different rules. For unemployed spouses actively looking for work, the job search counts as a qualifying activity. Since your wife earned $14,500 and has been job searching, you should qualify for the credit on expenses for both children. Thanks for the correction - this is why tax discussions are so valuable.

Did you have to show the IRS that the job search was during the same hours as the childcare? Wondering because my husband does most of his job searching at night after I get home from work, but the kids are in daycare during the day.

That's a great point! My son did buy some design software and a drawing tablet specifically for this work. Would those be fully deductible even though he also uses them sometimes for school projects?

You would deduct the percentage used for business purposes. So if he uses the software and tablet 70% for paid work and 30% for school, you'd deduct 70% of the cost. Make sure to keep receipts and documentation about the business use percentage in case of questions later. A good practice is to have him keep a simple log for a few weeks noting when he uses the equipment for business vs. personal use to establish a reasonable percentage. For items under $2,500, you may be able to deduct them fully in the year of purchase rather than depreciating them over several years, using the de minimis safe harbor election.

This is getting complicated fast! How would a college student even figure out estimated quarterly payments? Is there some simple calculation?

Wait, I thought electronics like phones and computers (and I'm assuming watches?) were 3-year property, not 5-year? Now I'm confused about how I've been depreciating my business tech.

You're right to be confused because the rules aren't always intuitive. Computer equipment (including peripherals like tablets and smartphones) is actually 5-year property under MACRS, not 3-year as many people assume. This includes smartwatches when they're used as computer peripherals. The IRS classifies most technology and office equipment as 5-year property. The 3-year property class is more limited and generally includes things like tractor units and racehorses. It's a common misconception, so don't worry if you've been using the wrong recovery period - you can correct it going forward.

I've done this in TurboTax. You need to go to the Business section, then look for "Business assets, depreciation & section 179." There's a section specifically for entering assets purchased during the year. You'll enter the watch, its cost, business use percentage, and then it will walk you through options for Section 179, bonus depreciation, or regular depreciation. Don't enter it as a simple expense - that's definitely not correct for something that has a useful life of more than one year. The software should help calculate everything correctly once you enter it as a depreciable asset.

Is 30% really enough? I've been setting aside 35% and still ended up owing more last year.

It really depends on your income level, state taxes, and available deductions. For many people, 30% is a good starting point, but if you're in a high-tax state or making over $100k, you might need to set aside more like 35-40%. If you found 35% wasn't enough last year, try bumping it up to 38-40%. It's always better to end up with a small refund than to owe more than you expected. Also make sure you're maximizing your business deductions - things like home office, business mileage, health insurance premiums, and retirement contributions can significantly reduce your taxable income.

Thanks for mentioning this! Do you know what qualifies as "financial hardship" for an Offer in Compromise? With my house repairs and existing debt, I'm definitely struggling financially, but I do still have income coming in.

The IRS looks at your assets, income, expenses, and ability to pay both now and in the future. There's no specific income threshold - instead, they calculate something called your "reasonable collection potential." In your case, having necessary home repairs (especially structural ones) and existing debt would be factors in your favor, but they'd also look at your ongoing income potential. The fact that you're actively working and earning would make an OIC harder to qualify for, but not impossible. The IRS has a pre-qualifier tool on their website that can give you a rough idea if you might qualify. But honestly, for most people with ongoing income, a payment plan is the more realistic option. The retirement account suggestion would be more helpful for reducing next year's taxes rather than dealing with what you currently owe.