17 Quick question - for the home office deduction, does it matter if the space is also sometimes used for other things? Like, I have a desk where I package all my items, but sometimes my kids do homework there too.

22 For the home office deduction, the space needs to be used "regularly and exclusively" for business purposes to qualify. If your kids are doing homework at the same desk, unfortunately that area wouldn't qualify for the deduction since it's not exclusively business use. However, you might be able to claim a portion of your utilities, internet, and phone as business expenses based on the percentage used for business activities without taking the formal home office deduction. Just make sure you can reasonably justify the business percentage you're claiming if ever questioned.

5 Technically, the IRS requires you to report ALL income, regardless of the amount. There's no minimum threshold for self-employment income. If you earned $500 from your side business, you should report it. That said, self-employment tax (Social Security and Medicare) only kicks in when your net earnings are $400 or more. But income tax could still apply to amounts less than that, depending on your overall tax situation.

What about if I'm self-employed with an individual HDHP? I have a premium pass through but no employer technically. Where does that go?

If you're self-employed with an individual HDHP that provides a premium pass through, it's a bit different. In that case, the premium pass through still counts toward your annual contribution limit, but you would report it on Line 2 of Form 8889 because you don't have an "employer" making the contribution. The key is understanding that for self-employed individuals, contributions you make to your HSA (including pass throughs from your individual policy) would go on Line 2, while still being mindful that these count toward your annual limit. Just make sure not to double-count anything, as that's where people often make mistakes.

Thanks so much for mentioning this! I'll definitely contact my HSA administrator about withdrawing that extra $25. Do you know if I need any special form for this or just contact them directly?

You just need to contact your HSA administrator directly. Most have a specific form for "excess contribution withdrawal" or something similar. Make sure you specifically tell them it's to correct an excess contribution for 2024, as this ensures they'll code it properly on your tax forms. They'll usually ask if you want to withdraw any earnings attributed to the excess contribution as well, which you should do to fully correct the issue. The earnings portion will be taxable in the year you receive the distribution, but at least you'll avoid the 6% excess contribution penalty.

Thanks for breaking this down! Yes, my niece had almost no income in 2023 (less than $2,000 from a part-time job that didn't last). And for the baby, they both lived with me from birth in November through the entire year, and I provided well over 90% of all support. The father only lived there briefly and contributed almost nothing financially. Would bank statements showing I paid for diapers, formula, doctor visits, etc. be good evidence? And what about proof that they lived with me - would utility bills showing my address be enough?

Bank statements showing purchases of baby supplies and medical expenses would be excellent evidence. For proving they lived with you, utility bills are helpful, but even better would be: Medical records showing your address for the baby's appointments Any official documents like the birth certificate that might show your address Statements from doctors, childcare providers, or even neighbors confirming they lived with you Letters from social services or benefits offices if any benefits were received at your address The more documentation the better, but focus on official documents when possible. Also, if you can show that the father's address was different during most of this period, that would further strengthen your case.

Actually this isn't completely true anymore. With the new IRS systems, sometimes you CAN e-file even with a duplicate SSN claim. The system will accept it but flag it for review. A friend of mine was able to do this last year rather than paper filing.

That's a great point I hadn't considered. Do you know if there's a specific form or method for documenting the basis value as of my residency date? Did you use a particular service for your valuation?

There's no specific IRS form for documenting your starting basis, but you should create your own detailed records. I used a business valuation service in my home country that was familiar with US tax requirements. They produced a comprehensive report that I keep with my tax records. The method used depends on your business type - for my service-based LLC, they used a multiple of earnings approach. For businesses with more assets, they might use different methods. The key is having a defensible, third-party valuation you can produce if ever questioned. It cost me about $1,500 but was absolutely worth it for the peace of mind.

I tried TurboTax last year for my 5471 with dual status and it was a disaster. The software doesn't really handle the dual status situation well with foreign entities. It kept trying to report my full-year income even though I clearly indicated my residency date. I ended up having to use a tax professional instead.

That's actually a really good point! I went back through my records and realized I might have been using the wrong acquisition dates for some of the investments. Would it be better to get a tax professional to look over my amendment before I submit it?

Absolutely get a professional to review your amendment, especially with capital losses involved. The rules around basis reporting, wash sales, and carry-forward losses can get extremely complicated. A qualified tax pro can verify your calculations and potentially find additional deductions you missed. The fee is usually worth it when you're dealing with amounts this significant. The last thing you want is to amend your return only to find out you made another mistake that triggers an audit.

Yep. Interest starts accruing from the original due date regardless of when you file an amended return. The current IRS interest rate is around 7% I think?