So does that mean if something old gets stolen, you basically get no deduction because it was already depreciated in value? Like if thieves take a 10-year-old TV that's practically worthless now but costs $500 to replace?

That's exactly right - and it's why casualty losses often end up being less than people expect. If your 10-year-old TV had depreciated to a fair market value of only $50 before it was stolen, that's your deduction amount (not the $500 replacement cost). However, for the business/rental portion of your property, you've likely been taking depreciation deductions already, so your adjusted basis should align more closely with the current value. This is actually one advantage of the business portion of casualty losses - they're generally calculated based on the depreciated value that you've been reporting for tax purposes all along.

What if you don't have before photos of everything? My storage shed at my rental got broken into last month and I honestly don't have pictures of what was in there before.

That's really good to know but unfortunately I'm single so that won't help in my situation. Do you know if there's anything similar for individual filers? Like some kind of hardship exception?

There is a hardship exception you can request, but it's very specific to each type of debt. For federal student loans, you'd need to contact your loan servicer directly to request a hardship exception to the offset. They'll send you paperwork to prove extreme financial hardship. For state tax debts, you'd need to contact your state tax authority directly - each state has different criteria for hardship exceptions. Just be aware that these exceptions are pretty rare and usually require documented evidence of severe financial distress. Things like pending eviction, utility shutoffs, or medical emergencies sometimes qualify.

I did this after getting burned by an offset two years in a row. Changed my withholding so I'm just about even at tax time instead of getting a big refund. Now I put the extra amount from each paycheck into a separate savings account. Even if I still owe the debt, at least I'm controlling when and how much I pay instead of having the whole lump sum taken.

That's a really smart approach! I could definitely break mine down similarly into categories like social media, SEO, content development, etc. Did your accountant mention if this categorization approach reduces audit risk at all, or is it more about clarity?

It's mostly about clarity and transparency rather than directly reducing audit risk. My accountant explained that if your return ever gets reviewed, having clearly categorized expenses makes it easier for the reviewer to understand your business model without requiring additional documentation or explanation. Basically, it doesn't necessarily make you less likely to be selected for review, but it can make the review process smoother if it happens. The categorization also helped me better understand my own business spending patterns and make more strategic decisions about which service areas were most profitable.

I use QB for my consulting business and had the same issue. What worked for me was creating custom sub-accounts under the main expense categories. For example, under "Contractors" I have sub-accounts for different types (design, development, writing, etc.). Makes reporting way cleaner and gives me better insights into where the money's going.

9 When you say "issued before 2009" - does that mean the original divorce decree or would modifications after 2009 still count? Our original divorce was in 2008 but we modified the child support arrangement in 2020.

3 It's specifically about when the original agreement about claiming dependents was executed. If your original 2008 decree included the language about who claims the child for tax purposes, that part might still be valid without Form 8332. But if that arrangement was only added in the 2020 modification, then you would need Form 8332. The key thing is that pre-2009 agreements containing "unconditional declarations" about who claims the child can sometimes serve in place of Form 8332. However, the IRS has gotten stricter about this over the years, so having the signed form is always the safest approach regardless.

11 Do you know if the form has to be signed every single year? Or can you have them sign once for multiple tax years?

1 Thanks for bringing that up! Unfortunately, my income was well above the phaseout range for both years (around $190k single in 2022 and $210k in 2023). So I'm definitely in the "completely ineligible" category and need to correct the full contributions. What's strange is my custodian (Fidelity) told me I can't recharacterize the 2022 contribution anymore since it's past the deadline, but they didn't automatically flag the contribution as excessive when I made it. Shouldn't they have some system to prevent ineligible contributions?

11 Custodians don't typically monitor your income or eligibility - they're required to accept contributions as long as you're under the annual dollar limit. The responsibility for determining eligibility based on income falls entirely on you as the taxpayer. This is one of the confusing parts of the retirement system - the custodian only checks that you're not exceeding the maximum contribution amount ($6,000 for 2022, $6,500 for 2023 for IRAs), but they have no way of knowing your income or filing status to determine if you're eligible for Roth vs Traditional. They rely on you to make that determination based on your tax situation.

15 I've helped clients with this decision before. While paying the 6% penalty might seem easier, remember it applies EACH YEAR the excess contribution remains in the account. So a $6,000 excess contribution would cost $360 the first year, another $360 the next year, and so on. Also, those excess contributions and their earnings will eventually face taxation again when distributed. Generally, it's better to correct the issue completely rather than paying the penalty, especially since the removal process is a one-time effort versus ongoing penalties.