This is such a valuable perspective that I think gets overlooked in these discussions. You're absolutely right about the opportunity cost analysis - when you're already earning enough to be in the 32% bracket, your time becomes pretty valuable. I'm actually in a similar situation and was considering rideshare driving, but when I ran the numbers like you described, I realized I could probably make more money by picking up freelance work in my actual field (software development) even if I only did a few hours per month. Plus that work would be more intellectually stimulating and potentially lead to better networking opportunities. The wear and tear on your car is definitely a hidden cost too. I hadn't really thought about how all those extra miles and stop-and-go city driving would affect maintenance schedules and resale value. That could easily eat into the already thin margins even more. Maybe the sweet spot is doing gig work temporarily for a specific goal (like saving for a vacation or paying off a debt) rather than as a long-term income strategy when you're already earning well from your primary career.

Thanks for sharing your real-world experience! The point about being selective with timing is really smart - I hadn't thought about only working during surge pricing periods to maximize the hourly return. That seems like a much more strategic approach than just grinding out hours whenever. The quarterly tax payments tip is crucial too. I can definitely see how someone could get blindsided by a big tax bill if they're not setting money aside throughout the year. Do you use any specific percentage rule for how much to set aside, or do you calculate it based on your actual tax situation? Also curious - when you say you only work peak hours, roughly how many hours per week does that end up being? And do you find the higher pay rates during those times actually make up for the reduced volume of hours compared to someone who might work longer but less optimal shifts?

I set aside exactly 35% of my net earnings after expenses, which has worked well for my tax bracket. I calculate this on a weekly basis - so if I net $200 after deducting mileage and other expenses, I immediately transfer $70 to my tax savings account. It's become automatic at this point. For timing, I typically work about 12-15 hours per week but only during the highest-demand periods: Friday 5-10pm, Saturday 5-10pm, and Sunday 12-6pm. During these peak times, I'm averaging $25-28/hour gross (including tips and surge pricing) compared to maybe $16-18/hour during slower periods. The math definitely works out better this way. Working 15 peak hours at $26/hour gross beats working 25 random hours at $18/hour gross, plus I get most of my weekend free and put way fewer miles on my car. The key is being disciplined about only logging on when demand is actually high - it's tempting to just turn on the app whenever you're bored, but those slow periods really kill your effective hourly rate.

I used TurboTax for my dependent daughter's return. It asks specifically "Can someone claim you as a dependent?" and you select Yes. Works fine but make sure you choose the free version if eligible - they try to upsell you to deluxe which isn't needed for simple dependent returns.

Yes, TurboTax handles this situation well! I used it for my son who was in the exact same position. The software walks you through it step by step and specifically asks if someone else can claim you as a dependent. Once you answer "yes" to that question, it automatically adjusts everything correctly - the standard deduction amount, eligibility for certain credits, etc. The key is just making sure you answer that question accurately. My son's return was accepted on the first try and he got his withholdings back without any issues.

This is really helpful advice! I just want to add that if your daughter is using online tax software and it keeps rejecting even after checking the dependent box, she might need to clear her browser cache or try a different browser. I had this issue last year where the software wasn't saving my selections properly. Also, some tax prep software has a specific "dependent filing" workflow that's separate from the regular filing process - it might be worth looking for that option if the regular path keeps causing problems.

I think you're onto something here. I noticed my GainsKeeper report was splitting some trades between the short-term and long-term sections of Schedule D when wash sales were involved, while TradeLog kept everything in short-term. Made the reports look totally different even though the bottom line was the same.

This actually makes so much sense now. The GainsKeeper report grouped trades differently than TradeLog which was causing the difference in how adjustments were applied on lines 4 and 5. When I look at the total net gain/loss on both reports, they're actually within $43 of each other across 220+ trades. Seems like they're both correct methodologically but just applying the wash sale adjustments at different points. I'm going to go with the GainsKeeper version since it matches my broker's 1099-B format more closely. Thanks everyone for the help!

This is such helpful advice! I'm new to dealing with wash sales and this whole thread has been incredibly educational. The point about keeping both reports for audit purposes is brilliant - I never would have thought of that. Quick question though - when you say "economically accurate," does that mean the IRS is more concerned with whether your total gain/loss reflects what actually happened rather than the exact method used to calculate basis adjustments? I'm still wrapping my head around how there can be multiple "correct" ways to report the same transactions. Also, @Natasha Orlova congratulations on getting it sorted out! Your situation sounds exactly like what I m'dealing with right now with different software giving me different line-by-line results but similar totals.

This is really helpful information about startup costs versus operational losses. I hadn't thought about the timing issue - since the equipment was destroyed before I could actually start servicing clients, does that change how I should categorize everything? I'm wondering if I should treat the equipment purchases as startup costs under Section 195 and then claim the destruction as a separate casualty loss, or if it's better to keep it all together as business losses on Schedule C. The timing aspect makes this even more confusing than I thought. Do you know if there's a specific IRS publication that covers this kind of situation where startup equipment is destroyed before business operations begin?

You're asking exactly the right questions about the timing issue. IRS Publication 535 (Business Expenses) covers startup costs, and Publication 547 covers casualties and losses, but the intersection of both can be tricky. Generally, if equipment was purchased with the intent to use in business but was destroyed before being placed in service, you might have options. You could potentially treat the initial purchase as startup costs under Section 195, then claim the destruction as a casualty loss. Alternatively, since the equipment never generated income and was destroyed before use, some tax professionals argue the entire amount could be treated as a startup loss in the year of destruction. The key factor is demonstrating business intent at the time of purchase. Your emails with the potential client, equipment research, office setup - all of this helps establish you were genuinely starting a business, not just looking for tax benefits from the 401k withdrawal. I'd really recommend consulting with a CPA who specializes in small business taxation for this specific situation. The interaction between startup costs, casualty losses, and early retirement withdrawals is complex enough that professional guidance would be worth the investment to get it right and minimize audit risk.

This is really comprehensive advice, thank you! I'm curious about the state-to-state move aspect you mentioned. Since I did move from Georgia to Colorado mid-year and that's apparently a qualifying life event, does that mean I should have been able to adjust my coverage without affecting the subsidy repayment? Or would it only help with avoiding penalties for changing plans? Also, the point about quarterly estimated taxes is something I wish I had known earlier. When I got the contract job, I was so focused on just getting back to work that I didn't think about the tax implications. Do you know if there's a specific threshold of income increase that triggers the need for quarterly payments? I'm definitely going to look into the IRA contribution option that @Arnav Bengali mentioned, since it sounds like that could still help reduce my MAGI for 2023 even though I ve'already filed and paid.

Great question about the state-to-state move! The qualifying life event primarily helps with being able to change or cancel your marketplace plan mid-year without waiting for open enrollment. However, it doesn't directly impact the subsidy repayment calculation - that's still based on your final annual income regardless of when changes occurred during the year. That said, the move might be relevant if you can demonstrate that your income projections were reasonable at the time you enrolled, especially since you were unemployed in Georgia and the job market/opportunities were different in Colorado. For quarterly estimated taxes, the general rule is you need to make payments if you expect to owe $1,000 or more in taxes when you file. Since contract work doesn't have automatic withholding, this often applies to anyone earning significant contractor income. The safe harbor rule is to pay either 90% of the current year's tax liability or 100% of last year's liability (110% if your prior year AGI was over $150,000). Definitely pursue that IRA contribution option - even if you've already filed and paid, you can file an amended return (Form 1040X) if the contribution brings you below the 400% FPL threshold. The deadline for 2023 IRA contributions is April 15, 2024, so you still have time!

This is exactly the kind of insight I wish I'd had when this first happened to me. You're absolutely right about double-checking the IRS calculations - I just assumed they were correct and paid without questioning anything. The point about Federal Poverty Level guidelines varying by location is something I hadn't even considered. Since I moved from Georgia to Colorado, there could definitely be differences in how that affects the 400% FPL threshold calculation. Do you know if there's an easy way to verify which FPL guidelines should apply when you've lived in multiple states during the tax year? I'm definitely going to pursue the IRA contribution route that others have mentioned. Even though I've already paid the $2700, if a $6500 IRA contribution for 2023 could bring me under the repayment cap, the potential refund would be substantial. It's frustrating that this system catches so many people off guard, especially those who are legitimately unemployed and trying to maintain health coverage. The whole process feels like it penalizes people for improving their financial situation mid-year.