Hey don't forget about potentially adjusting your retirement contributions too. My husband and I discovered that when we got married and started filing jointly, we could leverage our income difference to max out his 401k and IRAs differently than before. Ended up saving us about $4,200 in taxes while building retirement faster.

Great question about marriage and taxes! As others have mentioned, with your income split ($87k and $28k), you'll likely see a marriage bonus rather than a penalty when filing jointly. One thing I'd add - don't forget to consider the impact on any tax credits you might be eligible for. The Earned Income Tax Credit, Child and Dependent Care Credit, and education credits all have different income thresholds for married couples. Sometimes these can create unexpected benefits or phase-outs depending on your combined income. Also, since you mentioned buying a house next year, keep in mind that as a married couple you'll have a higher gift tax exclusion limit if family helps with the down payment, and you can potentially exclude up to $500k in capital gains if you ever sell a primary residence (vs $250k for singles). I'd definitely recommend running a tax projection for 2024 now that you're married to avoid any surprises. Most tax software lets you do this, or you could work with a tax professional to make sure you're optimizing everything for your new situation.

18 Does anyone know if this applies the same way for S corporations? I know S corps don't technically have E&P unless they were previously C corps, but I'm dealing with a converted entity that has accumulated E&P from its C corp days and did a §1031 exchange post-conversion.

This is a great discussion! I've been dealing with similar E&P confusion in my practice. One thing that helped me understand the §1031/E&P interaction was realizing that Congress intended E&P to reflect the corporation's actual economic capacity to make distributions to shareholders. Since a §1031 exchange doesn't generate any cash or other liquid assets (you're just swapping one property for another), there's no actual increase in the corporation's ability to pay dividends. The deferred gain represents potential future value, but not current distributable earnings. This is different from other types of gains that do increase current E&P because those transactions typically result in cash or other assets that could theoretically be distributed. The §1031 exchange keeps the corporation's economic position essentially unchanged from a liquidity standpoint, which is why E&P treatment follows the tax deferral rather than the book accounting recognition. I found Reg. §1.312-7 particularly helpful in understanding the specific E&P adjustments required for various types of property transactions if anyone wants to dive deeper into the regulations.

Have you guys considered alternating years for who claims your son? My bf and I do this with our daughter - I claim her on odd years and he claims her on even years. Our accountant suggested this as the fairest approach since we both contribute similar amounts to her expenses.

This is really helpful information everyone! I'm starting to see that the insurance split isn't the main issue - it's more about who provides the majority of support and how we can optimize our tax situation. @Paolo Longo - The Head of Household point is really important. I hadn't considered that aspect at all. Since I pay the mortgage and most utilities while my son's father covers groceries and some other expenses, I think I probably do pay more than half of the household costs. Combined with claiming our son as a dependent, that could mean significant tax savings with the HoH status. @Oliver Becker - Your approach of calculating the actual tax benefit difference and then sharing it makes a lot of sense. That seems much more fair than just alternating years without knowing the real impact. I think my next step is to sit down with my son's father and actually calculate out all our expenses and see who benefits more from claiming our son. The insurance coverage split should work fine as long as we're clear on the dependent claim. Thanks everyone!

Has anyone actually formed their LLC structure this way, with one disregarded LLC owning another? I'm curious how you handled the paperwork. When filing articles of organization for the second LLC, do you list the first LLC as the member, or do you still list yourself?

This is a great discussion! I've been considering a similar structure for my photography business and a separate e-commerce venture. One thing I wanted to add that hasn't been mentioned yet - make sure you keep meticulous separate records for each LLC even though they're both disregarded entities. The IRS may disregard them for tax purposes, but if you ever face an audit or legal challenge, you'll want crystal clear documentation showing that these are truly separate business activities. Keep separate bank accounts, separate bookkeeping, separate contracts - treat them as completely independent businesses operationally even if they're connected ownership-wise. Also, consider whether you might want to elect S-Corp status for either LLC down the road as your businesses grow. Having the separate entity structure already in place gives you more flexibility for tax planning in the future without having to restructure everything.

Has anyone had luck deducting part of their cell phone bill for delivery work? I use my phone constantly for the apps, GPS, customer communication etc.

Great question! Yes, you definitely should be tracking your mileage for 1099 delivery work - it's one of the biggest deductions you can take. Here's what I recommend: **For odometer readings:** You don't need to record it for every single trip, but do take photos of your odometer at the beginning and end of each work day, plus at the start/end of each year. This gives you solid documentation. **What to track for each delivery:** - Date and time - Starting point and destination - Miles driven (business purpose) - Total miles for the day **Pro tip:** Stop estimating immediately! The IRS can be strict about mileage deductions, and estimates won't hold up in an audit. Either use a mileage tracking app (like Stride, Everlance, or MileIQ) or keep a simple log in your car. You can choose between the standard mileage rate (67¢/mile for 2024) or actual vehicle expenses - the standard rate is usually better for delivery drivers and much simpler to track. Since you just started last month, you can still go back and reconstruct your mileage using your delivery app records, bank statements, and any receipts you have. Better to get organized now than scramble at tax time!