That's really interesting! I am working full-time while managing her care. Would the aide that Medicaid provides qualify for this credit? Or would it only be additional care I pay for out of pocket? I do sometimes hire additional evening help when the Medicaid aide isn't there.

Only the care expenses that you pay for out of pocket would qualify, not the portion covered by Medicaid. The evening help you mentioned would definitely count as long as you need that care so you can work. There are some specific requirements - you'll need the care provider's tax ID or Social Security number, and you'll have to file Form 2441 with your return. The credit is calculated based on your income and has a maximum amount of qualifying expenses ($3,000 for one qualifying person in 2023). It's a non-refundable credit, so it can reduce your tax to zero but won't generate a refund beyond that.

This is huge. My mother-in-law was in memory care last year and we were able to deduct about 60% of the facility costs as medical expenses based on documentation from the facility. Made a big difference on our taxes.

2 Do you have to have separate tax exemption forms for each school or can the district provide one form that covers all their schools? I'm looking at working with a district with 15+ schools and don't want to chase down individual paperwork from each one.

10 Most school districts can provide a single tax exemption certificate that covers all schools within their district. You'll want to contact the district's business office or accounting department rather than individual schools. They typically have a standardized process for vendors. Private schools are different - each one operates independently and you'll need separate documentation for each. Also, be aware that in some states, only certain categories of purchases by schools are tax-exempt (like instructional materials), while others might be taxable. Your state's department of revenue website should have specific guidance for educational sales.

14 Smart advice! What percentage discount do you typically offer to teachers vs. schools as organizations? I'm trying to figure out a structure that's attractive enough but doesn't kill my margins.

Thank you for bringing this up! I hadn't even considered the multi-state aspect. We are planning to do some promo events in neighboring states. Do you know if there's a minimum value threshold before you have to worry about filing in another state? Like if we only give away 20-30 hats in a different state, is it even worth tracking?

Most states do have minimum thresholds before you're required to file, but they vary quite a bit. For example, California has a $500 threshold for use tax reporting for businesses, while some other states might be higher or lower. Even if you're under the threshold, technically you still owe the tax, but the filing requirements may not kick in until you hit that minimum. I always recommend tracking everything regardless, because if you continue doing events in the same state, you might exceed the threshold over time. Better to have the data and not need it than try to reconstruct it later!

Not OP but I use Shopify for my merch business and their tax handling is actually pretty decent for the standard stuff. They have automatic tax calculation for regular sales, but they don't handle promotional items specially. You still need to manage that part manually or with additional tools.

Wait really? I didn't know they report to the IRS! Most of my payments come through PayPal and Venmo. Does that mean the IRS already knows about this income even if I haven't reported it yet?

Yes, this is a relatively recent change that's been fully implemented. If you received more than $600 total in payments for goods or services through these platforms in 2024, they'll issue a 1099-K that goes to both you and the IRS for your 2025 filing. The IRS will be able to see that you received these payments, though they won't know specifically what you sold. This is exactly why it's important to properly report the income on your Schedule C rather than ignoring it - the information is already being reported to the IRS through these third-party payment processors.

Your business deductions are completely separate from your dependent status. Even if your parents claim you as a dependent, you still file your own Schedule C for your business income and take all applicable business deductions yourself. Your parents claiming you as a dependent mainly affects personal exemptions and credits - it has no impact on how you report your business income and expenses. So you absolutely can (and should) take all legitimate business deductions on your Schedule C regardless of dependent status.

You make some really good points about the time value and peace of mind. I just timed myself trying to figure out just the home office deduction rules last night and it was a solid 2 hours of research and I'm still confused. At that rate I'd probably spend 20+ hours figuring everything out myself.

That's exactly why I recommended the professional route for this year! The home office deduction alone has so many nuances - like if you're teaching piano in that space, you need to track the hours used for business versus personal use, and calculate the percentage of your home's square footage. When you multiply that complexity across multiple businesses, contractor payments, and mortgage interest considerations, those 20+ hours could easily become 30-40 hours. Plus, a good tax professional won't just complete your forms - they should be explaining the process so you can learn for future years.

If you're worried you did something wrong, you can always file an amended return! I messed up my deductions last year and filed a 1040X to fix it. Not super complicated but def easier to get it right the first time.