I hadn't even thought about the filing status aspect. Would I qualify as Head of Household if I'm claiming my girlfriend as a dependent? Or does it only work if I claim her son?

You can only qualify as Head of Household if you're claiming the child as your dependent, not your girlfriend. The IRS considers girlfriends/boyfriends as "unrelated" dependents, which doesn't satisfy the Head of Household requirements. If you can claim her son as your dependent, then you could file as Head of Household, which would give you a higher standard deduction ($20,800 for 2024 vs $14,600 for single filers) and better tax brackets. It's definitely worth figuring out if you can claim the child, as the tax benefits go beyond just the dependent credit.

I went through this exact situation 2 years ago. Make sure you have documentation showing the child lived with you - school records showing your address, medical records, even dated photos of the child at your home throughout the year can help. The IRS mainly cares about where the child actually lived for the majority of nights in the year.

Thanks for sharing your experience! Do you think it makes sense to form an S-corp right away when switching from single-member LLC to having employees? Or should I stay as an LLC taxed as a partnership first until I hit that $40-50k profit consistently?

I'd recommend staying as an LLC taxed as a partnership first until you're consistently hitting that profit threshold. You can always convert to an S-corp later, and it's much easier than going the other direction. The LLC with employees will still give you the liability protection you need, but with less administrative overhead. One thing I forgot to mention - with an S-corp, you must pay yourself a "reasonable salary" before taking distributions. The IRS watches this closely. For construction contractors, that's typically 60-70% of your profit as salary at minimum. So if your profits are tight or inconsistent, the S-corp advantages diminish since most of your income will need to be salary anyway.

This is so true. I undercharged for years and was always broke. When I finally raised my rates by 25%, I lost maybe 10% of clients but made WAY more money overall. And the clients I kept were the ones who respected my work and didn't nickel and dime me to death.

Thank you for bringing this up! I didn't even think about potential processing conflicts. Do you know approximately how long I should wait after receiving my federal refund before submitting the amendment? Is immediately okay or should I give it some additional time?

You can file your amendment as soon as your refund hits your account, as that's generally a good indicator that your return has been fully processed. There's no need to wait any additional time beyond that. Just make sure you're paying any additional tax you owe with the amendment to avoid or minimize interest charges, as interest starts accruing from the original due date of the return (usually April 15th) regardless of when you file the amendment.

I learned this the hard way last year! Forgot a 1099-NEC from some freelance work and ended up owing interest and a small penalty because I waited like 3 months to fix it. Pay what you think you'll owe when you send in the amendment even if you're not 100% sure of the exact amount.

Wait I thought the self employment tax deduction was eliminated in the tax law changes? My cousin who does taxes told me that was gone now.

Your cousin is incorrect. The deduction for half of your self-employment tax is still very much available and was NOT eliminated in any recent tax law changes. This is different from some itemized deductions that were changed or limited. The self-employment tax deduction is an "adjustment to income" (sometimes called an "above-the-line deduction"), not an itemized deduction, so it remains unaffected. You calculate it on Schedule SE, and it flows to Schedule 1, then to your Form 1040. It's definitely worth claiming as it can save you hundreds of dollars!

I found FreeTaxUSA much better and waaaaay cheaper. They handle Schedule C just fine in their regular version and it only cost me $15 for state filing (federal was free). TurboTax wanted like $180 total for my return with self-employment income.

Thanks for the suggestion! I didn't know FreeTaxUSA could handle self-employment stuff. $15 is a lot better than the $180 TurboTax quoted me. Did it walk you through all the self-employment deductions and stuff? I'm definitely going to check that out instead. I was dreading paying the TurboTax premium just because I have some side hustle income.

Would it make more sense for my grandmother to claim it instead since she's the one who actually paid? Or is that not even an option since the form is in my name?

Since the 1095-T is in your name, your grandmother cannot claim the education credits, even though she paid. The IRS ties these benefits to whose name is on the form and their dependent status. The only way your grandmother could claim education benefits would be if you were her dependent, which you've said you're not. This is actually beneficial for you, since as a student with likely lower income, you'll probably get more value from the credit than she would.

Omg you're right! I just double-checked and it's a 1098-T form. I feel so stupid mixing those up. Does this change any of the advice people have given?