That's a really good point I hadn't considered. My original EIN was for a sole proprietorship and I'm planning to keep the same structure for the bakery. Does that mean I should be good to go with just updating the business activity?

Yes, if you're keeping the same business structure (sole proprietorship in your case), you can definitely use the same EIN. You just need to update the IRS about your change in business activity using Form 8822-B. It's only when you change your business structure (like going from sole prop to LLC, partnership to corporation, etc.) that you'd need a new EIN. Since you're keeping the same structure but changing the activity, your current EIN is perfectly fine to use.

This is super important! In my state, certain home-prepared foods are actually tax exempt while others are taxable. Worth checking with your state dept of revenue.

I hadn't even thought about the state tax implications! Do you know if all states have these non-resident taxes on property sales, or does it vary by state? The property is in Missouri, and I live in Colorado if that helps.

It definitely varies by state. Missouri does have a requirement for non-resident withholding on real estate sales. They generally require 2% of the sale price to be withheld, but the exact requirements depend on your specific situation. You'll want to look into Form MO-2NR (Statement of Income Tax Paid) which the buyer may need to complete. However, if your sale qualifies for certain exemptions, you might avoid the withholding. Missouri has specific rules about when withholding is required for non-residents. After the year ends, you'll need to file a Missouri non-resident state tax return to report the gain and potentially get a refund of any excess withholding. The good news is that Colorado will generally give you a credit for taxes paid to Missouri to avoid double taxation.

A 1031 exchange wouldn't work well here. Those are for investment or business property, and inherited land that's being partially sold to family doesn't typically qualify. Plus, 1031 exchanges have strict timing requirements (45 days to identify replacement property, 180 days to close) and require a qualified intermediary to hold funds. Doesn't sound like what OP needs.

Does this mean it's not worth contributing to retirement accounts if you have a low tax liability? Like if I'm only going to owe $200 in taxes anyway?

It's absolutely still worth contributing to retirement accounts even with a low tax liability! While you might not get the full benefit of the Saver's Credit, you're still building your retirement savings, which is the primary benefit. Contributing to retirement accounts has multiple tax advantages beyond just the Saver's Credit. With traditional accounts, you're reducing your taxable income, and with Roth accounts, you're getting tax-free growth and withdrawals in retirement. These long-term benefits typically far outweigh the limitations of the credit.

The Saver's Credit and Child Tax Credit are completely separate and don't directly affect each other's calculations. You can claim both! The only "interaction" is that claiming the Child Tax Credit might reduce your tax liability, which could limit how much of the Saver's Credit you can use (since it's non-refundable). With $44k income as head of household with 2 kids, you should qualify for the 10% or 20% tier of the Saver's Credit depending on the exact AGI breakpoints for 2025. Just make sure you're contributing enough to retirement accounts to maximize the credit!

Thanks for explaining! I had about $3,000 in tax liability after all deductions but before credits, and the Child Tax Credit reduced it by $2,000. So I guess I only had $1,000 left that could be offset by the Saver's Credit. Makes sense now why I didn't get the full amount I calculated.

This explanation makes a lot of sense! I think I missed something when entering the W2s. Do you know specifically where in 1040.com I would indicate they're from the same employer? I've looked through all the options and can't find anything like that.

In 1040.com, after entering your first W-2, there should be an option like "Add another W-2 from this employer" when you go to add the second one. If you don't see this option, try contacting their support directly as the interface might vary by year. Alternatively, when entering the second W-2, there might be a checkbox or dropdown where you can select "Same employer, different state" or something similar. If you still can't find it, you might consider switching to different software that better handles multi-state taxation. H&R Block and TurboTax definitely have clear options for this specific situation.

Cash App Taxes is awful for multi-state situations in my experience. I tried using it last year for a similar situation and it completely messed up my state returns. It kept double-counting income and there was no clear way to indicate same employer/different states. I ended up switching to FreeTaxUSA which handled it perfectly and was still pretty cheap.

But does TurboTax help with tracking the losses properly? I'm always confused about what documentation I need to keep, especially for smaller amounts where the casino doesn't issue any forms.

TurboTax has a good section that explains what documentation you need to keep, but it doesn't actually help you create or maintain the gambling log itself. You still need to track all your sessions with dates, locations, game types, and amounts won/lost. For the smaller amounts without forms, the guidance is clear that you should still report all winnings as income and track all losses that you want to deduct. They recommend keeping all betting tickets, receipts, bank records showing casino withdrawals, and statements from player's club cards. The software is helpful for the actual tax filing part, but the record-keeping is still on you throughout the year.

Oh, I didn't think to check that. I did hit one slot jackpot that was over $1,200 and they did paperwork before paying me. I need to find that form to see if they withheld anything. Does that withholding count like a regular paycheck withholding toward my total tax bill?

Yes! Any taxes withheld from your gambling winnings shown on a W-2G form count exactly like regular paycheck withholding toward your total tax bill. It's treated as if you've already paid that portion of your taxes for the year. This is especially important with larger jackpots because it helps you avoid underpayment penalties that might otherwise apply if you suddenly have a big chunk of income with no withholding. Make sure you find all your W-2G forms and report them correctly. The IRS automatically gets copies of these forms from the casino, so they'll know if you miss reporting one. The form will have your winnings amount in Box 1 and any federal tax withheld in Box 4.