That's a really interesting point I hadn't considered. Do you think it's possible to switch from Section 179 to regular depreciation for assets where I've already started with Section 179 but have carryovers?

Unfortunately, once you've elected Section 179 for a specific asset, you generally can't switch to regular depreciation for that same asset in future years. The election is irrevocable for that property. However, for any new assets you place in service going forward, you can choose regular depreciation instead of Section 179. This might be a better strategy if your business income is consistently limited. You could do a hybrid approach where high-cost items get regular depreciation and only smaller purchases get Section 179 treatment.

The dollar limits aren't usually an issue for small businesses though. Most of us are hitting the business income limitation way before we reach the $1.16 million Section 179 limit lol. I wish I had that problem!

It's notable because with all the recent Fed changes, people were expecting the IRS rates to change too. The fact that they're keeping them stable suggests they believe the current economic conditions and inflation outlook are stable. For taxpayers who have payment plans or are dealing with back taxes, any change in these rates can significantly impact how much they end up paying over time. For example, I've been paying down a tax debt from 2022, and a 1% rate change would affect my total cost by hundreds of dollars.

That makes sense, thanks for explaining. I hadn't made the connection to the Fed rate changes. I guess it's good news for anyone with payment plans since the rate isn't going up. My friend has been paying off a pretty substantial tax bill from a few years ago, so I'll let him know the rate is holding steady. He's been worried about the possibility of increases making his payment plan more expensive.

Does setting up a payment plan affect your credit score? I might need to do this this year but I'm also trying to buy a house soon and don't want anything negative on my credit report.

What about using my Roth IRA for a first-time home purchase? I heard there's a special exemption? I'm 34 and have had my Roth for 6 years.

For first-time home purchases, you're in luck with that exemption! You can withdraw up to $10,000 of EARNINGS (not just contributions) from your Roth IRA without the 10% early withdrawal penalty for a first-time home purchase. And since you've had your Roth for more than 5 years, those earnings would actually be completely tax-free too. Remember, your contributions always come out first and are always tax-free regardless. The $10,000 exemption is specifically for the earnings portion, which would normally be taxable if you're under 59½. Since you've satisfied the 5-year rule and are using it for a qualifying first-time home purchase, you get the best of both worlds.

Omg yes. I did a backdoor Roth last year and got hit with a surprise tax bill because I didn't realize I had an old Traditional IRA from a previous job with like $3k in it. Made my entire conversion partially taxable because of that stupid pro-rata rule. Now I'm trying to reverse it somehow.

Does the QBI deduction apply if you're doing gig work like DoorDash? I'm confused about whether that counts as a "qualified" business.

Yes, gig work like DoorDash typically qualifies for the QBI deduction. Any income you report on Schedule C as self-employment income generally qualifies, with some exceptions for certain service businesses at higher income levels. The deduction is calculated as 20% of your net business income after expenses, so make sure you're tracking all your mileage and other business expenses to maximize your deduction. For most gig workers, this ends up being a significant tax savings without requiring any special business structure or additional paperwork.

Totally this! My accountant had me switch to an S-Corp once I hit about $80k in profit and I'm saving a ton on SE taxes. But for smaller businesses its probably not worth the extra hassle and fees.

How much documentation do you really need? I'm planning to hire my twins in our family store next year when they turn 13, but I don't want to drown in paperwork.

You need enough documentation to prove to the IRS that this is a legitimate working arrangement, not just a tax scheme. At minimum, you should have: 1. A written job description outlining specific duties appropriate for their age 2. A timesheet or log tracking when they worked and what tasks they completed 3. Regular payments (not just one lump sum at year end) deposited to their bank account 4. Photos or other evidence of them actually performing the work can be helpful too Keep it simple but consistent. Treat them like real employees. This doesn't require mountains of paperwork, but you do need to show this is a real job, not just moving money around for tax purposes.

Nope, there's no minimum age for a Roth IRA! The only requirement is having earned income. My daughter started contributing to her Roth IRA when she was 9 from money she earned modeling for a local children's clothing company. You'll need to open a custodial Roth IRA since they're a minor, but it's definitely allowed.