Do you need to get separate EINs for each business activity? I'm doing web design 1099 work but also selling digital products, and I'm not sure if I need two tax IDs or can use my SSN for both.

You don't need separate EINs for different business activities as a sole proprietor. You can use your SSN for both businesses on your Schedule Cs. Many sole proprietors don't have EINs at all and just use their SSN, though you can get an EIN if you prefer not to use your SSN for business purposes. If you did get an EIN for one business activity, you could still use your SSN for the other, or get separate EINs, but it's not required. The important part is keeping the income and expenses separate for accurate reporting on different Schedule Cs.

Is there any way to reduce the self-employment tax hit? It seems so much higher than when I was a W-2 employee.

Thanks for bringing that up! Does the self-employment tax apply even if my W2 job already has Social Security and Medicare taxes taken out? And how do you figure out how much to pay for those quarterly payments?

Yes, self-employment tax applies regardless of your W2 job's withholdings. Your W2 job only covers the taxes on that specific income, not on your self-employment income. The 15.3% consists of both the employer and employee portions of Social Security and Medicare taxes. For quarterly payments, you need to estimate your total tax liability for the year (including income tax and self-employment tax on your business profits) and make four equal payments. The tax software should provide you with estimated payment vouchers for the next year based on your current return. Alternatively, you can increase your W2 withholding to cover the additional tax instead of making separate quarterly payments.

I used Credit Karma last year for my small woodworking business. It worked ok for basic Schedule C but was missing some of the more detailed expense categories I needed. Switched to FreeTaxUSA this year and found it much more comprehensive for business stuff while still being affordable.

3 Does it matter if the house was going through probate during that time? My situation is similar but the property was in probate for 2 years before we got the inheritance officially. Would the stepped-up basis be from date of death or date when probate closed?

10 The stepped-up basis is almost always determined as of the date of death, regardless of when probate closes. So if your relative died 2 years ago, but probate just finished recently, the property's value for calculating your basis would still be what it was worth 2 years ago at the date of death. This can work in your favor or against you depending on the housing market in your area during that time. If property values went up during probate, you might owe taxes on that increase. If they went down, you might actually have a deductible loss.

14 Not OP but when we had a similar situation, getting that bank appraisal was super helpful for our taxes. The IRS never questioned anything because we had the official appraisal document. If your brother didn't get a mortgage, it might be worth splitting the cost of a formal appraisal between all siblings just for documentation.

Do you have to file the same status for both state and federal? Like if we file jointly for federal can we still file separately for state? This is so confusing!

Most states require you to use the same filing status that you use on your federal return. However, a few states have exceptions. In general, if you file jointly for federal, you'll need to file jointly for state as well. The confusion is understandable! Tax rules vary by state, which is why it's important to check your specific state's requirements. For example, in my case with California, we had to calculate both scenarios completely since the state calculations can differ significantly from federal ones, but we had to use the same status for both.

Wait, seriously? I had no idea about this rule. I was planning to have my wife itemize her business expenses while I take the standard deduction. This might change our whole strategy.

I disagree completely. The mortgage interest deduction is one of the few tax breaks that helps the middle class. Not everyone who itemizes is "rich" - in high cost areas like California or New York, even modest homes can cost $750k+. Taking this away would crush homeowners in those regions.

The data doesn't support that position. About 80% of taxpayers now take the standard deduction after the 2017 tax changes, meaning they get zero benefit from the mortgage interest deduction regardless of whether they're homeowners. The primary beneficiaries are households making over $200k. In high-cost areas, I'd support adjusting the cap based on local median home prices rather than having a flat national cap. But the current system primarily benefits the wealthy while doing very little to expand homeownership rates for middle-income families, which was supposedly its purpose.

Yes! This is so messed up. My neighbor is a doctor who works at a hospital (doesn't qualify for the deduction) but her husband is a lawyer who set up his own practice and gets the full 20% QBI deduction. They make similar incomes but he pays way less in taxes. Makes no sense.