What's the income limit for the Saver's Credit? I'm trying to figure out if I qualify for that since the EITC won't be affected by my IRA contributions.

For the 2024 tax year (filing in 2025), the Saver's Credit income limits are: - 50% credit: AGI up to $21,750 for single filers - 20% credit: AGI between $21,751-$23,750 for single filers - 10% credit: AGI between $23,751-$36,500 for single filers The credit is based on your first $2,000 of contributions to retirement accounts (IRA, 401k, etc.). So if you qualify for the 50% rate and contribute $2,000, you'd get a $1,000 tax credit. It's definitely worth looking into if you're already planning to make retirement contributions!

This is a really good point. I'm in Maryland and our state EITC is just a percentage of the federal one, so if the federal one doesn't change, neither does the state one. But I know some states calculate theirs differently.

But doesn't claiming a business loss increase your chance of getting audited? I've heard the IRS flags new businesses that report losses right away.

There's a common misconception about loss reporting. A business loss itself doesn't automatically trigger an audit, especially for the first year when startup costs often exceed revenue. The IRS expects many legitimate businesses to operate at a loss initially. What raises flags is when losses continue for multiple years or when the losses don't make sense for your business type. For a retail shop that just opened, having startup costs and initial inventory purchases that exceed one week of sales is completely reasonable and normal. Just make sure you're treating the business as a business - keep separate records, maintain proper documentation, and don't try to claim personal expenses as business deductions.

Is QuickBooks really worth the monthly cost for a tiny business though? Are there free alternatives that work for very small operations?

Do you know if there's any difference in how depreciation works for foreign vs. domestic properties? And would renovations/improvements to the property be depreciated differently?

The basic depreciation rules are the same for foreign and domestic properties - residential rental real estate is depreciated over 27.5 years using the straight-line method. The property's basis for depreciation is generally your cost plus certain closing costs, minus the value of the land (which can't be depreciated). For renovations and improvements, these are handled differently than regular repairs. Major improvements that add value or extend the useful life of the property are depreciated separately based on when they're placed in service. Smaller repairs are generally just expensed in the year they occur. This is true regardless of whether the property is foreign or domestic.

Do you use any specific apps or tools to track all this currency conversion stuff? I'm about to close on a place in Japan and I'm already dreading the accounting headaches.

Have you had any success with the fax number for ERC claim status inquiries? I tried it a few times but never got any response. Wondering if there's a trick to it or if it's just a black hole like everything else at the IRS these days.

I've had mixed results with the fax system. Out of about 15 status requests I've sent, I only received responses for 4 of them, and those took about 3 weeks to come back. The responses weren't very detailed either - just basic confirmation that the claim was "in process" with no estimated completion date. I've found that calling the IRS (when you can actually get through) gives better information, as agents can see notes in the system about where the claim is in the review process. Some practitioners in my network have reported better success by sending status inquiries through certified mail to the IRS service center where the original claim was filed, but even that's hit or miss.

Yes! I've seen this too. I think they're cracking down after all those sketchy ERC mills that were filing dubious claims. One thing that helped me was sending a detailed cover letter with each amended return that specifically outlines exactly which government orders restricted my client's operations and how those restrictions materially affected business operations. I basically create a roadmap for the IRS reviewer.

But the original poster isn't a rideshare driver - they're just commuting to work. Completely different tax situation. The IRS specifically says regular commuting isn't deductible.

You're right - I missed that they're just commuting. In that case, these expenses wouldn't be deductible. I was thinking about business use which is entirely different. Commuting is always considered personal use by the IRS, no matter how far your workplace is or how necessary your vehicle is to get there. The only exception would be if they have a qualifying home office as their primary place of business and are traveling to client sites.

Insurance settlements for personal vehicles usually aren't taxable unless you end up with a gain. Like if your car was worth $10k but somehow insurance paid you $12k, that $2k difference might be taxable. But it's rare for that to happen since cars usually lose value over time.