What kind of documentation did you need from your parent? My mom isn't great with paperwork and I'm worried about this exact situation.

I had my mom write a simple statement saying: "I confirm that [my name] provided over 50% of [brother's name]'s total support for the tax year, including [list specific things I paid for]." She signed and dated it, and I had it notarized just to be safe, though that might be overkill. The key was having her acknowledge that my contributions exceeded half of his total support. You could help your mom draft something similar - it doesn't need to be complicated. The IRS just wants confirmation from the person they live with that you're the primary financial supporter.

Yes, the value of lodging counts as support! The IRS considers the fair rental value of the home as part of the total support calculation. So if your dad provides free housing valued at say $1,000/month ($12,000/year), that counts as support from him.

Thanks for explaining that. Looks like I might not meet the 50% threshold then. The rental market where they live is really expensive, so even though I'm paying probably $15k annually for my sister's other expenses, the housing value might push my dad's contribution higher than mine.

Does FreeTaxUSA handle multiple state returns? I lived in two different states last year and had income in both. TurboTax charges extra for each state which gets expensive fast.

Yes, FreeTaxUSA can handle multiple state returns. You'll need to pay the state filing fee for each state, but it's still much cheaper than TurboTax. Each additional state is the same price as the first (around $15 each). Just complete your federal return first, then you'll have the option to add each state where you need to file. The system will guide you through allocating your income to each state and claiming the appropriate credits for taxes paid to other states. It's pretty straightforward, even with the complexity of multi-state returns.

I'm self-employed and switched to FreeTaxUSA last year. It handles Schedule C really well and doesn't charge extra for it like TurboTax does! All business expense categories are there, vehicle deductions, home office, everything. I saved about $120 compared to what TurboTax wanted to charge me.

How do you document these expenses for a teenager? My son doesn't exactly keep organized records and I'm worried about audit issues.

Start simple with a basic spreadsheet or even a dedicated notes app on their phone where they can log expenses right when they happen. Have them take photos of all receipts - this is actually easier for teens since they always have their phones. For things like mileage, there are free apps that can track business trips. Even basic documentation is better than nothing. The key is making it easy enough that they'll actually do it. This is actually a great opportunity to teach financial responsibility alongside tax compliance.

That's for unearned income (like dividends and interest) only. Form 8814 doesn't work for earned income like 1099-NEC. Your CPA gave you incorrect information.

My daughter just has her job income from working at the campus bookstore, no investments or anything fancy. But I'm curious - what counts as "unearned income" exactly? And does scholarship money factor into any of this tax stuff? She got a partial scholarship last year.

Unearned income includes things like interest, dividends, capital gains, rents, royalties, etc. - basically money received from sources other than working a job. It's passive income rather than earned income. As for scholarships, they're generally tax-free if used for qualified education expenses like tuition, fees, books, and required supplies. However, any scholarship money used for room and board, or other non-qualified expenses would be considered taxable income. But this would be considered earned income, not unearned income, so it wouldn't trigger the kiddie tax rules. It would just be added to her regular taxable income.

The federal rules for standard deduction for dependents are the same regardless of what state they're in. But for state taxes, it gets complicated. Some states may require your son to file a return as a part-year resident or non-resident of that state if he earned money there. Most states follow similar dependent rules as federal but there are exceptions. Check both your home state and his college state rules.

H&R Block absolutely does NOT offer free filing for self-employment anymore. I tried them this season and ended up with a $134 bill at the end - more expensive than TaxAct! They don't tell you about the fees until you've already spent hours entering all your information. Total waste of time.

That's actually not true - the threshold is $400 in net earnings, not $1,000. If you make more than $400 profit from self-employment, you are required to file Schedule C and pay self-employment tax. This is a common misconception.