Can you still do Section 179 if you're showing a loss in your business? My side gig isn't profitable yet but I bought a lot of equipment.

That's an important point - Section 179 is limited to the amount of business income you have. If your business shows a loss or you don't have enough business income to cover the equipment cost, you can't fully use Section 179 in the current year. In your case, with a side gig that's not profitable, you might be better off using regular depreciation to spread the deduction over several years. That way you can use those deductions in future years when your business hopefully becomes profitable.

Is this still true? I thought they changed some rules around the hobby loss presumption recently.

Thanks for suggesting this. Do you know if taking out a loan would impact my credit score significantly? Mine's currently around 720 and I'm trying to save up for a house in the next year or two.

There would be a small initial dip when the lender does a hard credit pull, maybe 5-10 points. Then your score might drop a little more when the new account appears, reducing your average account age. However, if you make all payments on time, your score should recover within a few months and potentially go even higher as you demonstrate responsible payment history. The biggest risk to your score would be from missing payments on the loan, which would be much worse than the temporary dips from opening the account.

This is super important advice. I put off filing one year because I couldn't pay, and those failure-to-file penalties were brutal. Ended up owing way more than I would have if I'd just filed and set up a payment plan right away.

Would you mind explaining a bit more about those unexpected complications with California? I'm in a similar situation with a Delaware entity but live in California.

Sure thing. California takes the position that if you're a CA resident managing the holding company, they can tax the income and capital gains regardless of where the entity is formed. What happened in my case was that I had created a Delaware holding company owning several startup equity positions, but since I was making all investment decisions from California, the state considered it a California business. When I sold two of my positions for a significant gain, California required me to pay state tax on the entire gain, effectively ignoring the Delaware structure. I also had to deal with California's "doing business" fee since they deemed my holding company to be operating in California. The real surprise was that I still had to pay Delaware franchise tax while also being fully taxed by California - basically getting the downsides of both states without the expected benefits of Delaware.

That's actually a complicated area. You can use a Self-Directed IRA for certain equity investments, but there are prohibited transaction rules that can easily be violated with startup equity. If you're actively involved with any of the companies, it's especially problematic. Plus many equity compensation types like ISOs and NSOs can't be held in IRAs directly.

11 Is there a minimum amount of tax debt for an Offer in Compromise to be worth it? I owe about $6,500 which is a lot for me right now but not like tens of thousands.

16 There's no minimum amount required for an Offer in Compromise, but the process is intensive enough that it's usually pursued for larger debts. For $6,500, a payment plan might be simpler unless you have extreme financial hardship. The IRS looks at your ability to pay, income, expenses, and asset equity. They essentially ask: "Could we reasonably expect to collect more from you over time than what you're offering now?" If your financial situation is truly dire with no improvement in sight, it could be worthwhile even for smaller amounts.

3 Would it make sense to put like half on a credit card (the amount I could pay off in 2-3 months) and then get on a payment plan for the rest? My tax bill is around $4300 and I could probably handle about $2000 on my card.

Thanks for this info. Do you know if there's any time limit on when I need to start claiming the AMT credit? I paid this in 2022 and haven't done anything about it yet because I didn't understand I could recover any of it.

There's no time limit on when you can start claiming your AMT credit - it carries forward indefinitely until it's used up. So even though you paid in 2022, you can start claiming it on your next tax return and continue in future years until you recover the full amount. Just make sure you file Form 8801 "Credit for Prior Year Minimum Tax" with your tax return each year to claim the credit. If your income drops significantly after losing your job, you might actually be able to recover a larger portion of the credit than you expect in the coming tax year.

This is actually really smart advice. Tax planning before the end of the year can make a huge difference in AMT credit recovery. I'd suggest using one of those tax planning calculators to simulate different scenarios (like how many shares to sell this year vs next).