That's a really smart idea! Do you make the transfers manually or have you set up some kind of automation? I'm worried I'll forget if I have to do it myself every time.

I started out making manual transfers, but that got annoying real quick. Now I have automatic transfers set up through my bank. Most payment platforms like PayPal and Stripe let you split incoming payments automatically. I have mine set to send 30% directly to my "tax" account and 70% to my regular account. If your platform doesn't offer split payments, see if your bank has automation features. Many banks now let you create rules like "when a deposit comes in from YouTube, transfer 30% to savings." Makes it totally hands-off which is perfect for absent-minded people like me!

I've had good luck with FreeTaxUSA for my content creation business. It handles Schedule C well and costs way less than TurboTax. Just make sure you track all your expenses throughout the year - that's the part most new creators mess up.

What happens if you accidentally go over the contribution limit? I think I might have done that this year with my job change...

If you go over the contribution limit, you'll need to withdraw the excess contribution before your tax filing deadline (including extensions) to avoid a 6% excise tax penalty. The withdrawal process is called an "excess contribution removal." You'll need to contact your HSA provider to request this removal. When you withdraw the excess, you'll also need to withdraw any earnings associated with that excess contribution, and those earnings will be taxable income in the year you withdraw them. Your HSA provider should be able to calculate the attributable earnings for you. Make sure you specifically tell them it's an excess contribution removal, not just a regular distribution.

I've used both. Honestly they're pretty similar for HSAs. The investment growth itself doesn't change how you report anything - it just means your year-end value is higher than your contributions. Either software handles that fine because all they're doing is putting the numbers on Form 8889.

I switched from TurboTax to FreeTaxUSA this year and they handled my HSA perfectly fine - and saved me like $60. The HSA section asks all the same questions TurboTax did, including year-end value.

I heard about someone trying to deduct their wedding because they invited business clients! Did any of those crazy deductions actually work? Asking for a friend...

None of the truly outrageous ones work! The IRS isn't stupid, though my brother-in-law says he's occasionally surprised by legitimate deductions people don't know about. The wedding one is actually interesting - if you can prove certain clients were invited specifically for business purposes, a PORTION might be deductible as a business entertainment expense. But the entire wedding? Absolutely not. Some people try to claim their entire basement as a home office when they just have a desk in the corner - that's asking for an audit!

I'm convinced the IRS intentionally makes the forms confusing so we mess up and they can charge penalties. Has anyone tried those free filing programs? Are they actually helpful or just as confusing?

Does the first person to file always win? I heard that the IRS just automatically accepts whoever files first and then the second person is stuck fighting for it.

No, the first person to file doesn't automatically "win" - they just get their refund processed first. The IRS doesn't know there's a conflict until the second person tries to claim the same dependent with the same Social Security number. When the second return comes in claiming the same dependent, it gets flagged for review. The IRS will apply their tiebreaker rules (which favor the parent the child lives with most of the time) and may request documentation from both parties. It's just that the second filer will likely need to paper file and wait longer for their refund while this gets sorted out. The rightful claimant will eventually get the tax benefits they're entitled to, regardless of who filed first.

I don't think there's a way to "reserve" your dependent before filing. The IRS doesn't have a pre-filing verification system for dependents that I know of. Your best bet is to file electronically as early as possible and make sure you have documentation ready if there's a dispute.

Thanks for clearing that up! I must have misunderstood what someone told me. Sounds like I should just focus on filing early with good documentation instead.

Could you explain a bit more about the difference between employee and employer contributions when it's just me? I'm a bit confused about how I can be both when I'm a sole proprietor.

When you're self-employed, you act as both the employee and the employer for retirement contribution purposes, even though it's just you. As the "employee," you can contribute up to $22,500 for 2023 (or $30,000 if you're over 50) from your compensation. As the "employer," you can also make an additional profit-sharing contribution of up to 25% of your net self-employment income (after deducting both business expenses and half of your self-employment tax). This dual contribution ability is what makes Solo 401ks so powerful for self-employed individuals - you can potentially put away much more than with other retirement options like SEP IRAs.

I've used both. SEP IRAs are definitely simpler to set up, but Solo 401ks usually let you contribute more overall. Neither one reduces self-employment tax though. The main advantage of a Solo 401k is you can make both employer and employee contributions, while SEP IRAs only allow employer contributions.