This is important! My sister runs a home daycare and uses her SSN. Lot of smaller providers do this. You'd use their SSN in the same place on form 2441 where you'd normally put an EIN.

Extensions only give you more time to file though, not more time to pay if you owe. Just something to keep in mind. You should still estimate and pay what you think you'll owe by the regular deadline to avoid potential penalties and interest.

19 We actually implemented this structure last year. The key is ensuring the service business entity has genuine economic substance - real clients beyond your family, market-rate compensation, proper documentation, etc. The IRS will scrutinize transactions between related entities, so you need solid transfer pricing documentation for any inter-company services. We maintain separate boards with some overlapping and some independent directors to strengthen the case that these are truly separate businesses. The structure works well but requires significant compliance overhead.

5 That's really helpful insight. Did you encounter any unexpected challenges with the structure? I'm particularly concerned about whether this might trigger other tax complications we haven't considered yet.

18 We implemented a formal dividend policy that requires distributing at least 30% of annual net income unless the board specifically votes to retain additional earnings for documented business purposes. Our tax attorney suggested documenting the business justification for any retained earnings above that threshold in detailed board minutes. This approach has worked well for us because it creates a presumption that we're not hoarding cash without legitimate business needs. Our accountant said this kind of formal policy demonstrates good corporate governance and makes it easier to defend against potential AET challenges.

That's really helpful to know about Form 982! I think I might actually qualify for the insolvency exclusion because I was basically underwater on everything when this happened. Is the form complicated to fill out? Do I need to gather a lot of documentation to prove I was insolvent?

Form 982 isn't terribly complicated, but you do need to calculate your assets and liabilities at the time the debt was canceled to prove insolvency. Make a list of everything you owned (house, car, retirement accounts, checking/savings, etc.) and all your debts (mortgage, car loans, credit cards, student loans, etc.) at that specific time. You'll need to be able to document these values if you're audited, so gather bank statements, loan statements, property assessments, etc. from that period. Keep all this documentation with your tax records. If your total debts exceeded your assets, you can exclude the canceled debt from your income up to the amount you were insolvent.

Generally, creditors must issue a 1099-C in the year that they actually cancel the debt (not when you stop paying). Sometimes they hold charged-off debt for years before officially canceling it. They're required to issue the form by January 31 of the year following cancellation. For a 2018 charge-off, they might have actually canceled it in a later year or might still be holding it as an asset. Check your credit report - if the debt still shows as outstanding, they might not have officially canceled it yet. If it shows as "canceled" or "settled," then they should have issued a 1099-C.

Did changing your filing status to married filing jointly end up getting you a bigger refund? I got married last October and I'm trying to figure out if we should file separately or together.

In my case, filing jointly definitely resulted in a larger refund. We saved about $2,100 compared to what we would have paid filing separately. The benefits really depend on your specific income situations though. Generally, filing jointly benefits couples where one person earns significantly more than the other. If you both have similar incomes in higher tax brackets, sometimes filing separately works out better. Tax software can usually help you compare both scenarios to see which gives you the better outcome.

I filed on February 2nd last year and got my direct deposit exactly 9 days later. The IRS says 21 days is the standard, but direct deposits are usually much faster if you e-file and there are no issues with your return.

Wait, so even with our divorce agreement stating we each claim one kid per year, the IRS might still give both kids to whoever they lived with more? Our custody is 50/50 on paper, but they probably stayed with me slightly more nights because my ex travels for work sometimes.

The divorce agreement is a legal document between you and your ex, but the IRS follows their own rules when there's a dispute. So yes, if you had the kids more nights, the IRS might side with you and allow your claims - but that doesn't mean you're not violating your legal agreement with your ex. If you win with the IRS but your claim violates your divorce agreement, your ex can take you to family court for enforcement. The court could order you to pay your ex the difference in tax benefit or could find you in contempt. Some judges take these violations very seriously. That's why it's generally better to follow your agreement even if IRS rules might let you claim both children.

This is actually really good advice. Even if you and your ex don't get along, a direct conversation might avoid a much bigger problem. Courts don't look kindly on violations of divorce agreements, especially financial ones.