Thanks for bringing this up! I didn't even think about quarterly taxes. How do you calculate how much you need to pay each quarter? Is there a minimum threshold before you have to start doing that?

You generally need to pay quarterly estimated taxes if you expect to owe at least $1,000 in taxes for the year after subtracting withholdings and credits. The IRS has a "safe harbor" rule where you won't face penalties if you pay at least 90% of the current year's tax liability or 100% of the previous year's tax (110% if your AGI was over $150,000). For calculating the amount, you'd take your expected crypto income, combine it with any other self-employment income, then calculate the tax (including self-employment tax) and divide by four for each quarter. The deadlines are April 15, June 15, September 15, and January 15 of the following year.

Can you really deduct part of your phone bill? How would you even calculate what percentage is used for mining vs regular use? I'm using one of these apps too but it seems hard to document.

Do you use any specific software or method to track this? I'm trying to figure out the best way to separate everything while still filing on one Schedule C.

I use QuickBooks Self-Employed and set up different categories for the income streams. So all income gets tagged as either "Performance Revenue" or "Teaching Revenue" when it comes in. For expenses, I either assign them fully to one activity or split them by percentage if they benefit both parts of the business. It's fairly simple once you set it up. The important thing is consistency throughout the year. I used to try tracking everything in spreadsheets, but it became too time-consuming. Having a system that can generate reports showing the profitability of each activity separately while still maintaining one overall business has been incredibly helpful for both tax purposes and business decisions.

I've used FreeTaxUSA for my two related businesses (web design and digital marketing) and it handles it fine. You just list both activities in the business description field and then enter all income and expenses together. Way cheaper than TurboTax too.

Thanks for mentioning the form! Quick question - is it Form 8832 or did you mean something else? I've been looking online and Form 8832 seems to be related to business entity classification, not childcare expenses. Is there a different form number I should be asking my son's Montessori for?

You're absolutely right, I made a mistake with the form number. I meant to say that you should get documentation from the childcare provider, which is typically reported on Form 2441, not 8832. Most providers will give you a receipt or year-end statement with their tax ID (EIN) and the total amount you paid during the year. Some providers will complete Form W-10 (Dependent Care Provider's Identification and Certification) which gives you their official information for tax purposes. That's what you'll need when completing Form 2441 to claim the Child and Dependent Care Credit. Thanks for catching my error!

Yes! I successfully did this last year. The key is that you must have custody for more than half the nights of the year to claim the Dependent Care Credit, even if your ex claims the child as a dependent due to your agreement. I had to paper file though, because TurboTax kept giving me errors when I tried to enter it this way.

Thanks for explaining! So if I understand correctly, on my tax return I would indicate that I CANNOT be claimed as a dependent on someone else's return (since I provide more than half my own support), and then separately I'd try to claim my brother as my dependent if I meet all those tests you listed?

That's exactly right. You would check the box indicating that no one else can claim you as a dependent on their return. This is different from "claiming yourself as a dependent" which isn't a thing. Then separately, you would list your brother as your dependent if you meet all the qualifying relative tests. Make sure you have documentation showing you provided more than half his support - things like receipts for rent, utilities, food, clothing, medical expenses, etc. This is especially important since claiming siblings is something the IRS sometimes looks at more closely.

You're right! A sibling can be a qualifying child if they're under 19 (or 24 if a student), they lived with you for more than half the year, they didn't provide more than half of their own support, and they meet the other tests. The benefit of qualifying child vs. qualifying relative is that there's no income limit for a qualifying child. So even if OP's brother made more than $4,950, they might still be able to claim him as a dependent under the qualifying child rules.

Does the Opportunity Zone investment have to be made immediately after selling the software? Are there timing requirements like with a 1031 exchange? This sounds interesting.

You have 180 days from the date of sale to invest in a Qualified Opportunity Fund to defer the capital gains from your software sale. Unlike a 1031 exchange, you only need to invest the gain portion, not the entire proceeds. The key timing requirements are the 180-day investment window, and then the holding periods: hold for 5 years and you get a 10% reduction in the deferred gain; hold for 10+ years and any new appreciation on the opportunity zone investment itself becomes completely tax-free. This could be especially valuable if you're buying a vacation rental that you expect to appreciate significantly.

Did he use a qualified intermediary? I've heard that's essential for doing these exchanges properly.