Thanks for the suggestion about FreeTaxUSA! Do they handle everything else TurboTax does? I'm already halfway through my return on TurboTax but maybe I should switch for next year. And is there any downside to skipping Form 1116 when the amount is under the threshold?

FreeTaxUSA handles all the same forms as TurboTax for federal filing at a fraction of the cost. Their interface isn't quite as polished but it gets the job done. Their deluxe version is only about $7 and includes priority support and audit assistance. State returns are extra though. There's no real downside to skipping Form 1116 when you're under the threshold. The only limitation is you can't carry forward unused foreign tax credits, but with just $3, that's not an issue for you. If your foreign investments grow significantly in future years, then you'll want to start using Form 1116.

Is Cash App Taxes actually reliable? I've heard mixed things. Anyone used it for investment stuff? Seems sketchy to trust a free app with complicated tax situations...

The standard mileage rate is definitely simpler, but it's often less advantageous financially, especially for expensive vehicles or those with high business use percentages. When you use actual expenses, you can deduct depreciation, insurance, repairs, gas, etc., which frequently totals more than the standard rate. Plus, if you ever claimed actual expenses and depreciation in the first year you used the vehicle for business, you're locked into the actual expense method for the life of that vehicle. You can't switch back and forth.

Yes, you will face depreciation recapture, but it's not as bad as you might think. The recapture is limited to the lesser of: 1) the gain on the sale, or 2) the total depreciation you claimed. In your case, if you sell for $38k with a depreciated basis of $15k, you have a $23k gain. This gain is treated as ordinary income to the extent of depreciation taken, which means you'll pay your regular income tax rate on that amount, not the lower capital gains rate. One strategy to consider is doing another like-kind exchange into a different business property (though vehicles no longer qualify for 1031 exchanges after the 2017 tax law changes), or timing the sale to coincide with a year when you have business losses to offset the recapture income.

Thanks for mentioning the mileage deduction! Do you know if I should be tracking mileage for all business-related driving? And what app do you use to track it?

Yes, you should absolutely track mileage for all business-related driving - going to client meetings, picking up supplies, driving to business meals, etc. Just remember that commuting to a regular workplace isn't deductible. I use MileIQ for tracking, but there are several good options like Everlance and Hurdlr too. Most of these apps automatically detect when you're driving and let you swipe to categorize trips as business or personal. Super simple and creates the documentation you need for tax time.

That receipt tip is gold! Do you just write directly on the physical receipt or do you scan it first and add notes digitally?

Have you actually managed to get through to the IRS this way recently? I tried calling that number three times last week and couldn't get past the automated system - it just disconnected me after saying they had too many calls.

I've gotten through in the past, but you're right that it's extremely difficult during peak tax season. Your best chance is to call right when they open (7am EST) and be prepared to navigate through several automated menus. Choose the option for "having a problem with your taxes" rather than "need forms" to increase your chances of reaching a person. I should have mentioned that this approach requires a lot of patience and might take multiple attempts. If time is crucial, some of the other options people have suggested might be faster.

The SSA site only shows your lifetime earnings record, not current year W2 details. That won't help with filing taxes for this year. You need the actual W2 or the IRS wage transcript.

Thank you for bringing this up! My divorce was finalized in May 2024 so I should be good for the 2025 filing. But that's definitely something important I didn't think about. Did the IRS charge you any penalties or just make you pay the difference?

They only made me pay the difference in taxes between HOH and Married Filing Separately, plus a small amount of interest since I paid after the filing deadline. No penalties since they determined it was an honest mistake rather than deliberate evasion. The IRS actually has a "considered unmarried" provision that might apply in some situations even if you're technically still married on December 31st, but my situation didn't qualify. If your spouse didn't live in your home for the last 6 months of the year, you might still qualify for HOH even if not technically divorced yet.

Absolutely right. The rules for "qualifying person" for HOH are really specific. For a child to qualify, they generally need to be your son, daughter, stepchild, foster child, brother, sister, or a descendant of one of these (like a grandchild or niece/nephew). Just having a child live with you isn't enough unless you're related by blood, marriage, or adoption in most cases.