Thank you for this insight! I hadn't considered the "local parent" angle. I'm definitely providing a large chunk of support (probably around 60% when you factor in housing, insurance, and day-to-day expenses), but we've always had her claim him since she's the biological mom. Do you know if there would be any downsides to changing this arrangement? Would she lose out on any tax benefits if she didn't claim him? We file separately since we're not married.

The main consideration would be comparing the total tax benefits each of you receive by claiming the child. For your girlfriend, not claiming the child could mean losing the Child Tax Credit (currently up to $2,000 per qualifying child), potential Head of Household filing status (if this is her only dependent), and possibly the Earned Income Credit if her income qualifies. For you, claiming the child would allow you to use your HSA for the child's medical expenses, potentially claim the Child Tax Credit yourself, and possibly file as Head of Household rather than Single. I'd recommend calculating both scenarios - one where she claims the child as usual, and another where you claim the child - to see which provides the better overall benefit for your household combined. Sometimes it makes sense to alternate years if the math works out better that way.

This is actually a really smart workaround. HSA rules focus on who pays the qualified medical expense, not where the money originally came from. If the person claiming the dependent is the one making the actual payment to the healthcare provider, it should comply with the rules.

I've heard you can deduct mileage for driving to job sites, but what if the work was at multiple houses in the same neighborhood? Do I track each trip separately or can I just estimate the total miles for all the jobs?

You need to track each trip separately for proper documentation. Keep a mileage log (there are free apps for this) showing the date, starting location, ending location, miles driven, and purpose of each trip. For multiple houses in the same neighborhood, each location is a separate job site. So if you drive from home to House A, then to House B, then back home, you'd record three legs: home to A, A to B, and B to home. The total mileage is deductible as long as each trip has a business purpose. Many people miss out on this valuable deduction because they don't keep good records, but it can really add up!

Your brother is giving you terrible advice that could get you in trouble. ALL income legally needs to be reported. The IRS has gotten much better at finding unreported income through bank deposit analysis and other means.

Wow, $475 is so much more reasonable! Do you have any tips for finding someone good at that price point? Did you just Google local accountants or was it word of mouth? I'm definitely going to shop around this year.

I found my accountant through a local small business networking group in my area. Word of mouth referrals are gold for finding good accountants at reasonable rates. Check if there's a Chamber of Commerce small business group or even Facebook groups for local business owners in your area - then ask for recommendations. When interviewing potential accountants, ask specifically about their experience with pet service businesses or similar industries. Mine already had several dog walkers and pet sitters as clients, so she knew exactly which deductions to look for. Also ask about their communication style and availability throughout the year, not just at tax time.

I tried that route first and missed a bunch of deductions. Ended up hiring a pro who saved me way more than his fee. Software is fine if your business is super simple but it doesn't replace experience.

That's a really good point about unemployment. Do you know if I need to do anything special for the state tax situation? Like should I be filling out any specific forms now, or is that just something I handle when filing next year?

For the state tax situation, you don't need to do anything special right now other than making sure your employer knows you're a Wisconsin resident. When they set up your payroll, they should withhold Colorado state taxes since that's where you're working. When tax filing time comes, you'll file a resident return for Wisconsin (reporting all your income from all states) and a non-resident return for Colorado (reporting only the income earned in Colorado). Wisconsin will give you a credit for taxes paid to Colorado to avoid double taxation. Each state has different forms for this, but any decent tax software will walk you through it.

Not OP but I've dealt with this. You can maintain residency in one state while working temporarily in another. Maybe OP still has their permanent address, driver's license, voter registration, etc. in Wisconsin but is working in Colorado for a limited time. Residency definitions vary by state, but usually involve where you intend to make your permanent home.

Thanks for the clear explanation! I'll let my brother know that for next year they should coordinate better. It was such a hassle last year with the paper filing. Do you know roughly how long the amended return takes to process before the mom could file? Just wondering about timeline since tax deadline is coming up.

The IRS is currently taking about 16-20 weeks to process amended returns. It's a much longer timeline than regular returns, unfortunately. Your brother's situation highlights why it's so important to coordinate within families. Given that the filing deadline is approaching, the parent might want to file an extension using Form 4868 to give extra time for the child's amended return to be processed. This extends the filing deadline (not the payment deadline if taxes are owed) for six months. The extension would give plenty of time for the amendment to be processed before the parent needs to file their complete return. Just remember that if the parent expects to owe taxes, they still need to pay the estimated amount by the original deadline even with an extension.

I used TurboTax last year to fix a similar dependent issue with my son. When you're in the "Personal" section, there's a question specifically asking "Can someone claim you as a dependent?" Make sure that's set correctly. For amending, you need to go to "Tax Tools" then select "Amend a return" option. It walks you through the changes step by step. The confusing part is that TurboTax sometimes phrases questions differently depending on which version you're using. The free version has less guidance than the paid versions. If you're stuck on a specific screen, I can try to help!

Thanks for the help! I found the section you mentioned. It was buried in a submenu I kept missing. The wording was definitely confusing - it asked something like "Did anyone provide more than half your support" which wasn't immediately obvious was about dependency. Their interface definitely needs work!