That's super helpful. I never really thought about how much the standard mileage rate might add up to. We've been tracking every little receipt but maybe we're making it harder than it needs to be! Do you have a recommendation for a good mileage tracking app?

We use Stride, but there are tons of good ones like MileIQ, Everlance, or even Quickbooks Self-Employed. Most have free versions that work fine. The key is finding one that automatically detects drives so you don't forget to log them. Also make sure it lets you classify trips as business or personal, and export reports at tax time. Some even estimate your tax savings as you go which is really motivating!

Dash cams are deductible?! I bought a really nice one last year for $230 and didn't deduct it. Can I still claim that on this year's taxes or add it to last year somehow?

Do you withhold taxes from their paychecks or is there some exemption since they probably don't make enough to owe taxes anyway?

We do withhold federal income tax as normal, but they both typically get it all refunded when they file their returns since they earn under the standard deduction. For FICA taxes (Social Security and Medicare), there's an exemption for children under 18 working in a parent's business if it's a sole proprietorship or a partnership owned only by the parents. Since our restaurant is set up that way, we don't have to withhold FICA taxes from their wages, which saves everyone money. If your business is incorporated, different rules apply and you would need to withhold FICA.

There's no minimum age requirement in federal law for working in a parent's business (though state laws may vary). But what matters is whether the work and pay are reasonable. A 9-year-old stuffing envelopes occasionally should be paid what you'd pay any kid that age for that task - not an adult wage.

What exactly is this "materiality threshold"? Is that an official IRS thing or just something tax preparers talk about?

It's not an officially published number, but tax professionals recognize that the IRS has limited resources and doesn't pursue extremely small discrepancies. The IRS uses cost-benefit analysis in their enforcement efforts. They generally focus on issues where the potential tax recovery exceeds the administrative cost of pursuing it. Many tax pros consider amounts under $50 to be below the practical threshold for enforcement, though this isn't a guarantee. The IRS computer matching system might still flag it, but the likelihood of further action decreases with the dollar amount.

Good to know! Did they say anything about it affecting future audits or anything? That's what I'd be worried about.

That's such a good point I hadn't considered. My neighbor already feels so much shame about this situation that having someone make them feel worse would be terrible. Do you have any specific questions you'd recommend asking during consultations to gauge their communication style?

I'd suggest asking these questions during consultations: "Can you explain how you typically handle communication throughout a complex resolution case like this?" This reveals their process and how frequently they update clients. "What's your approach when working with clients who have limited English proficiency?" Their answer will show if they've dealt with similar situations and what accommodations they might offer. "How do you explain complex tax concepts to clients who aren't familiar with tax terminology?" This tests their ability to translate complicated ideas into plain language. Also, pay attention to how they react when hearing about the 15 years of unfiled returns. Do they seem judgmental or solution-focused? The right professional will skip the lecture and move straight to creating a plan. Trust your gut feeling about whether they seem patient and understanding.

This is incorrect information. The statute of limitations for assessment doesn't begin until a return is filed. For unfiled returns, the IRS can go back indefinitely. Please don't spread misinformation that could get people in serious trouble.

Thank you for bringing this up! Are there specific credits I should be looking out for that work differently with HoH versus MFS? I do have childcare expenses that I was hoping to claim.

The Child and Dependent Care Credit is a big one - you generally can't claim it when filing as Married Filing Separately, but you CAN claim it as Head of Household. This could be worth thousands if you're paying for childcare. Same with the Earned Income Tax Credit - you're not eligible with MFS status, but you are with HoH. The Education Credits (American Opportunity and Lifetime Learning) are also not available with MFS but are with HoH. These differences are exactly why it's so important for you to qualify for HoH status if possible. The tax benefits compared to MFS are substantial, especially as a single parent with childcare costs.

I used TurboTax last year in the same situation. There's a series of questions about your living situation that you need to answer. When it asks if you're married, say yes. Then when it asks if you lived apart from your spouse for the last 6 months of the year, say yes. Keep answering their questions about supporting your child and household, and it should eventually determine you're eligible for HoH. If you get stuck, use their live help feature - I had to do that to get through some confusing parts.