That's a really good point I hadn't considered. Do you know if there's any way to "make up" for those missed Social Security contributions? Or am I just permanently losing those quarters of coverage for retirement calculations?

When you file your back returns with Schedule SE for each year, you'll essentially be making up those Social Security and Medicare contributions (albeit with penalties and interest). The good news is that once you pay these taxes, those quarters will count toward your coverage for Social Security benefit calculations. There's no permanent loss of credit. The bad news is that self-employment tax is a significant amount (about 15.3% of your net earnings) on top of income tax. This often catches people by surprise when filing back returns. Make sure your tax professional looks for all legitimate business deductions on Schedule C to reduce your net profit, which in turn reduces your self-employment tax liability.

This is solid advice. I did exactly this when dealing with my unfiled returns. Filed the current year on time, then worked backwards. The revenue officer specifically mentioned this showed "good faith" and it seemed to help during negotiations. Also helped psychologically to feel like I wasn't continuing to dig the hole deeper.

Do you have to notify your brokerage which specific shares you want to sell before the sale, or can you do it afterward when filing taxes?

You need to specify which shares you want to sell at the time of the sale - you can't decide later when filing taxes. Most online brokerages have an option during the sell process where you can choose "Specific Identification" instead of FIFO (First In, First Out) or average cost. When you choose specific identification, you'll be able to select the exact lots (shares purchased on specific dates at specific prices) that you want to sell. This gives you maximum control over the tax implications of your sales and is essential for an effective homegrown dividend strategy.

For Roth IRAs, the withdrawal rules are a bit different. You can always withdraw your contributions (principal) tax and penalty free at any time. It's actually even simpler than with taxable accounts because you don't need to worry about specific identification of lots. The IRS considers withdrawals from Roth IRAs to come from contributions first, then conversions, then earnings. So you can just keep track of your total contributions over the years, and as long as your withdrawals don't exceed that amount, they're completely tax-free.

This sounds like a fantastic idea! Did you have any specific way you tracked everything? I'm worried about making it too complicated but love the real-world application.

Nothing fancy! We just use a simple chart on the refrigerator with magnets. Each kid has a section with their weekly "income" from chores, then two columns showing taxes collected and take-home pay. The family fund is a jar on the counter where the tax money goes. You definitely want to keep it simple - the point is just to visualize the concept, not create an accounting nightmare for yourself! My kids actually get excited on "budget day" when we decide how to spend the family fund. Sometimes they even vote to save it for something bigger. It's been a great lesson in collective decision-making too.

This is such a creative idea! Did you find that it made them more negative about taxes or did they see the benefits too?

What about wash sales? My 1099 has some adjustments in a column labeled with a "W" and I'm not sure what to do with those.

Wash sales happen when you sell a stock at a loss and then buy the same or a substantially identical stock within 30 days before or after the sale. When this happens, you can't immediately claim the loss for tax purposes. The "W" column on your 1099 indicates the amount of loss that was disallowed due to wash sale rules. The cost basis of your replacement shares is increased by this amount, which means you'll eventually get the tax benefit of that loss when you finally sell the replacement shares (assuming you don't trigger another wash sale). When entering this information into tax software, make sure you include the wash sale adjustment exactly as shown on your 1099. Most tax programs have specific fields for this. If you have multiple wash sales, it can get complicated quickly, which is why some people use specialized tax software or services for investment income.

Do you have to report every single transaction or can you just report the summary totals? I made like 50 trades last year and don't want to enter them all individually.

Do I need to keep physical receipts for all the supplies I buy or are digital records okay? My CPA is pretty old school and I'm not sure what's actually required.

Digital records are perfectly acceptable for the IRS! I take pictures of all my receipts with my phone and organize them by month in Google Drive. Many CPAs now prefer digital because it's easier to search and organize. That said, if your CPA prefers physical copies, you might want to print them out just to make the process smoother on their end. But legally speaking, digital receipts have the same validity as paper ones as long as they clearly show the date, vendor, amount, and what was purchased.

Be careful with home office deductions though. You need a space used EXCLUSIVELY for business, not just your kitchen table where you also eat dinner. That's where a lot of people get in trouble.