You make a good point about the psychological aspect. I hadn't considered that angle before. But regarding business expenses - couldn't those be handled separately from personal taxation? Like keep business deductions but simplify personal taxes? And for charitable giving, I wonder if people would still donate without the tax incentive...

That's a really interesting question about separating business and personal tax structures. It could work in theory, but then you'd still need a complex system for business taxation. Most economists think there should be symmetry between personal and business tax structures to prevent gaming the system. As for charitable giving, studies have shown that tax incentives do influence donation behavior significantly. While people would still give to causes they care about, the research suggests overall giving would decrease by 25-40% if the deduction was eliminated. This would hit smaller local charities the hardest since they rely more on middle-class donors who are more tax-sensitive.

A well-designed flat tax would still have a basic exemption amount. So maybe the first $25,000 or $30,000 isn't taxed at all, then everything above that is taxed at a single rate like 15% or 20%. That would protect low-income earners while simplifying the rest of the system.

Moving to a different state doesn't change how you report health insurance on your federal taxes. The requirement for qualifying health coverage is federal, not state-specific. The only potential complication would be if you moved to or from a state that has its own individual mandate (like California, Massachusetts, New Jersey, Rhode Island, or DC). Those states might require additional reporting on your state tax return, but it doesn't affect your federal return. As long as you maintained continuous coverage during your move, you're all set for federal tax purposes.

You don't need to worry! When you file jointly, you're just verifying that everyone in your household had coverage. Your wife doesn't need to report you dropping off her plan. The 1095 forms you each receive will show the coverage periods for each person, and as long as you both had continuous coverage (even if through different plans at different times), you're good to go!

What about Medicare premiums? I'm retired but also have some self-employment income from consulting. Are those deductible too? TurboTax never seems to ask me about this.

Medicare premiums (Parts B and D) are indeed deductible as part of the self-employed health insurance deduction if you have self-employment income! This is a commonly missed deduction. The key is that you can only deduct premiums up to the amount of your net self-employment income. If you're using TurboTax, you'll need to look in the self-employment section and find where you enter your health insurance. There should be an option to include Medicare premiums there. If your consulting income is reasonably substantial, this could be a significant tax savings for you.

I used IRS Free File through one of their partners last year and it was actually pretty straightforward about insurance premiums. It specifically asked about self-employed health insurance in a separate section and had clear explanations. Much more direct than the commercial versions where they hide things in weird places.

Does that UBTI issue affect me if I'm just holding these in my regular Robinhood account? Not in an IRA or anything. Still learning all this stuff.

No, UBTI is only an issue in tax-advantaged accounts like IRAs or 401ks. In a regular taxable Robinhood account, you just have to deal with the complexity of the K-1 reporting, but there's no extra UBTI tax. The main disadvantage in a regular account is just the administrative hassle and possibly having to file multiple state tax returns if the MLP operates across different states. Plus, the tax treatment of MLP distributions is different from regular dividends - they're often partly tax-deferred as "return of capital" which lowers your cost basis instead of being immediately taxable.

Is there a minimum amount before you need to file in those states? I can't imagine filing in 12 states for a small investment would be worth it.

Thanks for bringing that up about her student aid. She did get some grants, but they all went directly to tuition and books, so I think those are tax-free? She doesn't have any loans. About claiming both her and her son - that's good to know. If I had to choose, would it be more beneficial to claim her or him for tax purposes?

Grants that went directly to qualified educational expenses like tuition and required books are generally not taxable, so you're probably right that she doesn't need to file if that was her only income beyond the child support (which isn't taxable to the recipient). As for whether to claim her or her son, it usually makes more financial sense to claim the child if you have to choose. A qualifying child can potentially make you eligible for credits like the Child Tax Credit (worth up to $2,000 per qualifying child) and potentially the Earned Income Credit if your income falls in the eligible range. These are typically worth more than the standard dependent deduction you'd get for claiming your girlfriend.

100% this! I work at a tax prep office and the #1 issue we see with dependent claims is lack of documentation. Keep receipts for major purchases, rent payments, utilities, etc. If you're audited, you'll need to prove you provided over half of the child's total support.