That's how all the tax brackets work though? Singles get phased out at lower amounts than married filing jointly. It's not unique to the child tax credit formula. Married couples filing jointly have a $400k threshold vs $200k for other filing statuses.

True, but the gap seems bigger for this credit than for other things. And considering single parents have all the responsibility with no support, you'd think they'd give us a break on the child tax credit formula at least. I just find it frustrating that two incomes totaling $390k can get the full credit while a single parent making $210k gets less help per child. The cost of raising kids doesn't magically go down just because there's only one parent in the household.

Unfortunately, the rule is that the child must be under 17 at the END of the tax year (December 31st) to qualify for the child tax credit. Since your daughter turned 17 in November 2024, she wouldn't qualify for the 2024 tax credit when you file in 2025. However, check if you qualify for the Credit for Other Dependents (worth up to $500) which has no age limit as long as she's your dependent.

Shoot I didn't even think about that! I was planning to go with Schwab. Does anyone know how long they typically take to process?

With Schwab, you're cutting it close but might still be okay. Last I checked, they can typically establish a solo 401k within 1-2 business days if all your paperwork is complete and accurate. I'd recommend calling them directly ASAP though - their customer service can tell you exactly what you need and might even be able to expedite the process if you explain the deadline situation. One important thing: make sure you have your EIN ready! If you don't already have an Employer Identification Number from the IRS for your business, you'll need that before opening a solo 401k. That's another process that could add time.

This is great information but I'm still a bit confused. So if I just get the paperwork submitted tonight, I'm good? And then I can actually fund it later? Does the solo 401k need to be with the same bank where I have my business checking account?

What about any earnings that might accrue between contribution and conversion? Like if the money sits in the traditional IRA for a few weeks and earns interest?

Great question! Any earnings that accrue between your contribution and conversion are actually taxable when converted. Your basis only covers your original contribution amount. For example, if you contribute $6,500 to your traditional IRA (your basis), and it earns $50 before you convert it, when you convert the full $6,550 to Roth, you'd owe income tax on that $50 of earnings. That's why many people do the conversion very quickly after the contribution - to minimize any taxable earnings in between steps.

You should probably file Form 8606X to amend previous years. The IRS can assess penalties for incorrect 8606 forms even if you didn't underpay your taxes.

Does this Section 382 stuff apply to all business types or just C-corps? I've got an S-corp with some losses and am thinking about bringing in a partner next year. Would that trigger these limitations?

Section 382 primarily applies to C corporations, not pass-through entities like S corporations where losses generally flow through to shareholders. However, S corporations that were previously C corporations and are carrying C corporation NOLs would still be subject to these limitations. For your S-corp situation, adding a partner wouldn't trigger Section 382, but it could affect how losses are allocated among shareholders. When ownership percentages change in an S-corp, it can affect the allocation of losses based on each shareholder's basis and the number of days in the tax year that each ownership percentage was in effect. Different rules apply, but you should definitely consult with a tax professional before adding that partner.

You're absolutely right. I appreciate all the advice here, but I think I do need professional help with this. Does anyone have recommendations for how to find a tax attorney who specifically specializes in business losses and NOLs? Is there a particular certification or background I should look for?

Look for a tax attorney who is also a CPA - that combination is powerful for complex business tax issues. I'd specifically ask potential attorneys about their experience with NOL monetization strategies and business restructuring for tax purposes. The best ones will typically have backgrounds working at either the IRS, major accounting firms in their business tax departments, or law firms with dedicated tax practices. You want someone who has actually handled similar situations, not just someone who understands the general tax code.

That's a great point! I hadn't even thought about state-specific incentives. I'm in Pennsylvania - do you know if they have similar programs or where I should look to find this information?

Pennsylvania actually has several programs! Check out the PA Department of Environmental Protection website - they offer rebates for energy efficient appliances and heating systems through their PA Home Energy Program. Also look at your utility company's website as many PA utilities offer additional rebates. The PA Housing Finance Agency also has some programs for new homeowners making improvements. The state-level stuff isn't on your tax return directly but comes as separate rebates or credits that can be substantial. Some municipalities in PA also have property tax reductions for certain improvements, so check your local government website too!

I used TurboTax last year after buying my first house. It asks about mortgage interest and property taxes really clearly, but for energy credits you have to specifically look for those sections - they don't always come up automatically in their interview process. I almost missed the credit for my energy efficient windows until I specifically searched for it. Make sure you have manufacturer certifications for any energy efficient improvements. TurboTax has a section for these credits but you need to know to look for them under "Credits & Deductions" and then "Home Energy Credits.