Do you know if this varies by state? I'm in Texas which doesn't have state income tax, but I'm curious if there's a comprehensive list somewhere of how different states handle this. I might move to Colorado next year.

Yes, it definitely varies by state. Texas has no state income tax as you mentioned, so you don't have to worry about it currently. For Colorado, they generally follow the federal treatment, but they do have some specific forms for retirement income. There's no single comprehensive list that I'm aware of, but most state tax department websites have sections on retirement account contributions. The safest approach when you move is to check Colorado's Department of Revenue website or call them directly. States like New York, California, and Massachusetts often have more distinctive rules that differ from federal treatment.

Good point! Also worth mentioning that employer matching contributions don't count toward the employee deferral limit of $20,500 (for 2022). Some people confuse the employee limit with the overall 415(c) limit which includes all contributions.

I don't think we ever made any special elections - we were always just a simple pass-through partnership. But that's a good thing to double-check. Is there a way to confirm what elections might be in effect for an EIN?

You can verify any tax elections by calling the IRS Business & Specialty Tax Line at 800-829-4933. When you get through, request your "entity control information" and they can tell you exactly how your LLC is classified and any elections that are in effect. For most simple LLCs that never filed anything special, you're probably fine. But if you or your accountant ever filed forms like 2553 (S-Corp election) or 8832 (entity classification election), you'll want to address those specifically. In my case, I had elected S-Corp status years earlier and forgot all about it!

Good point! Also check if you had any business credit cards, vendor accounts, or state tax accounts (like sales tax permits) that need to be closed separately. Those don't automatically close when you dissolve the LLC or close the EIN.

What about stuff I already bought last year? Can I still claim those expenses even if I don't have all the receipts anymore?

You can absolutely claim expenses from last year even without receipts, though having some documentation is always better. Bank or credit card statements showing the purchases can work as backup. The IRS doesn't require receipts for expenses under $75 (though it's still good practice to keep them). For bigger purchases like a computer or equipment, definitely try to find some proof of purchase. Remember you can only deduct the percentage used for business - so if your laptop is 60% for freelance work and 40% personal, you'd deduct 60% of the cost. Start keeping better records now for this year!

Yes! This is a common misunderstanding. You can file your own tax return AND still be claimed as a dependent on your parents' return if you meet the criteria (which includes them providing more than half your support). The key thing is that if you're claimed as a dependent, you can't claim your own personal exemption. But you still need to file your own return if you meet the income thresholds, which it sounds like you do.

That's really helpful advice! We do claim education credits each year. Would taking the capital loss deduction potentially mess with those benefits? What should I watch out for?

Generally, lowering your AGI with capital losses is actually beneficial for most education credits since many have income phaseout limits. The American Opportunity Credit starts phasing out at $80,000 for single filers and $160,000 for joint filers, while the Lifetime Learning Credit begins phasing out at $80,000 for single and $160,000 for joint filers. Capital losses that reduce your AGI could potentially help you stay under these thresholds if you're close to them. However, if your income is already low, you should ensure you have enough tax liability for non-refundable credits to be applied against. The AOTC is partially refundable, but the LLC is not refundable at all.

Question - does it matter which lots you sell if you bought the same stock multiple times? Do you have to sell everything or can you pick which purchases to sell?

Thanks for pointing this out! Actually a lot of my holdings would qualify for long-term capital gains rates since I've held most for 2+ years. I didn't realize the rate could be as low as 0-15% depending on income bracket. Is there a specific income threshold for each rate?

For 2025 tax year, long-term capital gains rates work like this: 0% rate applies if your taxable income is under $47,025 for single filers or $94,050 for married filing jointly. The 15% rate applies if your income is above that but below $518,900 for single or $583,750 for married filing jointly. Above those upper thresholds, it's 20%. These rates are much better than short-term gains, which are taxed as ordinary income and can go up to 37% depending on your tax bracket. Definitely worth considering when deciding when to sell!

How do you recommend documenting wallet ownership? I have like 5 different wallets across different platforms and hardware devices.