Thanks for this warning! This is making me rethink our plan. Maybe instead of claiming 100%, we should just track the mileage super carefully and go with the actual percentage. I definitely don't want to deal with an audit. Do you know if we need to keep paper logs or if the delivery apps' records are enough proof?

The delivery apps aren't enough for the IRS if you get audited. You need a detailed mileage log showing starting and ending odometer readings for each delivery shift, dates, and business purpose. There are some good apps like MileIQ or Stride that make it easier. Also don't forget you can deduct more than just the car itself! Hot bags, phone mounts, portion of phone bill, extra car chargers - all that stuff is 100% deductible separately from your vehicle expenses. I even deduct part of my Spotify since I play music during deliveries lol.

That's somewhat misleading. Most food delivery people aren't driving vehicles over 6000 lbs - that's like a large SUV or truck. For regular cars, the Section 179 deduction is capped MUCH lower - around $19,200 for 2024 I believe. And remember you can't claim more in deductions than you earn from your delivery work!

You're right - I should have been clearer about the weight limitations. For most standard cars used for food delivery, there are lower caps on Section 179. For 2024, passenger vehicles are limited to around $19,200 for the first year if they weigh less than 6,000 lbs. And you made another great point - your total deductions can't exceed your business income, so if you're just starting out in delivery, you might not have enough income to take advantage of the full deduction in year one. Any unused portion can be carried forward to future years though!

Thanks for sharing your experience! Did you also report the fellowship stipend as "Other Income" like someone suggested above? And did you need to provide any additional documentation with your tax return?

Yes, we reported it as "Other Income" on Schedule 1 and labeled it as "Research Fellowship Stipend" in the description. This is the correct way to report it. We didn't need to attach any additional documentation to the tax return itself, but we did keep the letter from the university in our records in case of any questions. Most universities that regularly deal with international students and researchers have standard language they use for these letters that clearly explain the fellowship is not an employment relationship. Your husband should be able to request this from the international student/scholar office if you want extra peace of mind.

I used TurboTax last year for a similar situation and there was definitely an option to override. It's usually something like "I understand but want to continue without filing this form" somewhere on that screen. They make these warnings look scary but many are just precautionary.

Thanks for mentioning this! Do you know which form specifically I need to look for? And would I need to file separate returns for each year to get the different stimulus payments?

You'll claim the Recovery Rebate Credit directly on your Form 1040 for each year. There's a specific line for it on each year's tax return. And yes, you'll need to file a separate return for each tax year to claim the stimulus payments from that year. Each stimulus payment is tied to a specific tax year. So for example, the first two payments from 2020 would be claimed on your 2020 tax return, while the third payment from 2021 would be claimed on your 2021 return. Make sure you're using the correct year's tax forms when you file!

This is actually really important advice. I had a similar issue with a family member using my info. Without a police report, it was much harder to clear things up with credit bureaus and the IRS. They often require an official report for identity theft cases.

Wait, that's super relevant to us! My husband has about $45,000 in student loans on an income-based plan. How would filing separately affect his payments? Would the tax hit be worth the loan payment savings?

The impact depends on the specific repayment plan he's enrolled in. If he's on an Income-Based Repayment (IBR), Pay As You Earn (PAYE), or Income-Contingent Repayment (ICR) plan, filing separately could potentially lower his monthly payments significantly because they'll only count his income rather than your combined household income. Whether it's worth it requires calculating both the tax difference and the loan payment savings. For example, if filing separately costs you $1,000 more in taxes but saves $150 monthly on loan payments ($1,800 yearly), you'd come out $800 ahead. Many people in your situation find that the student loan savings outweigh the tax inefficiencies, especially if the income disparity between spouses is significant.

You're right about the standard deduction but wrong about married filing separately. MFS doesn't get the single filer standard deduction - both spouses have to take the same type of deduction (either both itemize or both take standard). And if one itemizes, the other MUST itemize even if they have zero deductions. This trips up a lot of people.

Can you claim reasonable cause to avoid penalties? My mom got really sick last year and I completely forgot to file my 2022 taxes until recently.

Yes, the IRS does accept reasonable cause explanations for waiving penalties in certain circumstances, and a serious illness in the family can definitely qualify. You'll need to attach a signed statement explaining the situation when you file your late return. Be specific about the timeline of your mother's illness and how it prevented you from filing on time. Make sure to gather any supporting documentation you can, like medical records or doctor's notes. The more documentation you have, the stronger your case will be. Just be aware that the IRS reviews these on a case-by-case basis, so there's no guarantee, but they do often show leniency in genuine hardship situations.

Paper filing is STILL a nightmare. Sent my 2022 return by mail in January and it took almost 4 months to process. Definitely e-file if you possibly can. The IRS backlog for paper returns is insane.