Do you need a separate bank account for the rental income too? I'm about to start renting out my spare bedroom and wondering how detailed the bookkeeping needs to be.

A separate bank account isn't absolutely required, but it makes your life SO much easier. It creates a clear separation between your personal finances and your rental business, which is extremely helpful if you ever get audited. As for bookkeeping detail, err on the side of too much rather than too little. Keep all receipts, maintain a spreadsheet tracking income and expenses by month, and document everything about the rental use (dates occupied, repairs, any personal use periods). Take photos before/after tenants for documentation of condition. The more organized you are now, the less stress you'll have at tax time or if questions come up later.

That's for home OFFICE deductions, not rental property. The simplified method doesn't apply to rental income reported on Schedule E. They're totally different tax situations.

Does anybody know which brokerages are good about reporting cost basis correctly? I'm with Fidelity now but thinking about switching.

In my experience, Fidelity is actually one of the better ones for correctly reporting cost basis to the IRS. Vanguard and Charles Schwab also tend to be reliable with their reporting. The issues I've seen most often come from newer trading platforms and especially crypto exchanges, which sometimes have incomplete reporting systems. TD Ameritrade (now part of Schwab) has been solid in my experience too. The key thing to look for is whether your year-end tax documents clearly show both proceeds and cost basis for each transaction. If you see "cost basis not reported to the IRS" footnotes on your 1099-B, that's a red flag that you might face the exact situation the original poster is dealing with.

This happened to me too. How long did it take to resolve once you sent in your documentation?

Thanks for this advice! I've never heard of an IP PIN before. Does having this PIN slow down my refund processing at all? And do I need to get a new one every year or is it a one-time thing?

The IP PIN doesn't slow down your refund processing at all - it actually helps prevent delays because it verifies upfront that you are the legitimate filer. The IRS knows immediately that your return is the valid one. Yes, you do need a new IP PIN each year. The IRS issues new ones every January, and they'll mail it to you automatically once you're in the program. You can also retrieve it online through the IRS website. It's a small hassle to keep track of a new number each year, but definitely worth it for the protection it provides.

This is really good advice. How do you get the wage and income transcript? Can you do it online or do you have to mail a request?

This is exactly what happened with my ex. He tried to claim our kid on his unemployment to get the higher benefit amount, knowing a portion would be garnished for the back support he owed. Kind of sneaky but at least some money was coming to support the child.

Do the quarterly payments apply even if trading is just a side thing? My main income is from my regular job where I have taxes withheld.

Yes, they can still apply even if trading is just a side activity. The key is your total tax situation. If your W-2 withholding covers at least 90% of your total tax liability (including the taxes on your investment gains) or 100% of last year's tax liability (110% if your AGI was over $150,000), then you're generally safe from underpayment penalties. But if your trading generates significant gains and your regular withholding doesn't cover enough of the additional tax, you might need to make estimated payments. You can also adjust your W-4 with your employer to increase withholding, which is sometimes easier than making separate quarterly payments.

YES! This happened to me too. For crypto especially, they often don't track the cost basis if you transferred it in from another wallet. You have to keep your own records of what you originally paid. I use a spreadsheet now to track everything.

If this happens, don't panic. You'll need to fill out Form 8949 and check box "B" for transactions where the cost basis wasn't reported to the IRS. Then you'll need to enter the correct cost basis yourself using your own records. If you don't have perfect records, there are crypto tax services that can help reconstruct your transaction history by scanning the blockchain. Just whatever you do, don't leave the cost basis blank or the IRS will assume it's $0 and tax you on the entire amount!