That's really helpful to know! If I choose the Section 179 route instead of MACRS, are there any downsides I should be aware of? And if I do this, do I still need to fill out the depreciation forms or is there a different form for Section 179?

The main downside is that if your business income is less than the Section 179 amount, you can only deduct up to the amount of your business income. So if you're just starting out or having a low-income year, MACRS might be better to spread the deductions across years when you might be making more money. For forms, you'll need to complete Form 4562 for either Section 179 or MACRS depreciation. The form has specific sections for each method, so you'll just fill out the Section 179 part (Part I) instead of the MACRS section if you go that route.

Would a spreadsheet tracking all assets work, or do you really need separate folders for each item? I've got about 20 different assets I'm depreciating and separate folders seems excessive.

We don't actually have a business together though - we're just splitting household and child expenses. Does a qualified joint venture apply to our situation? I thought that was specifically for business partnerships.

You're absolutely right - I confused QJV with something else. Qualified Joint Venture is indeed only for business partnerships, not for personal tax filing situations with shared children. A better approach for your situation would be to carefully calculate who provides more than 50% of the cost of maintaining the home to determine Head of Household eligibility. Since you own the house but split expenses 50/50, you'll need to track everything carefully. My accountant recommended keeping a spreadsheet of all household and child expenses with receipts, as unmarried couples with children are statistically more likely to be questioned about their filing status and dependent claims.

But they both make six figures. EIC phases out completely around $60k even with multiple kids. They're way beyond the income limits for that credit.

You're totally right! I completely missed the part about them both making around $120k. At that income level, they're definitely over the EIC threshold. For their income level, they should focus more on optimizing the Child Tax Credit, Additional Child Tax Credit, and the Child and Dependent Care Credit. They should also carefully consider who should claim Head of Household status since that provides a more favorable tax bracket structure than filing as Single.

I've heard about these but always wondered - if you're young (like under 40), doesn't this approach lock up a TON of your money until retirement age? What if you want to access some of that cash before 59.5 years old?

You're right to consider the access limitations. With a defined benefit plan, you're committing to regular contributions that you can't easily access before retirement without penalties. However, there are some strategies to work around this. One approach is to combine it with a "cash balance plan" variation, which can provide more flexibility. Additionally, you can look into Substantially Equal Periodic Payments (SEPP) under IRS Rule 72(t) which allows penalty-free early withdrawals if structured correctly. Some business owners also balance their retirement contributions - putting enough in the defined benefit plan to get significant tax savings while keeping other funds more accessible.

Be really careful with this advice. The IRS has been cracking down HARD on offshore structures for domestic businesses. If you don't have legitimate international operations and clients, this could get you in serious trouble. I knew someone who tried something similar and ended up with massive penalties and an audit that lasted 2+ years.

Do you need to make an appointment far in advance? I'm kinda last minute with my taxes and the deadline is getting close.

Yes, you should try to make an appointment as soon as possible. As we get closer to the filing deadline, VITA sites get very busy and appointments fill up quickly. Some locations might have walk-in options, but you'll likely wait longer. If you're really cutting it close to the deadline, remember you can always file for an extension using Form 4868, which gives you until October to file (though you still need to pay any estimated taxes owed by the regular deadline to avoid penalties).

I had no idea about this! Does this apply even with my small amount of income? And is this in addition to the standard deduction everyone gets?

Thanks for the advice! Do you know if the IRS will notify me when they reject the second return? And did your brother have any issues with penalties or anything when he filed the amendment?

Yes, they'll send a rejection notice for the second return, usually through the tax software you used. My brother got an email from TurboTax about a week after filing letting him know the return was rejected due to a duplicate filing. He didn't face any penalties because he filed the amendment promptly and clearly explained the situation. Just make sure you're honest about what happened and file the amendment as soon as possible. The IRS is generally understanding about honest mistakes as long as you take action to correct them.

This is terrible advice. You should always file correct tax information regardless of the refund amount. The IRS can come after you years later if they discover discrepancies, especially with something like Medicaid payments which are government benefits.