Oh that's a good point I hadn't considered! Do you know where I can check my state's specific requirements for capital gains?

The best place to check is your state's department of revenue website. Just search "[your state] tax filing requirements" and look for their income tax section. Most states have an easy-to-find page that lists all their filing thresholds. For example, California requires filing at much lower income levels than federal, and some states tax capital gains differently than the federal government does. Some states even require you to file a state return if you filed federal, regardless of income level.

Which software do you use that's completely free? Most of the "free" ones I've found end up charging when you need to report investments.

Can the custody agreement override the IRS rules? Like if the agreement says the non-custodial parent can claim the kids but they don't have the Form 8332, does that still work with the IRS?

The custody agreement itself doesn't override IRS rules, but it creates a legal obligation between you and your ex. For the IRS to recognize the non-custodial parent's right to claim the child, you still need Form 8332 or similar documentation. What works well is having the requirement to sign Form 8332 explicitly stated in your custody agreement. This way, if the custodial parent refuses to sign it when they're legally obligated to by the court order, you have recourse through family court. It's essentially a two-step process: the custody agreement creates the legal obligation between parents, and Form 8332 satisfies the IRS requirements.

That's exactly what I'm worried about! Did you try to get the Form 8332 signed after the fact or was it too late by then?

This is actually a really good point. I got audited last year because I had 4 years of small losses in my photography business, and the IRS questioned whether it was a legitimate business or just a hobby. Had to provide a ton of documentation showing I was actively trying to make it profitable.

Is there a threshold for suspicious activity reports for cash deposits? Like if someone deposits $1000 cash every week, does that trigger something? Asking for a friend lol

There's no fixed threshold for what's considered suspicious below the $10,000 mark. Banks have algorithms that look for patterns that might indicate "structuring" (deliberately breaking up deposits to avoid the $10,000 reporting requirement). Regular cash deposits aren't automatically suspicious - many legitimate businesses deal in cash regularly. What typically raises flags is changing patterns, irregular timing with amounts just under reporting thresholds, or deposits that don't align with your known income sources or business activity. Multiple deposits totaling just under $10,000 within a short timeframe is a classic pattern that triggers review.

You're confusing a few different tax rules. The $400 threshold relates to when you must file Schedule SE for self-employment tax. If you make $400 or more in self-employment income, you're required to pay self-employment tax (Social Security and Medicare). The $600 threshold is when a business is required to send you a 1099-NEC form, but that doesn't affect your obligation to report the income. You must report ALL income regardless of amount, even if it's just $50.

Thanks for bringing this up! I hadn't even thought about the self-employment tax angle. So if I deduct the $1,300 in expenses, I'd save on SE tax even though my potential 401k contribution would be lower. Do you know roughly how that math works out? Is the SE tax savings significant enough to make the lower contribution limit worthwhile?

The math typically favors taking all legitimate business deductions. On $1,300 of expenses, you'd save about $199 in self-employment tax (15.3% of $1,300) by deducting them. If you didn't deduct those expenses, you could contribute an extra $1,300 to your Solo 401k, which would save you income tax on that amount - but you'd still pay the extra $199 in SE tax. Unless you're in a very high income tax bracket, the SE tax savings plus income tax savings on the $1,300 business deduction will usually exceed the income tax savings on the additional $1,300 401k contribution.

But what about the employer contribution part? Doesn't that add more to the total you can put in? I thought solo 401ks let you contribute as both employer and employee.