Thanks for this tip! My tax preparer didn't mention the self-employment tax deduction at all. Do you know if this is something that gets calculated automatically or do I need to specifically ask about it? Also, can I still set up a SEP IRA for last year's taxes or is it too late now?

Any decent tax software or preparer should calculate this automatically, but it never hurts to specifically ask to make sure it's included. It appears on Schedule 1 of your 1040 as an adjustment to income. You actually can still set up and contribute to a SEP IRA for last year! You have until your tax filing deadline including extensions (so potentially as late as October 15, 2025), though you need to establish the account before filing your return. The contribution limit is either 25% of your net self-employment income or $69,000 for 2024, whichever is less. This is one of the best ways to reduce your tax burden if you have the cash available to make contributions.

The home office deduction used to be a bigger red flag years ago, but it's much more common and accepted now, especially for legitimate 1099 contractors. The key is making sure the space is used "regularly and exclusively" for business. That means no using your office for personal stuff. If you keep good records and photos of your office space and can show it's dedicated to work, you'll be fine. Just be accurate with the square footage calculation - don't claim your entire apartment if you're only using one room!

Do you know if these state credits are only for people who pay for care or also for family members who provide the care themselves? My brother has moved in with my mom who has early Alzheimer's and had to reduce his work hours, but he's not getting paid.

It varies by state, but many state caregiver credits actually do cover family members providing unpaid care. In my state, lost income due to caregiving responsibilities can qualify for the credit. Your brother should check specifically for "family caregiver tax credits" in your state. Some states also offer credits for making accessibility modifications to homes for people with conditions like Alzheimer's. The eligibility requirements differ significantly between states though, so have your brother check your state's department of revenue website or call them directly.

I used TurboTax last year for a similar situation with my father's medical expenses. It does prompt you with questions about dependents and medical costs, but I found it didn't really explain the nuances very well. I ended up consulting with an accountant afterward who found several deductions I'd missed. For complicated situations like this, I think it's worth paying for professional help.

This is so important! When I amended from 1040 to 1040NR last year, I discovered my country's tax treaty exempted the first $5000 of my teaching assistant income completely. The tax software I originally used had no idea about this!

Thanks for mentioning Form 8843! Do I need to include that with the amendment even if I already submitted it with my original (incorrect) 1040 filing?

Yes, you should still include Form 8843 with your amendment package even if you filed it with your original return. The amendment is essentially a complete revised return, so all required forms should be included. When the IRS processes amendments, they prefer having all relevant forms together in one package rather than having to reference parts of your original filing. The good news is you can just use a copy of the same Form 8843 you submitted originally (assuming the information on it was correct). No need to complete a new one unless something on it needs correction.

This is great advice. What specific questions would you recommend asking to really test if they know eCommerce? And did you find someone who charges flat monthly rates or hourly?

This is super helpful! I'm definitely going to use these points when interviewing potential CPAs. Quick question though - I've been operating as a single-member LLC but have been thinking about switching to an S-Corp. At what income level do you think that makes sense for an eCommerce/digital marketing business?

For digital marketing agencies and eCommerce businesses, the S-Corp election typically makes sense when your net profit reaches around $40,000-$50,000 annually. At that point, the self-employment tax savings usually outweigh the additional costs and compliance requirements. Remember that with an S-Corp, you need to pay yourself a reasonable salary subject to payroll taxes, with the remainder taken as distributions. For digital service businesses like yours, the IRS expects a higher percentage as salary compared to product-based businesses, usually 60-70% of profits. The exact amount depends on what similar roles would pay in your market and your level of involvement.

This is solid advice. My "eCommerce expert" CPA didn't understand that Shopify Payments fees should be treated differently than regular credit card processing. Ended up having to file an amended return. So annoying.