2 Wait, Section 179 works for software too? I thought it was just for physical equipment like computers and machinery. Does the software have to be installed on your computer or can it be cloud-based subscription stuff too?

11 Yes, Section 179 absolutely applies to software! Off-the-shelf computer software that's available to the general public, used in your business, and has a useful life of more than one year qualifies for Section 179 deduction. Both installed software and cloud-based subscription software can potentially qualify, but there are some differences. Installed software you purchase outright typically qualifies for immediate Section 179 expensing. For cloud-based subscription services, it depends on the specifics - sometimes these are simply treated as regular business expenses rather than Section 179 property. The key is whether you have rights to the software beyond just accessing it online (like downloading components or having perpetual access rights).

16 Good point! In California, I discovered they have completely different rules about business education expenses. Had to file an adjustment because I assumed the state would follow the same federal guidelines. Cost me an extra $200 in state taxes I wasn't expecting.

Thanks for this insight. Our pediatrician has actually written respite care into my daughter's care plan, but nothing specifically about who provides it. Would it help if we got the doctor to write a letter specifically mentioning that having a trusted family member like grandma is beneficial for our daughter's condition since she struggles with new people due to her autism?

Yes, that would definitely strengthen your case considerably. Having your pediatrician specifically document that a familiar caregiver like your daughter's grandmother is medically beneficial due to her autism-related difficulties with new people would create a direct medical necessity connection. The letter should explain why this specific arrangement (flying in grandmother) is medically necessary rather than just convenient or preferable. Make sure the letter mentions your daughter's diagnosis, why consistent caregivers are important for her condition specifically, and how this respite care benefits her medical condition beyond just giving you a break.

I used TaxSlayer last year for a similar situation with my son's therapy travel expenses. TurboTax was too limiting for our complex medical situation. TaxSlayer has a specific section for unusual medical expenses where you can add detailed notes explaining the medical necessity.

That's a really good point about the state filings - I completely forgot about that part. Do you know if I need to file those annual reports for both states since I had an LLC in Nevada for part of the year, then opened one in my home state? And thanks for the loan documentation tip! Would a simple signed agreement between me and my friends work, or should I have something more formal?

You'll likely need to file reports for both states, but it depends on whether you properly dissolved the Nevada LLC. If you formally closed it, you'll need to file a final report there, plus the regular report for your home state LLC. Check Nevada's Secretary of State website for their specific closure requirements. For the loans, a simple signed agreement is perfect. Just include: 1) Names of both parties, 2) Loan amount, 3) Statement that it's interest-free, 4) General repayment terms (even if flexible), and 5) Signatures from both of you. Keep copies with your tax records. Nothing fancy needed, but having this documentation makes a huge difference if questions ever come up.

About the business vehicle deduction - can you take the mileage deduction if you're also deducting actual car costs like insurance and repairs? My tax person said I had to choose one or the other but wasn't clear why.

Thanks for this! My RSUs also vest unevenly - way more in the second half of the year. Where exactly do I find this annualized income installment method option? Is it somewhere in the Form 2210 section?

In both TaxAct and FreeTaxUSA, you'll need to go to the Form 2210 section. It's usually under "Other Taxes" or sometimes "Payments and Penalties." Look for something like "Underpayment of Estimated Tax" or directly for Form 2210. Once you're there, there should be a question asking if you want to use the regular method or the annualized income installment method. Select the annualized option. You might need to check a box that says something like "My income varied during the year" or "I want to use the annualized income installment method." The software will then ask for quarterly breakdowns of your income and withholding, which better accounts for the uneven RSU vesting schedule.

You don't need to attach pay stubs to your tax return. The Form 2210 just needs you to break down your income and withholding by quarters (or months if using the annualized method). If your tax software requires manual input, you'll need to go through your pay stubs and RSU statements to determine how much income you received and how much tax was withheld in each period. The dates on your RSU vesting statements will tell you which quarter to assign that income to.

That's a really good point about the software potentially rounding automatically. Do you know if popular programs like TurboTax or H&R Block have these settings easily accessible? I'm using TurboTax this year.

In TurboTax, you can find this under the Tools menu, then Options, and look for something like "Round all entries." It's usually enabled by default, so you might need to uncheck it if you want to use exact amounts. For H&R Block software, it's in the Settings area under "Entry Preferences." Just be aware that changing this setting might require you to review entries you've already made to ensure they display correctly after the change.

Totally agree about consistency! I made this mistake one year - used exact amounts on some forms and rounded on others. Ended up with small discrepancies that triggered a letter from the IRS asking me to explain the differences. Nothing serious, but an annoying headache to deal with.