That's a great idea! Which tax software did you find easiest for teenagers to use? I'd like to start teaching my kids about taxes too.

I found FreeTaxUSA to be the simplest for my kids. The interface is clean without a bunch of upsells that confuse them. TurboTax also has a free option that works fine for basic W-2 income, but they push paid upgrades more aggressively which frustrated my teens. The key was sitting with them the first time and explaining each section. Now my 18-year-old handles it completely on her own, and my 16-year-old only needs a little guidance. It's definitely worth the time investment to teach them this life skill early!

This is so true. I'm in California and our state threshold is different from federal. Worth checking your specific state requirements early!

I hadn't thought about the wash sale angle at all. Do we know when these rule changes might happen? I've definitely been doing some selling and rebuying to optimize my tax situation. Would previously filed returns be affected if they change the rules, or would it only apply going forward?

The proposed changes have been floating around for a while but haven't been implemented yet. Generally, tax changes aren't retroactive, so your previous returns should be safe. But going forward, you'd need to be careful about selling and rebuying within a 30-day window if they do apply wash sale rules to crypto. If you're concerned, the safest approach is to document your reasoning for using HIFO now, show consistency in your method, and keep immaculate records. That way, even if rules change, you can demonstrate you were following the guidance available at the time you filed.

TurboTax can handle basic crypto but honestly struggles with anything beyond simple transactions. For 50+ transactions across multiple exchanges, you'll find it frustrating. I switched to CoinTracker which integrates with TurboTax and it made HIFO calculations much easier.

Wait, so if I report losses in the beginning, would I still have to pay self-employment taxes? That seems counterintuitive if I'm not making money yet.

No, you wouldn't pay self-employment taxes on losses. Self-employment taxes only apply to profits. If your business has a net loss, there's no profit to tax. That said, consistent losses could potentially trigger IRS scrutiny under the hobby loss rules we discussed earlier. It's a balancing act - you want to take legitimate deductions to reduce your tax liability, but you also need to demonstrate a genuine intent to make profit over time.

How serious are they about the "exclusively for business" part? My garage is technically my workshop but also stores holiday decorations and some other stuff. Would that disqualify the entire space?

Thanks for the additional suggestions! I actually don't use a payroll provider since it's just one employee (family member), but I'll check with the local print shop tomorrow. I do have QuickBooks but only the basic version - I'll see if it has W2 filing capabilities.

QuickBooks Basic should have W2 capabilities, but you might need to purchase their payroll add-on to access it. It's usually around $50 for a basic filing service, which might be worth it for the convenience. Local print shops that cater to businesses are often overlooked resources for tax forms. They typically understand the requirements better than the big box stores and might be willing to sell you just the forms you need rather than a bulk pack.

That's not entirely accurate. The deadline is January 31 for BOTH giving forms to employees AND for filing with the SSA. The February 28 deadline was changed several years ago. Don't want OP to get penalized by following outdated info!

This is really helpful info, thank you! How many hours would I need to spend on my rental business for it to be considered "material participation"? And does managing my existing rooms count toward that total if I'm also using those hours to justify business travel to look at other properties?

For material participation in a short-term rental business, you generally need to meet one of several tests, but the most common is spending more than 500 hours per year on the activity. For smaller rental operations, there's also a 100-hour test if you have the most participation of any individual in the activity. Yes, all the time you spend managing your existing rental rooms absolutely counts toward your material participation hours. This includes time communicating with guests, cleaning, maintenance, bookkeeping, researching prices, updating listings, processing payments, etc. All of this builds your case for being actively engaged in the rental business, which supports both the material participation standard and justifies business travel to expand your existing operation.

You definitely need at least TurboTax Premier for rental properties. The Deluxe version won't have the Schedule E forms you need. I tried doing it with Deluxe last year and had to upgrade halfway through. Save yourself the headache.