I double-checked and I'm definitely itemizing both years. My mortgage interest, property taxes, and charitable contributions put me well above the standard deduction. But you've got me wondering about the marginal rates - I didn't consider that the brackets shift each year. How much did they adjust for 2023?

The tax brackets for 2023 were adjusted upward by about 7% for inflation. For example, the 22% bracket started at $44,725 for single filers in 2023, up from $41,775 in 2022. This means you need to earn more in 2023 to reach the same tax bracket as 2022. Another factor to consider is that your withholding decreased more than your income did percentage-wise. So even though your tax liability may have gone down due to lower income, your withholding went down even more, resulting in a smaller refund. Remember, a refund just means you overpaid throughout the year.

For 2023, the standard deduction is $13,850 for single filers and $27,700 for married filing jointly. So if your TOTAL itemized deductions (mortgage interest + property taxes + charitable contributions + other eligible deductions) don't exceed those amounts, then you're better off taking the standard deduction. With $11,200 in mortgage interest alone, you're close to the threshold for single filers. Do you have property taxes or charitable donations that would push you over the standard deduction amount?

23 That's smart but what about online orders? I do most of my shopping on Amazon and often mix personal and business items in the same order to save on shipping.

11 For online orders, especially Amazon, I've found a couple workable solutions. First, if you have Amazon Business, you can actually mark certain items as business purchases within a single order and it will generate separate receipt documentation for those items. If you don't have that, another approach is to maintain separate accounts - one for business and one for personal. Yes, you might occasionally pay extra shipping, but the time saved in accounting and the clarity it provides is often worth it. Some business credit cards also provide spending reports that can help categorize your purchases after the fact.

16 Dedicated business card was the best decision I ever made for my side hustle! I use Chase Ink and it automatically categorizes everything in their reporting portal. Only downside is you still need to split those mixed receipt purchases somehow.

I'm not entirely sure of their business structure, but that's definitely something I'll look into. How complicated was the paperwork for this approach? Did you need specialized legal help?

The paperwork is definitely more complex than a straightforward asset purchase. We needed both our tax attorney and accountant involved to structure it properly. The election itself is made on Form 8023, but the agreement needs very specific language to support it. The biggest challenge was agreeing on the asset allocation with the seller since this impacts the tax consequences for both sides. We ended up allocating more value to assets that gave us better depreciation/amortization treatment while minimizing their gain recognition. It took about 6 weeks to finalize all the details, but the tax savings made it worthwhile.

Great point. If bankruptcy is filed within 90 days of any payment or transfer, it could potentially be clawed back as a preferential transfer. I'd recommend doing a solvency analysis as part of your due diligence.

That sounds like it could trigger some red flags. Wouldn't the IRS consider that arrangement suspicious if the only client of your handyman business is your other business?

You're right that if the handyman LLC only did work for your primary business, it could definitely look suspicious. The arrangement works better if you're legitimately doing handyman work for other clients too. You'd need to charge market rates to all clients including your own business, keep separate books, maintain proper insurance, and fulfill all requirements of a legitimate business. It's definitely not a simple workaround and probably not worth it just for occasional home repairs.

Yes, if you're using the simplified method ($5 per sq ft), then you cannot deduct any actual expenses related to your home, including repairs. The simplified deduction is meant to replace ALL home-related expenses including mortgage interest, utilities, repairs, etc.

That's a good point I hadn't considered. How much does it typically cost to set up an LLC? And does it make taxes more complicated?

The cost varies by state - I'm in Ohio and paid about $99 for the filing fee. Some states are cheaper, some more expensive (California is like $800/year!). You'll also need to file an annual report in most states which usually costs $25-50. For taxes, it's actually not more complicated if you're a single-member LLC. The IRS treats it as a "disregarded entity" by default, meaning you still just file Schedule C with your personal return. No separate tax return needed. You get the liability protection without the tax complexity. Just make sure you keep business funds separate from personal (get a business checking account), and maintain good records. The separation helps reinforce the liability protection. Worth every penny for the peace of mind, especially when you're making products people use in their daily lives.

This is a really important distinction. The CTR is filed by banks for cash OR monetary instruments over $10k. But the bank handles this, not you, and it's completely routine. As long as you're depositing legitimate income and reporting it on your taxes, there's absolutely nothing to worry about. The only time people get in trouble is when they deliberately try to avoid these reports by making multiple smaller deposits. Don't do that and you're fine!