That's good to know about the household expenses! For my situation, I do pay the mortgage, utilities, and other household costs for my home. If I can establish that one of my college kids considers my home their main residence when not at school, would I meet that requirement even if they physically spend more time at college and with their mom during breaks?

Yes, you would likely meet the requirement. The IRS looks at whether you pay more than half the cost of maintaining the home where your qualifying person lives. Since college dorms and temporary stays during breaks are considered temporary absences, what matters is that you maintain their primary home. As long as your college student considers your home their main residence when not at school, and you pay more than half the costs of maintaining that home, you should meet the requirement. I'd recommend keeping documentation to substantiate this - things like their permanent address on school records, driver's license, voter registration, and where they receive mail.

I had the same issue with TurboTax. I found that if you go back to the "Personal Info" section and manually select "Head of Household" instead of letting it calculate automatically, then proceed through the qualifying person questions again, it will stick. Sometimes the software doesn't correctly handle these college student temporary absence situations.

We're actually not in a disaster area, this was just a regular plumbing leak that went undetected for a while. Insurance did cover about $2,000 of it, but we had a high deductible and they wouldn't cover the countertop replacement since they said it was an "upgrade" from what we had before. I'll definitely keep all receipts though!

That's important information about the insurance - you can only deduct expenses you actually paid out of pocket, not what insurance reimbursed. So you'd need to subtract that $2,000 from any potential deduction. Since you're not in a declared disaster area, casualty loss probably won't work. Your best bet might be documenting how the mold affected your office space specifically and trying for a partial business deduction. But honestly, for this amount and situation, getting professional advice (either through an IRS agent or tax professional) would be worth the investment to avoid potential audit headaches.

Good point! From what OP described, this sounds more like a capital improvement than a repair, especially the new countertops. Repairs restore something to its previous condition, while improvements add value or extend useful life.

Careful with the home office deduction! I thought I could claim this too, but my accountant said if you're a W-2 employee (not self-employed), you can't take the home office deduction anymore after the 2017 tax law changes. Only applies if you're self-employed now.

You're absolutely right, and I should have been clearer. The home office deduction is only available if you're self-employed, an independent contractor, or gig worker. W-2 employees can't claim it anymore even if you work from home all the time. This was changed with the Tax Cuts and Jobs Act back in 2017. I'm self-employed so I still get to take advantage of it, but I shouldn't have assumed everyone's situation was the same. Thanks for the correction!

How do you know if they're separated correctly? My 1098 has a box for mortgage interest and another box for property taxes. Is that what you mean?

19 As far as I know, if the payment was processed through Paypal's goods and services option, Paypal will issue a 1099-K to the recipient if they meet the threshold requirements. However, this doesn't eliminate your requirement to issue a 1099-NEC if you paid them $600+ for services as a business expense. The rules changed recently though, so double-check the current requirements for the filing year.

16 Thanks for the clarification! So basically I still need to issue the 1099-NEC even if Paypal issues a 1099-K. That makes sense - one reports the payment processor's perspective and the other reports from my business perspective.

18 Do you track the fees individually for each transaction or just do a lump sum at the end of the year? I've been trying to figure out the easiest way to handle this.

7 I track them individually for each transaction. Most accounting software can be set up to automatically split Paypal transactions into the payment amount and the fee amount. If you're using something like QuickBooks or Xero, you can create a bank rule that recognizes Paypal transactions and automatically splits them - the main amount goes to your contractor expense account and the fee portion goes to a "Payment Processing Fees" expense account. Makes tax time much easier when everything is already categorized properly.

This happened to me too! The preliminary statement didn't properly account for a merger that happened with one of my stocks. The final statement corrected the cost basis and changed my gain from $5,700 to $2,100. Huge difference.

Wow that's a massive difference! Makes me feel better about waiting for the final docs. Did you end up having to file an extension or did the final statement arrive in time?

Yes, his accountant uses professional software (I think ProSeries but I'm not 100% sure). That's a good idea - maybe we can at least get the process started. Dad's really worried about getting bumped from the appointment since his guy gets super busy this time of year.

That's perfect then. Just make sure the accountant knows upfront that you only have preliminary documents so they don't accidentally file before the finals arrive. They'll probably put some kind of flag or hold on the return in their system. The best part is that with most tax software, they can give your dad a pretty good estimate of his tax situation based on what they enter now, and then it only takes a few minutes to update once the final documents arrive. Much better than trying to reschedule during peak season!