That's exactly right. Your personal name goes on line 1, and your registered DBA "Johnson Photography" goes on line 2 as the business name. Make sure you're still checking the "Individual/sole proprietor" box since a DBA isn't a separate legal entity. This way, when your clients issue 1099s, they'll correctly identify both you (the taxpayer) and your business name, which helps avoid confusion when the IRS is matching documents to your tax return.

So if I do have a registered DBA (I registered "Johnson Photography" with my county), then I would put my personal name on line 1

Couldn't you just file a Schedule C with "Designs by Mike" as your business name on your tax return to match the 1099?

Thank you for mentioning this! My friend doesn't have any forgiven loans yet, but they do get a health insurance subsidy through the marketplace. How exactly would that factor into calculating their taxable income for the Roth conversion?

The health insurance subsidy itself (Premium Tax Credit) isn't counted as taxable income. However, the amount of subsidy your friend qualifies for is determined by their income - so the Roth conversion could potentially increase their income enough to reduce their subsidy amount. If they're near a subsidy cliff (where a small income increase results in a large subsidy decrease), they'll want to calculate very carefully. Converting too much might push them over a threshold where they lose more in health insurance subsidies than they gain in tax benefits from the Roth conversion.

This happened to me too! My state (NY) counted my entire research stipend as taxable even though federally it wasn't. Almost nobody mentions the state tax differences.

Thanks for this important clarification. Yes, I'm very careful about the exclusive use requirement. The desk and computer I mentioned are used ONLY for my LLC work - never for personal stuff or my day job. I have separate equipment for those purposes. For the meals, that makes sense. If I'm just grabbing food alone because I'm hungry while out visiting a client, it sounds like that's not deductible. But if I'm actually meeting with the client over a meal to discuss business, then it would be 50% deductible. I'll make sure to document the business purpose for any meals I try to deduct.

But doesn't using a business credit card for subway fares mean they'd need to actually set up a business account with the transit system? Most subway systems let you tap any credit card now, but it just shows up as "TRANSIT AUTHORITY" on your statement with no details about the specific trip.

You don't necessarily need a business account with the transit system. What I meant was, use your business credit card whenever you tap to pay for transit. Then separately, many transit systems let you create a personal online account where you can see your trip history regardless of payment method. You're right that the credit card statement just shows "TRANSIT AUTHORITY" - that's why I supplement it with the trip history from my transit account. Together, they provide complete documentation. The business card proves you paid for it, and the trip history shows the details of when and where you traveled.

Thanks for bringing this up. I'm worried about how the 401K distribution might affect our Earned Income Credit. Do you know if retirement distributions count as income for calculating the EIC? We're really counting on that credit this year with our reduced income.

Yes, 401k distributions do count as income for calculating the Earned Income Credit, which is something to be aware of. The distribution could potentially reduce your EIC amount since it increases your AGI. However, it won't completely disqualify you if your overall income still falls within the EIC thresholds. For the Child Tax Credit, the same principle applies - the 401k distribution increases your income, which could affect the amount you receive if you're near a phase-out threshold. In your specific situation though, if you're truly below the poverty line even after counting the distribution, you'll likely still qualify for the full credits, but it's definitely something to watch when you're preparing your return.

Is fixing a foundation considered a qualified hardship though? I thought it was limited to preventing foreclosure, medical expenses, education, or first-time home purchases. I don't think home repairs qualify unless they were to repair damage from a federally declared disaster.

Do you know if this still applies if you changed jobs mid-year? I worked for two different companies in 2024 and I'm not sure how to verify everything matches up correctly.

For multiple employers during the year, you'll need to check each final pay stub from each job against the corresponding W-2. The key is looking at the year-to-date totals on the last pay stub from each employer - these should match exactly with what's reported on each W-2. Pay special attention to Box 1 (wages), Box 2 (federal tax withheld), and Boxes 3-6 (Social Security and Medicare). If you switched jobs mid-year, your refund calculation gets more complex because withholding might not have been perfectly calculated across both jobs, but at minimum, the numbers on your documents should match your actual withholding.

I used Form 4852 two years ago when my former employer never sent my W-2. It was actually pretty straightforward - you just need your last pay stub with the YTD totals. My refund was delayed by about 3 weeks while the IRS verified everything, but otherwise no issues.