Thanks for this list! I hadn't thought about the phone mount or dashcam. Can you really deduct Spotify though? I use it while driving but isn't that kind of a gray area?

You can deduct Spotify if you're using it specifically for your business - like providing music for passengers as part of your service. It's considered a business expense if it's primarily for your customers' experience. If you're just listening to it yourself while doing DoorDash deliveries, that would be much harder to justify as a business expense since there are no passengers benefiting from it. It's all about whether it's necessary for your business operations versus personal enjoyment.

Yup, this is super important! I made that mistake with my first delivery car. I used actual expenses the first year when the car was new and had higher value for depreciation. When the car got older and needed fewer repairs, standard mileage would have been better but I was stuck with actual expenses. For parking and tolls - gig drivers should use apps that track these separately! I use the Stride app for mileage and the Everlance app to snap photos of parking receipts. Makes tax time way easier.

Thanks for pointing this out! I didn't realize that choosing actual expenses would lock me in for the life of the vehicle. That's definitely something to consider since I might keep this car for several years. And I had no idea about the parking fees and tolls! I've probably spent around $200 on parking in downtown areas for pickups/deliveries. Good to know I can deduct those on top of the standard mileage.

Would it be better to fax the response instead of mailing it? I've heard the IRS processing centers have huge backlogs of mail but faxes get entered into their system faster.

In my experience, faxing can be faster but only if you have confirmation the fax went through successfully. The IRS fax lines are often busy or don't connect properly. I'd recommend doing both if possible - send via certified mail for your records and also try faxing. The key thing regardless of method is making your documents super clear and organized. Put your notice number, SSN (last 4 digits only for security), and tax year on every single page. The IRS processes millions of pieces of correspondence and making yours easy to identify with the right case helps tremendously.

That doesn't sound right. If someone incorrectly claimed you as a dependent when you weren't actually qualified to be one, you should still be eligible for your own stimulus payment. The IRS even has procedures for resolving these exact situations.

He did get a special completion grant in his final semester that wasn't expected. But it was only about $5k, nowhere near these massive amounts showing up. And nothing that would explain an extra $80k in box 5 when his actual grants were only about $22k total for the year. I'm definitely going to contact the university tomorrow. Just needed to make sure I wasn't missing something obvious about how these forms work before I start that process.

The completion grant could be part of it, but you're right that it doesn't explain the magnitude of these discrepancies. One other possibility is if there was some loan forgiveness or conversion of loans to grants. Some schools have programs where initial loans get converted to grants upon graduation or completion of certain requirements. These conversions get reported in a really confusing way on the 1098-T. Either way, it's definitely worth getting clarification from the university. Ask them for a full accounting of how they arrived at each box amount.

But wouldn't the American Opportunity Credit be unavailable if the student already claimed it for 4 years? I thought that was the maximum lifetime limit?

That's helpful, thank you. How much should I expect to pay for a quality preparer who will do both (ensure accuracy and find legitimate deductions)? I don't want to overpay, but I also understand that expertise costs money.

For a situation like yours with a home purchase and some freelance work, expect to pay somewhere between $350-600 for a quality tax preparer, depending on your location and the complexity of your freelance activities. If your freelance work is more involved with lots of expenses and equipment, it might go higher. It's an investment, but a good preparer can often find deductions that more than cover their fee. Just make sure whoever you choose is asking detailed questions about your situation rather than just collecting your W-2s and basic info. The more questions they ask, the more likely they're looking for those legitimate deductions you might qualify for.

What kind of deductions triggered your audit? I'm always nervous about claiming home office or business expenses even though I legitimately work from home half the time.

1 I actually did replace the HVAC system about 6 months after inheriting it. Would that count? It cost around $9,000. I should have the receipt somewhere in my email.

2 Yes, that absolutely counts! A new HVAC system is considered a capital improvement, not just a repair. Make sure to add that $9,000 to your stepped-up basis. Any significant improvements that extend the life of the property or add value can be included. Just make sure you have that receipt handy in case of an audit.

20 I used a CPA last year for my inherited property sale. Cost me about $350 but worth every penny for the peace of mind. Regular tax preparers at chain places were clueless about stepped-up basis rules.