Thanks for explaining! So if I understand correctly, on my tax return I would indicate that I CANNOT be claimed as a dependent on someone else's return (since I provide more than half my own support), and then separately I'd try to claim my brother as my dependent if I meet all those tests you listed?

That's exactly right. You would check the box indicating that no one else can claim you as a dependent on their return. This is different from "claiming yourself as a dependent" which isn't a thing. Then separately, you would list your brother as your dependent if you meet all the qualifying relative tests. Make sure you have documentation showing you provided more than half his support - things like receipts for rent, utilities, food, clothing, medical expenses, etc. This is especially important since claiming siblings is something the IRS sometimes looks at more closely.

You're right! A sibling can be a qualifying child if they're under 19 (or 24 if a student), they lived with you for more than half the year, they didn't provide more than half of their own support, and they meet the other tests. The benefit of qualifying child vs. qualifying relative is that there's no income limit for a qualifying child. So even if OP's brother made more than $4,950, they might still be able to claim him as a dependent under the qualifying child rules.

That's really helpful! Do you know if cottage food laws would protect him from potential tax issues too, or is that a completely separate concern? And would money made under cottage food laws still need to be reported as income?

Cottage food laws and tax requirements are completely separate issues. Cottage food laws just regulate food safety and allow you to legally sell certain foods from your home kitchen - they don't exempt you from tax obligations. Regardless of whether you're operating under cottage food laws or not, all income needs to be reported on your tax return. While operating under cottage food laws, you'd still report the income on your personal tax return. You could potentially file a Schedule C as a sole proprietor even without formally registering a business name with your state, which would allow you to deduct legitimate business expenses. Many cottage food operators start this way before formally establishing an LLC or other business entity.

This is seriously underrated advice. I use a completely separate credit card for ALL business purchases, even tiny ones. Makes tracking expenses 100x easier and looks much more legitimate if there are ever questions.

Thanks for mentioning this! Do you know if I would qualify for the Child Tax Credit specifically, or would it be the Credit for Other Dependents since I'm the grandparent, not the parent? Also, would my daughter still be able to get the disability benefits if I claim the kids on my taxes?

You can potentially qualify for the Child Tax Credit even as a grandparent! The relationship test for the CTC includes grandchildren. As long as they meet the other tests (lived with you more than half the year, you provided more than half their support, they're under 17, etc.), you can claim the full Child Tax Credit, which is worth much more than the Credit for Other Dependents. Your daughter can continue receiving the disability benefits for the children regardless of who claims them on taxes. The tax dependency status and disability benefits eligibility are separate systems. The important thing is that you're actually using the majority of resources (including your own money plus a portion of those benefits) to support the children.

Yes! We claim my wife's brother who has autism and we deduct a lot of his therapy expenses as medical expenses. If their medical expenses exceed 7.5% of your AGI, you can itemize and deduct them. Also look into FSA or HSA accounts to pay for these expenses pre-tax if possible.

FinCEN's website states that you should receive a confirmation number immediately after submission. They've also indicated they'll send an email confirmation to the address you provided during filing. If you got the confirmation number, you should be good. I'd screenshot or save that somewhere for your records.

I did get confirmation numbers for each filing, but I was hoping there might be some kind of portal where you can log in and verify everything is properly recorded in their system. Guess I'll just hang onto those confirmation numbers as proof I complied with the Corporate Transparency Act reporting requirements while they were active. Thanks for confirming!

Great question. From what I understand, if the CTA is ultimately struck down, there would likely be instructions from the court about what happens to already-submitted data. In similar situations with other agencies, courts have sometimes ordered collected information to be deleted or segregated. But it's not guaranteed.

Wait, really? That would be amazing. Do I have to specifically ask for this program by name when I contact them? And would I qualify even though I had the extension and still missed it?

Yes, you should specifically ask for "First Time Penalty Abatement" when you contact them after filing. Don't rely on them to offer it - many IRS agents won't mention it unless you ask. You would likely still qualify despite missing your extension deadline. The main requirement is having a clean compliance history for the three prior tax years (meaning you filed and paid on time, or had valid extensions and paid by those deadlines). The IRS sees this as a one-time courtesy for otherwise compliant taxpayers.

I'm so sorry about your mom. I was in a similar situation with my father's passing. The IRS does have something called "reasonable cause" for penalty relief. You'll need to attach a letter explaining the circumstances and showing how the death and estate duties prevented you from filing on time. Include any documentation you can (death certificate, executor appointment papers). In my experience, they were actually pretty understanding.