Are there any free alternatives to MileIQ? I'm trying to keep expenses down while starting my business.

Stride is a good free alternative that many of my clients use. It doesn't have all the premium features of MileIQ, but it covers the basics the IRS requires. Some people just use Google Maps to calculate distances and keep a simple spreadsheet with dates and purposes. That works too as long as you're consistent and record everything promptly.

Wait what?? I've been filing self-employed for 3 years and never heard of this. Is this something new?

My accountant mentioned this last year. It's not new, been around since 2018 but many self-employed people miss it. Definitely worth looking into if you're filing a 1099.

Do you withhold taxes from their paychecks or is there some exemption since they probably don't make enough to owe taxes anyway?

We do withhold federal income tax as normal, but they both typically get it all refunded when they file their returns since they earn under the standard deduction. For FICA taxes (Social Security and Medicare), there's an exemption for children under 18 working in a parent's business if it's a sole proprietorship or a partnership owned only by the parents. Since our restaurant is set up that way, we don't have to withhold FICA taxes from their wages, which saves everyone money. If your business is incorporated, different rules apply and you would need to withhold FICA.

There's no minimum age requirement in federal law for working in a parent's business (though state laws may vary). But what matters is whether the work and pay are reasonable. A 9-year-old stuffing envelopes occasionally should be paid what you'd pay any kid that age for that task - not an adult wage.

How many trades do you need to do to qualify as a "trader" for the IRS? I do about 20-30 trades a month. Is that enough?

There's no specific number that automatically qualifies you. The IRS looks at several factors: trading frequency (daily is best), holding periods (shorter is better), time devoted to trading (more is better), and whether you depend on the income. Your 20-30 trades monthly might be enough if they're your primary activity and you hold positions briefly. The courts have generally supported trader status for those doing hundreds of trades annually, spending several hours daily on trading, and holding positions for very short periods. But it's a facts-and-circumstances test, not just a number threshold. I'd recommend consulting a tax pro who specializes in trader taxation since the benefits can be substantial but the requirements are strict.

Most brokers can export your trades in a format TurboTax can import. Look for a .TXF file export option on your broker's tax documents page. If they don't offer that, you might be able to download your transactions as a CSV and convert it using a third-party tool.

Thanks for the tip! Just found the .TXF export option on my broker's website. That's going to save me hours of manual data entry. I was dreading having to type in all those trades one by one.

Yeah I realized that after I posted. Turns out my frustration was more about the principle of the thing than the actual work involved. Do you know if the free version of TurboTax handles Schedule D or would I need to upgrade?

The free version of TurboTax doesn't support Schedule D - capital gains/losses require upgrading to at least the Deluxe version which is around $60-70 depending on current promotions. If you're concerned about paying that much for reporting a $0.31 loss, you might want to look into the IRS Free File options or other free tax software like FreeTaxUSA which handles capital gains for free. Credit Karma Tax (now Cash App Taxes) is another free option that includes Schedule D.

This is good advice but I've found it depends entirely on the brokerage. Fidelity offers this consolidated view but Robinhood forces you to report every single stupid fractional share transaction. Drove me CRAZY last year.

Thank you for bringing this up! Are there specific credits I should be looking out for that work differently with HoH versus MFS? I do have childcare expenses that I was hoping to claim.

The Child and Dependent Care Credit is a big one - you generally can't claim it when filing as Married Filing Separately, but you CAN claim it as Head of Household. This could be worth thousands if you're paying for childcare. Same with the Earned Income Tax Credit - you're not eligible with MFS status, but you are with HoH. The Education Credits (American Opportunity and Lifetime Learning) are also not available with MFS but are with HoH. These differences are exactly why it's so important for you to qualify for HoH status if possible. The tax benefits compared to MFS are substantial, especially as a single parent with childcare costs.

I used TurboTax last year in the same situation. There's a series of questions about your living situation that you need to answer. When it asks if you're married, say yes. Then when it asks if you lived apart from your spouse for the last 6 months of the year, say yes. Keep answering their questions about supporting your child and household, and it should eventually determine you're eligible for HoH. If you get stuck, use their live help feature - I had to do that to get through some confusing parts.