This sounds smart but isn't there a risk of things falling through the cracks when two different people are working on your return? How do you make sure everything gets coordinated properly?

Good question! The key is having a clear division of responsibilities. My CPA does all the domestic stuff first and completes a draft return. Then I send that to the international specialist who adds the foreign forms and makes any adjustments needed to the main forms. Communication is important - I set up an email thread with both of them so they can directly clarify anything if needed. I also pay the international person a bit extra to review the whole package at the end to make sure everything fits together. It's worked smoothly for 3 years now!

VITA is amazing for basic returns but they absolutely will NOT handle foreign investments or rental properties. Their certification specifically excludes foreign income and most investment scenarios. They're trained to recognize when a return is out of scope and will refer you elsewhere.

I'm in Illinois, which definitely has state income tax unfortunately. So based on what everyone's saying, it sounds like I do need to file a state return even though all my income is from investments. Do you know if there's a minimum threshold for filing in states that do have income tax? Like if my investment income is pretty small, maybe I don't need to file?

Illinois definitely requires filing for investment income. Their threshold is pretty low too - I believe it's only $2,275 for single filers in 2024. If your total income from all sources (including those 1099 forms) exceeds that amount, you need to file. Even with relatively small investment income, you should still file. One benefit is that Illinois has a property tax credit that you might be eligible for, so you could actually get money back depending on your situation. Many people miss out on state tax credits because they incorrectly assume they don't need to file.

Not a stupid question! Investment companies report your info to the IRS with your SSN but don't actually determine which state you file in. They typically send 1099s with your federal info only. It's your responsibility to report that income on the correct state returns based on your residency.

Thanks for bringing up the Head of Household point - I didn't even think about that! Do I need any specific documentation to prove I qualify for that status? I'm worried that if I have to paper file, it's going to be a huge mess.

For Head of Household status, you need to show you paid more than half the cost of keeping up the home where your child lived for more than half the year. Keep records of rent/mortgage payments, utility bills, property taxes, food expenses, repairs, etc. Paper filing in these situations is unfortunately common. The key is sending a complete package - your tax return, a signed statement explaining the custody situation, and copies (not originals) of documents proving where your child lives. Include a cover letter referencing "dependent dispute" and attach any evidence that shows you're the custodial parent. It takes patience, but the IRS will sort it out if you have proper documentation.

Would text messages where the other parent acknowledges the custody schedule help? I'm dealing with this right now and have tons of texts but no formal agreement.

I hadn't considered wash sales affecting the holding period classification! I'll definitely look back through my history to see if I had previous transactions in this stock. That actually makes a lot of sense because I was actively trading this particular ticker throughout the year, so there's a good chance I triggered some wash sales along the way. Would that really change the Form 8949 category though? I thought wash sales just affected the basis calculation, not the short-term/long-term classification.

Wash sales primarily affect your cost basis by disallowing the loss, but they can also affect holding periods in certain circumstances. If you repurchase shares within 30 days of selling at a loss, the holding period of the original shares can sometimes be added to the new shares. This is a complex area of tax law and brokers often handle it differently. Some brokers calculate everything properly, while others (especially the free trading apps) often make errors in reporting. Your situation sounds like a reporting error rather than a legitimate holding period adjustment, but it's always good to check your complete trading history to be sure.

This is the correct answer! Broker lot relief methods are often the source of these discrepancies. I work in accounting and see this constantly with clients who trade actively.

Thanks for mentioning this! I do actually use my personal phone to coordinate with the cleaning company about the referrals, and sometimes I drive to meet potential referral clients to assess their needs before connecting them. Would those miles be deductible? And what percentage of my phone bill could I reasonably claim?

Yes, the mileage for driving to meet potential referral clients would absolutely be deductible! Keep a log of those trips with dates, miles driven, and purpose. The current mileage rate for 2025 is 67 cents per mile, which adds up quickly. For your phone, you would deduct the percentage that you use for business purposes. If you use your phone about 30% of the time for these referrals, then you could deduct 30% of your bill. Just make sure you have a reasonable basis for whatever percentage you claim and keep your phone bills as documentation. You might also consider a separate phone line for business if the volume increases.

But you can deduct half of the self-employment tax on your 1040, which helps a little bit at least!