Interesting historical context! How high were tariffs back then compared to what we might need today to fund the modern government? And didn't high tariffs cause problems that eventually led to creating income tax in the first place?

Before income tax became permanent in 1913, tariff rates varied widely but sometimes exceeded 40-50% on many imported goods. However, the federal government was drastically smaller then - no Social Security, Medicare, modern military, or many other major expenditures we have today. You're absolutely right about the historical problems. High tariffs like the Smoot-Hawley Tariff Act of 1930 contributed to trade wars and economic problems. The core issue is that tariffs are essentially taxes on consumption that disproportionately affect everyday purchases. This regressive nature was one reason the progressive income tax system was developed - to tie tax burden more closely to ability to pay rather than consumption needs. Moving entirely back to tariffs would fundamentally shift tax burden distribution across different income levels.

Do you think it would create jobs though? Like all that new manufacturing you mentioned plus all the compliance people? Might balance out the lost tax preparer jobs?

That's a great suggestion! I didn't know you could do a one-time withholding adjustment. Would I just ask our HR department about this option?

Yes, exactly! Just reach out to your HR or payroll department and ask if they allow one-time additional withholding requests. Most larger companies have a form for this. It's sometimes called a "one-time deduction request" or "special payroll deduction." The advantage is you don't have to remember to change your W-4 back later, and you can handle the entire under-withholding issue in one shot instead of spread across multiple paychecks. Just make sure to keep a copy of whatever form you submit and follow up to confirm it was processed correctly!

Echoing this! I set a calendar reminder for February 15th every year to redo the withholding calculator. Tax brackets adjust annually for inflation, plus life changes like raises, new dependents, etc. can all impact your needs.

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 bringing this up! I didn't even think about quarterly taxes. How do you calculate how much you need to pay each quarter? Is there a minimum threshold before you have to start doing that?

You generally need to pay quarterly estimated taxes if you expect to owe at least $1,000 in taxes for the year after subtracting withholdings and credits. The IRS has a "safe harbor" rule where you won't face penalties if you pay at least 90% of the current year's tax liability or 100% of the previous year's tax (110% if your AGI was over $150,000). For calculating the amount, you'd take your expected crypto income, combine it with any other self-employment income, then calculate the tax (including self-employment tax) and divide by four for each quarter. The deadlines are April 15, June 15, September 15, and January 15 of the following year.

Can you really deduct part of your phone bill? How would you even calculate what percentage is used for mining vs regular use? I'm using one of these apps too but it seems hard to document.

Thanks for mentioning the form! Quick question - is it Form 8832 or did you mean something else? I've been looking online and Form 8832 seems to be related to business entity classification, not childcare expenses. Is there a different form number I should be asking my son's Montessori for?

You're absolutely right, I made a mistake with the form number. I meant to say that you should get documentation from the childcare provider, which is typically reported on Form 2441, not 8832. Most providers will give you a receipt or year-end statement with their tax ID (EIN) and the total amount you paid during the year. Some providers will complete Form W-10 (Dependent Care Provider's Identification and Certification) which gives you their official information for tax purposes. That's what you'll need when completing Form 2441 to claim the Child and Dependent Care Credit. Thanks for catching my error!

Yes! I successfully did this last year. The key is that you must have custody for more than half the nights of the year to claim the Dependent Care Credit, even if your ex claims the child as a dependent due to your agreement. I had to paper file though, because TurboTax kept giving me errors when I tried to enter it this way.