Do you use any specific software or method to track this? I'm trying to figure out the best way to separate everything while still filing on one Schedule C.

I use QuickBooks Self-Employed and set up different categories for the income streams. So all income gets tagged as either "Performance Revenue" or "Teaching Revenue" when it comes in. For expenses, I either assign them fully to one activity or split them by percentage if they benefit both parts of the business. It's fairly simple once you set it up. The important thing is consistency throughout the year. I used to try tracking everything in spreadsheets, but it became too time-consuming. Having a system that can generate reports showing the profitability of each activity separately while still maintaining one overall business has been incredibly helpful for both tax purposes and business decisions.

I've used FreeTaxUSA for my two related businesses (web design and digital marketing) and it handles it fine. You just list both activities in the business description field and then enter all income and expenses together. Way cheaper than TurboTax too.

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.

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.

This is super important advice. I learned this the hard way too. Also, don't forget that the self-employment tax rate is 15.3% ON TOP OF your regular income tax. That's why the total bill feels so shocking compared to when you were an employee.

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.