That's really disappointing to hear but makes a lot of sense. Do you know if there's anything Virginia residents can do to push for inclusion in the program? Should we be contacting state representatives or something?

Yes, contacting your state representatives is definitely the most effective approach. Let them know you want Virginia to join the IRS Direct File program for the next tax season. Specific requests like this can gain traction, especially if many constituents express interest. Additionally, you can submit feedback directly to the IRS about your interest in having the program expanded to Virginia. While the IRS doesn't make the final decision on state participation, documented public interest helps build the case for expansion.

I used FreeTaxUSA last year and the federal was completely free, but they charged about $15 for state filing. Still way cheaper than TurboTax or H&R Block though! I think some of the other IRS Free File partners might offer free state filing if your income is under a certain amount (maybe $73k?).

Thank you for mentioning this! I do teach some students from my home studio. Is it only the specific room I teach in that counts, or can I include waiting areas where parents sit during lessons too?

You can include any space that's used exclusively for your business. So if you have a dedicated teaching room plus a waiting area that's only used for your students/parents, both areas count. However, if the waiting area is also your living room that you use personally, then you can only count the dedicated teaching space. The key is "exclusive use" - the IRS is pretty strict about this. Take clear measurements and photos of the space for your records too. Your CPA will appreciate having exact numbers rather than rough estimates.

I use a simple receipt book for cash payments. Write two copies - one for the student, one for me. Then I log everything in a spreadsheet once a week. Not fancy but keeps me organized and looks professional to parents!

Be careful with recording conversations! Depending on your state, you might need the other person's consent to record them. Some states require both parties to consent to being recorded.

Good point, hadn't thought about the legal issues with recording. I'll stick with taking notes after the meeting.

That's a really good point I hadn't considered. So I should be tracking these early expenses separately as startup costs? Does that change what documentation I need to keep?

Yes, definitely track these early expenses separately as startup costs. The documentation requirements are the same (receipt, who you met with, business purpose), but the way you'll claim them on your tax forms will be different. Keep a clear record showing these expenses were incurred before your official launch date. This helps establish that they're truly startup costs. Once your charity is fully incorporated and operational, you'll want to have a clean break in your accounting to show when regular operational expenses began. This distinction can be important if you're ever audited.

That's really helpful! Is there specific wording you found works best for digital advertising design services? I'm trying to be as clear as possible on my contracts and invoices.

I found that "Professional advertising design services" works well as a consistent description. It emphasizes the service aspect rather than the deliverable. My lawyer suggested avoiding terms like "digital products," "digital goods," or anything that implies you're selling a product rather than a service. On invoices, I break down the work as "Professional advertising design and consulting services for social media campaigns" rather than just "Social media ads" or "Digital content." The more you emphasize the custom service nature of your work, the stronger your position that you're providing a professional service rather than selling digital goods.

Do you have to file sales tax returns even if you collect $0 in sales tax? That seems like a waste of time.

I actually tried that first! The financial aid office told me they only issue 1098-Ts for degree-seeking students, not for certificate programs like the pharmacy tech one. When I pressed them on it, they said something about certificate programs not meeting the federal requirements for the form, but that I could still claim the expenses on my taxes without it. That's exactly why I'm so confused - they won't give me the form but say I can still claim the expenses somehow. Was hoping someone here had been through something similar.

Ah, that makes sense. I wasn't aware that certificate programs were treated differently. After some research, it seems schools actually aren't required to provide 1098-Ts for non-degree programs, even though the expenses might still qualify for education credits. In your case, I'd go with the advice others have given about manually entering the expenses. Keep all your receipts and course enrollment documents handy in case of questions later. The Lifetime Learning Credit should work perfectly for your situation.

This is really important! I claimed expenses for a certificate program that turned out not to be from an eligible institution, and I got a notice from the IRS later. Had to repay the credit plus a small penalty. Definitely check the Federal School Code first!