Oh man, I didn't even think about state taxes! They're in Pennsylvania - any idea what the rate would be there?

Pennsylvania has a flat income tax rate of 3.07% that applies to capital gains too. So your in-laws would pay that on top of the federal 15%. It's lower than many states, but still adds up. Make sure they account for both state and federal taxes in their calculations. There's no special capital gains rate in PA - it's just treated as ordinary income at the state level. They'll need to report it on both their federal and state tax returns next year.

Wait that's super helpful! I sold my cabin last year and my accountant never mentioned adding the original closing costs to my basis. Can I still amend my return from last year to include those?

That's actually a really good point that I hadn't considered. We've been together for three years and have talked openly about finances, but I don't want her to feel like she's losing her independence. Maybe we should establish a more formal agreement about expectations during this period. Do you have any specific suggestions for how to structure this kind of temporary support without creating weird dynamics?

In my experience, having a specific timeframe and budget helps a lot. Maybe sit down together and create a temporary "support plan" with an end date or specific milestone (like when she finds a new job). For the actual mechanics, consider a joint account specifically for shared expenses that you both have access to, rather than just depositing into her personal account. That way it feels more like a shared resource than "your money." And definitely have regular check-ins about how you both feel about the arrangement - these things can create resentment if not discussed openly.

This is a really important point. I'm a bookkeeper and I've seen self-employed clients get in trouble for poor cash withdrawal documentation. Make sure you're recording these as owner's draws or distributions, not as business expenses!

Thanks for this suggestion! Unfortunately my state doesn't have paid family leave, and my company is definitely too small for FMLA (we only have 12 employees). I did check into short-term disability but was told I would have needed to enroll before becoming pregnant. It's frustrating how few options there are for maternity leave in small businesses.

That's really tough. Another option might be to negotiate a flexible arrangement with your employer that doesn't involve unemployment fraud. Maybe you could work reduced hours remotely during part of your leave, use any accumulated PTO, or spread a reduced salary over a longer period. Many small businesses work out these kinds of arrangements. Remember that while what they're suggesting might seem helpful, they're asking you to take all the risk. If unemployment investigates (which they often do), you'd be the one who filled out a fraudulent application, not your employer.

What did you end up doing instead? I'm in a similar situation now and feel stuck between no income or doing something that might be illegal.

10 How did the IRS know you were only using it 30% for business? Did they just look at your mileage log, or did they have other ways of figuring it out?

22 The IRS asked for my mileage log during the audit, and I had only kept sporadic records. They compared the total miles on the vehicle to the business miles I could document, and it came out to around 30%. They also looked at my appointment calendar and client locations to verify whether my claimed business trips were legitimate. The auditor explained that without a contemporaneous mileage log (meaning one kept at the time of travel, not created later), they default to assuming more personal use. The burden of proof is entirely on you as the taxpayer to demonstrate business usage. Without proper documentation, you'll lose the deduction every time.

2 Bonus depreciation is different from Section 179 in a few key ways. For 2024, bonus depreciation is at 60% (down from 80% in 2023), and will drop to 40% in 2025. Unlike Section 179, bonus depreciation CAN create a loss for your business, which might be beneficial depending on your situation. For vehicles above 6,000 lbs, you could potentially get a larger first-year deduction using a combination of Section 179 (up to $27,000) and bonus depreciation on the remaining basis. For vehicles under 6,000 lbs, the luxury auto limits still apply even with bonus depreciation.

Would driving for Uber on weekends count as side work? I started doing that to make extra cash. Do I need to keep track of my mileage and car expenses?

Yes, driving for Uber definitely counts as self-employment/side work! You'll receive a 1099 form from Uber (most likely a 1099-K) reporting your earnings. You'll report this income on Schedule C, and this is where you CAN deduct expenses. For driving, you have two options for deducting vehicle expenses: the standard mileage rate (which will be around 67 cents per mile for 2025) OR actual expenses (gas, maintenance, depreciation, etc.). Most Uber drivers find the standard mileage rate easier and often more beneficial. Just make sure you keep a detailed log of your business miles!

You would only want to itemize deductions if your total eligible itemized deductions exceed the standard deduction amount. For 2025, that's $14,350 for single filers and $28,700 for married filing jointly as you mentioned. Common itemized deductions include mortgage interest, state and local taxes (limited to $10,000), charitable contributions, and certain medical expenses that exceed 7.5% of your adjusted gross income. If adding all these up gives you more than the standard deduction, then itemizing makes sense. Otherwise, take the standard deduction.

Thanks for explaining! Our mortgage interest is only about $8,000, state taxes maybe $6,000, and we donate like $2,000 to charity. So we're at $16,000 total which is way less than the $28,700 standard deduction. Standard deduction it is!