That's a really good point about state requirements. I'm in Colorado - does anyone know if there are specific requirements here I should watch out for? And what's the difference between SEP IRA vs Solo 401k in terms of setup complexity in TurboTax?

Colorado has an annual report requirement called a "Periodic Report" that costs $10 to file online. It's due in the anniversary month of your LLC's formation. It's not a tax form, but a filing with the Secretary of State's office to keep your LLC in good standing. TurboTax won't remind you about this. For retirement accounts, a SEP IRA is simpler to set up in TurboTax - just a few questions and you're done. A Solo 401k gives you potentially higher contribution limits, especially if you want to make both employer and employee contributions, but requires more paperwork outside of TurboTax and you'll need to file Form 5500-EZ once your balance exceeds $250,000. For your income level, a SEP IRA is probably simpler to start with.

I had a similar issue but fixed it by making sure I was completely exiting the program properly (not just closing the window). Also, make sure your Mac isn't going into any kind of deep sleep mode between sessions. I started using the save feature obsessively after losing data once - hit save after every major section.

Is the Credit for Other Dependents the same as the Foreign Dependent Credit mentioned earlier? Or are these two different credits I could potentially claim? And would my children still need to meet the residency test to qualify for this credit?

The Credit for Other Dependents is the official name of what some people call the Foreign Dependent Credit. They're the same thing - a $500 credit for dependents who don't qualify for the full Child Tax Credit. This is exactly what was created for situations like yours. No, your children don't need to meet the US residency test for this credit, which is why it works for dependents living abroad. They still need to qualify as your dependents under tax law, meaning you provide more than half their support. You'll claim this on your Form 1040 in the same section where the Child Tax Credit would be, but you'll indicate they qualify for this $500 credit instead.

That's incorrect advice and could get you in trouble. The IRS residency test requires the child to have the same principal residence as the taxpayer for more than half the year (183+ days). A 31-day visit doesn't meet this requirement.

This is SUPER helpful, thank you! I've been trying to find these specific steps. One more question - do I also report the $6000 contribution somewhere else, or is Form 8606 the only place I need to show it?

Form 8606 is the primary place to report the nondeductible Traditional IRA contribution. You don't claim a deduction for it elsewhere on your return. In TurboTax, you should still go through the IRA contribution section to indicate you made a Traditional IRA contribution, but when asked if you want to deduct it, select "No" (since you're over the income limit for deducting IRA contributions). This should then guide you to Form 8606.

This is why the backdoor Roth is so annoying! All this paperwork for a simple retirement contribution. Makes me wonder if it's even worth it. I make around the same as OP and I've just been investing in a taxable brokerage instead to avoid all these hoops.

This is interesting - does this apply even if the property is unoccupied during renovation? I have a couple properties that sit empty for 2-3 months during renovations before I stage them and list them. Can I deduct those carrying costs as ordinary expenses too?

Yes, it absolutely applies during renovation periods too! The key distinction is whether the property is "held for sale" or "held for production of income" during that time. During active renovation periods for a flip property, the property is considered to be in preparation for sale, so those carrying costs (mortgage interest, property taxes, utilities, insurance, etc.) can generally be deducted as ordinary expenses rather than being capitalized into the basis. This is especially true if you're considered a "dealer" for tax purposes rather than just an investor.

That's a really smart approach! Do you have any issues with the IRS questioning this distinction? I'm worried about having my staging expenses disallowed if audited.

I've been doing this for 6 years now and haven't had any issues with the IRS. The key is documentation and consistency. I keep a clear project timeline for each property that shows when renovation was completed and when staging began. I also make sure my staging invoices are separate from any contractor or renovation invoices, with clear dates. It's also important to have a consistent business practice. I don't try to treat similar expenses differently on different properties. I've developed a written business policy that explains my approach to staging as a marketing expense, which would help demonstrate my intent if ever questioned during an audit.

We don't have any student loans left fortunately, but my wife does have some consulting income on top of her regular job. That's a great idea about accelerating some business purchases - she was planning to upgrade her home office setup in January anyway. Is there a minimum amount of 1099 income needed to make this worthwhile?

There's no minimum threshold for 1099 income to take business deductions. As long as your wife's consulting work is a legitimate business activity (not just a hobby), she can deduct ordinary and necessary business expenses against that income. Since she was already planning the office upgrade, accelerating it into 2023 makes perfect sense. Just make sure the purchases are actually made and put into service before December 31st - ordering isn't enough, you need to receive and start using the items this year. Keep excellent records of the purchases and how they relate to her consulting work.

Donor-advised funds are amazing for tax planning! We did this last year and it worked great. You can even donate appreciated stock directly to the fund and avoid capital gains taxes completely while still getting the full deduction.