The Recovery Rebate Credit was for tax years 2020 and 2021. It wouldn't apply to 2024 returns filed this year unless they're filing an amended return for those years.

Could you explain a bit more about the difference between employee and employer contributions when it's just me? I'm a bit confused about how I can be both when I'm a sole proprietor.

When you're self-employed, you act as both the employee and the employer for retirement contribution purposes, even though it's just you. As the "employee," you can contribute up to $22,500 for 2023 (or $30,000 if you're over 50) from your compensation. As the "employer," you can also make an additional profit-sharing contribution of up to 25% of your net self-employment income (after deducting both business expenses and half of your self-employment tax). This dual contribution ability is what makes Solo 401ks so powerful for self-employed individuals - you can potentially put away much more than with other retirement options like SEP IRAs.

I've used both. SEP IRAs are definitely simpler to set up, but Solo 401ks usually let you contribute more overall. Neither one reduces self-employment tax though. The main advantage of a Solo 401k is you can make both employer and employee contributions, while SEP IRAs only allow employer contributions.

17 Which states actually have these lower estate tax thresholds? Is there a simple list somewhere? My parents have property in multiple states and I'm trying to figure out if this is something we need to worry about.

3 As of 2023, the states with estate taxes are: Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, Washington, and the District of Columbia. The exemption thresholds range from around $1 million (Massachusetts, Oregon) to $9.1 million (Connecticut). Some states also have inheritance taxes, which are different - they're based on who receives the assets rather than the total estate value. Those states are Iowa, Kentucky, Maryland, Nebraska, New Jersey, and Pennsylvania. Maryland actually has both types of taxes! If your parents have property in multiple states, you definitely need to look into each state's rules. The concept of "domicile" becomes really important in determining which state's laws apply.

8 Yes, you would be personally liable in two ways. First, as the executor, you have a fiduciary duty to handle the estate properly, which includes paying taxes before distributions. Second, as a beneficiary receiving assets from a taxable estate, you have transferee liability for your proportionate share of estate taxes. The IRS can come after you both as the executor who failed to ensure taxes were paid and as the beneficiary who received assets that should have been used to pay taxes. I strongly recommend getting professional help with this situation to avoid serious personal liability.

This is a really interesting angle I hadn't considered! We definitely have tons of texts and some emails where we specifically talk about everyone "investing" in the house and building equity together. We even had a spreadsheet we updated monthly showing everyone's contributions. Would those help establish this kind of arrangement?

Those texts, emails and especially that spreadsheet would be extremely helpful evidence! That's exactly the kind of documentation that can establish an equitable interest or informal partnership arrangement. The spreadsheet showing contributions is particularly valuable since it demonstrates an ongoing system of tracking "ownership" percentages. When I went through this, my accountant advised bringing all this documentation together, then drafting a simple letter documenting the original intent of the arrangement and how the proceeds distribution reflects each person's contributions. This creates a paper trail showing this isn't a random gift but rather the conclusion of a documented investment arrangement.

Wouldn't issuing 1099s mean they'd have to pay income tax on the money though? That seems worse than just filing a gift tax return where no actual tax is owed (assuming below the lifetime limit). Did your roommates have to pay taxes on those distributions?

8 Oh my gosh I think I made this exact mistake last year! I earned about $7,000 from my summer job and my campus job combined, and I thought that meant my parents couldn't claim me. But I was a full-time student... so does that mean they actually could have claimed me? Should we file an amendment?

22 You're right that you might have misunderstood the rules. For full-time students under 24, the income limit is much higher, and the $4,500 limit doesn't apply in the same way. Your parents likely could have claimed you if they provided more than half your support, regardless of your $7,000 earnings. Whether you should amend depends on several factors. First, check if your parents actually claimed you on their return last year. If they didn't, there might not be a conflict to resolve. If there is a discrepancy, you should consider amending if it would result in a meaningful tax benefit for your family overall. The lookback period for amendments is generally three years, so you have time to correct it if needed.

16 I used TurboTax last year for a similar situation (19, college student). Their questionnaire is decent but not great for more complicated situations. If your situation is straightforward, the free version will work, but they'll try to upsell you if you have education credits. Honestly, I'd recommend using the IRS Free File options instead - same questionnaire style but completely free. TurboTax charged me an extra $40 halfway through when I needed to add a form for my scholarship.