That's really good advice. I think I have most of my contribution records in old emails, but should I also request official documentation from my financial institution to be safe?

Absolutely get official documentation if you can. Year-end statements are great because they often summarize annual contributions. Some institutions also provide specific tax forms or contribution confirmations. If they offer any kind of contribution history report, definitely request that. Email confirmations are good supplementary evidence, but official statements directly from the institution carry more weight if there's ever a question. The more documentation you have, the better, especially for older contributions that might be harder to verify years later.

I tried that with Vanguard last year and they refused to change the code. They said their policy is to use code 1 for all early distributions and it's up to the taxpayer to claim any exceptions on their tax return. Super annoying but apparently common practice.

That's super helpful! I didn't realize I could estimate and amend later. I do have most of my insurance EOBs and could probably get the pharmacy summaries easily. Would bank statements showing payments to medical providers be acceptable if I can't get the detailed receipts?

Bank statements can be supporting documentation, but they're not ideal on their own since they don't show what the payment was specifically for. The IRS wants to know that the expenses were medically necessary and not for something like cosmetic procedures. Your best approach is to use the EOBs from your insurance company - they typically show both what was covered and what you paid out of pocket. Most insurance providers have online portals where you can download a full year's worth of statements. Also contact your pharmacies for medication summaries, which they can usually provide immediately. Between those two sources, you might account for 80-90% of your expenses without much hassle.

I second this! I have a chronic condition too and didn't realize I could deduct all the travel to specialists (400 miles round trip several times a year). Also deducted my CPAP supplies, air filter for allergies (with doctor's note), and even the portion of my utilities for the medical equipment. Added about $3k to my deduction!

Can you explain this with an example? I'm not sure I understand how the math works out.

Sure! Let's say you bought stock for $1,000 several years ago, and now it's worth $2,500. If you sold it, you'd pay capital gains tax on the $1,500 profit - which might be $225 if you're in the 15% capital gains bracket. Instead, if you donate that stock directly to charity, two things happen: First, you get a deduction for the full $2,500 current value (if you itemize). Second, you completely avoid paying the $225 in capital gains tax you would have owed if you sold it. So compared to selling the stock and donating cash, you save an extra $225 in taxes.

Unfortunately, that special provision expired. During the pandemic, the CARES Act allowed people to deduct up to $300 ($600 for married couples) in charitable donations without itemizing. But that was temporary and is no longer available for current tax years. For 2025, you'll need to itemize deductions to get any tax benefit from charitable giving. That said, it's always worth checking for new tax laws as we get closer to filing season, as Congress occasionally introduces new provisions.

You absolutely cannot ignore it! The IRS receives a copy of every 1099-K, and their systems automatically match them to your tax ID. If you don't account for it somehow on your return, you'll likely get a CP2000 notice (automated underreporting notice) which is basically the IRS saying "hey, we think you didn't report all your income." The correct approach is to report it and then exclude it with an explanation. Most tax software (including CashApp Taxes) has a way to indicate the money isn't taxable income. This satisfies the reporting requirement while ensuring you don't pay taxes on money that isn't actually income.

Thanks for explaining! That makes sense about the IRS matching the forms. So better to report it with the explanation than to trigger an automatic flag in their system. I'll make sure to include it in CashApp Taxes and check that box saying it's not taxable income.

I managed to get Square to issue a corrected 1099-K last year, but it took persistence. The key was escalating beyond the first-level support. I had to specifically request to speak with their tax reporting department. It took about 6 weeks, but they eventually issued a corrected form. In the meantime, I filed my taxes as others here suggested - reporting the 1099-K but indicating the amounts weren't taxable. That way if the correction never came, my taxes were still accurate.

How detailed do you get with tracking? Do you need to show specific clients that came from specific ads? I'm not very organized with this stuff.

You don't need to get super granular with connecting specific clients to specific ad campaigns, but having general data is helpful. I use Facebook's conversion tracking pixel on my website and then keep a simple spreadsheet that shows monthly ad spend, number of leads generated, and clients that resulted. The key is showing that your marketing expenses have a legitimate business purpose and aren't personal. Even basic tracking is better than nothing. When I started, I just asked new clients "how did you find me?" and kept notes. Now I use more sophisticated tools, but both approaches work for establishing the business connection.

The receipts are most important, but I also take screenshots of my active campaigns and save them in a folder. My accountant said receipts prove the expense, but screenshots of the ads help prove they were for business if questioned.