How do you calculate the right amount for those quarterly payments? Do you just look at how much you owed the previous year and divide by 4? I'm worried about still getting the calculation wrong.

I look at how much we owed the previous year as a starting point. Then I divide by 4 for each quarterly payment. If your income is fairly stable year to year, this works well. For example, if you owed $2,400 last year, you'd make four $600 quarterly payments. The IRS has a "safe harbor" rule where if you pay at least 100% of last year's tax liability (or 110% if your income is over $150,000), you won't get hit with underpayment penalties even if you end up owing more.

Wouldn't checking the multiple jobs box AND adding extra withholding be too much? Isn't the box supposed to handle the two incomes problem already?

Thanks for the insight! Does FreeTaxUSA handle crypto transactions well? That's one area where TurboTax was actually pretty good, but not worth the price they're charging now.

FreeTaxUSA does handle crypto transactions, but it's more manual than TurboTax. You'll need to enter your transactions yourself if you have a lot of them, since they don't have the same direct import features as TurboTax. The upside is they don't charge extra for crypto reporting like TurboTax does with their forced premium upgrade. If you have your transaction history in a spreadsheet format, it's pretty straightforward to enter. Just be prepared to spend a little more time on it compared to TurboTax's automated imports.

Did FreeTaxUSA make you pay extra for any "premium" features? That's what always gets me with TurboTax - they lure you in then hit you with upgrade fees for basically everything.

So does this mean your student's income DID count toward PTC household income once you filed their return? Or were they still exempt from household income because they were below the filing requirement threshold, even though you voluntarily filed? This distinction seems really important.

Their income remained exempt from the household income calculation for Premium Tax Credit purposes. The key is that they were below the filing requirement thresholds ($12,950 for earned income and $1,250 for unearned income), so even though we voluntarily filed a return, their income didn't have to be included in the PTC household calculation. The IRS looks at whether they were required to file, not whether they actually filed. This is an important distinction that many tax software programs don't explain well. So we got the benefit of claiming the American Opportunity Credit without any negative impact on our Premium Tax Credit.

Good question! For Additional Child Tax Credit purposes, earned income refers to wages, salaries, tips, self-employment income, and certain disability benefits. Work-study income does count as earned income because it's reported on a W-2 as wages. However, the confusion might be because you're thinking of the Earned Income Tax Credit (EITC), which has its own specific definition of earned income. For the Additional Child Tax Credit, what matters is having at least $2,500 of earned income to begin qualifying, but the credit amount is based on your overall tax situation, not just earned income.

Thanks for clearing that up! I was totally mixing up ACTC requirements with EITC. That makes much more sense now. So if I understand right, the parent needs earned income to qualify for ACTC, but the scholarship question is more about how it affects household income for Premium Tax Credit, not whether it counts for the ACTC calculation itself?

I heard businesses with inventory HAVE to use accrual. Is that true? I'm planning to sell handmade jewelry through my LLC and will have some materials on hand.

That's super helpful! My business will be mostly project-based digital marketing with clients paying after work is completed, usually within 30 days. No inventory really, just my time and some software subscriptions. So it sounds like cash would be simpler to start with?

For a project-based digital marketing business with 30-day payment terms and no inventory, cash accounting would absolutely be simpler to start with. It'll align better with your actual cash flow (which is what you really care about when you're starting out), and the record-keeping is much more straightforward. You'll just record income when clients actually pay you, which makes tax planning easier too. If your business model changes significantly down the road or you grow substantially, you can always reconsider, but cash accounting is the right choice for your situation now.

Thanks for bringing this up! Do you have any recommendations for finding good commercial insurance for a camper rental? And approximately how much should I expect to pay compared to regular insurance?

I recommend talking to an independent insurance broker who handles both personal and commercial policies. They can shop around for the best coverage for your specific situation. Commercial insurance for a rental camper will definitely cost more than personal insurance - probably 1.5 to 2 times as much. The exact cost depends on factors like the value of your camper, your location, coverage limits, and how many days you rent it out. Make sure the policy specifically covers peer-to-peer rentals, as some commercial policies are designed for full-time rental businesses and might not be appropriate for your mixed-use situation.

This is such an important point. My neighbor tried to run an equipment rental business from his home and got shut down by the HOA and city zoning department. Cost him thousands in fines and legal fees.