Thanks so much for this reassurance! I'm still a bit nervous about taking the deduction without photos. For the documentation you mentioned - would a detailed written description with measurements and a hand-drawn floor plan be sufficient? Or should I try to find other proof like emails sent from that workspace?

A detailed written description with measurements and a hand-drawn floor plan is absolutely sufficient documentation. Date it and keep it with your tax records. Including details about the built-in desk, the three walls forming the alcove, and how you used the space for specific business activities strengthens your case. Adding some supporting evidence like business emails, client invoices you created there, or phone records showing client calls would be helpful supplementary documentation, but not strictly necessary. The IRS understands that people move and may not have photographs of previous spaces. Your contemporaneous written records are considered valid documentation, especially when they're detailed and consistent with your business activities.

TurboTax Self-Employed version handles home office deductions pretty well. It walks you through all the questions and helps calculate both the regular and simplified methods. I've used it for the past 3 years with no problems. Just make sure you get the Self-Employed version, not the regular one.

Thank you so much! This breakdown is super helpful. Quick follow-up though - for the actual amount of withholding, should I be using what was initially withheld ($78k) or the net amount after they already got that partial refund through the T2062 process?

You should use the net amount after the partial refund. So if $78k was initially withheld but $22k was already refunded based on the T2062 adjustment, you'd report $56k on line 43700 as the withholding tax amount. The CRA system should already have a record of both the initial withholding and the T2062 adjustment, but I always recommend including a brief note with the return explaining these amounts to avoid any confusion during processing.

For non-residents, you don't need to file a separate provincial tax return. The federal T1-NR handles both federal and provincial taxation. Non-residents pay a flat 25% federal tax on taxable Canadian property, with no separate provincial component. Just make sure you're correctly identifying the property's location on the return since this affects CRA's internal processing, but you won't need to complete any provincial-specific forms for a non-resident property sale.

That's really practical advice, thank you! Do you happen to have a link to these donation value guides? And what level of detail do you go into for categories? Like do you just say "men's shirts" or do you break it down further into "men's t-shirts" vs "men's dress shirts"?

Salvation Army's valuation guide is here: https://satruck.org/Home/DonationValueGuide and Goodwill has one but it varies slightly by region. I definitely recommend breaking categories down to a reasonable level - not just "men's shirts" but "men's t-shirts" vs "men's dress shirts" vs "men's polos" since they have different values. Same with women's clothing, children's items, etc. For household goods, I separate by room (kitchen, bathroom, decor). The key is finding the balance between being thorough without making it impossibly detailed. Taking photos of sorted piles with your phone works great as backup documentation. I've been through two minor IRS inquiries about my donations over the years and this system held up both times.

This is why I barely claim any donations anymore. The documentation requirements are insane and it's not worth the risk. I donate tons of stuff but usually just claim a token amount like $500 for the year. Peace of mind is worth more than the tax savings to me.

Thanks so much for breaking down those method codes! That makes much more sense now. So if I understand correctly, my desk and MacBook were essentially "fully depreciated" for federal purposes in the first year because of the 100% bonus, but for California they're still on their regular depreciation schedules? When I enter these as existing assets in FreeTaxUSA, do I need to enter different prior depreciation amounts for federal vs state? Or does the software handle that difference automatically?

Yes, you've got it exactly right! For federal purposes, your desk and MacBook were fully depreciated in the first year thanks to 100% bonus depreciation available in 2022. But for California, they're following their normal depreciation schedules over 7 and 5 years respectively. FreeTaxUSA should handle the federal vs state difference automatically once you input the correct information. You'll want to enter the assets with their original acquisition dates, costs, and depreciation methods. For "prior depreciation," enter the cumulative federal depreciation taken to date (which would be the full amount for the desk and MacBook, and the partial amount for the iPhone). The software will then apply the correct state adjustments automatically. If you want to double-check the calculations, the state return should include a specific form showing the depreciation differences between federal and California.

This is super important! I messed up my taxes last year because I didn't realize the rates change throughout the depreciation period. Is there an easy calculator anywhere that shows what the percentage should be for each year?

If you put zeros in Parts 1 and 2, do you need to do any calculations or just literally put 0 in each box? And have you ever been audited or questioned about your Roth withdrawals?

You just put a zero in each box, no calculations needed for parts that don't apply to your situation. It's just to show you didn't accidentally skip that section. I've never been audited specifically about my Roth IRA withdrawals. I did get a general review letter once about three years ago, but it was about something completely different (they questioned some business deductions). My Roth withdrawal reporting with the zeros-not-blanks approach has never been flagged in the 12 years I've been doing it this way.

In my experience, let the software do its thing. TurboTax is programmed to complete forms correctly based on your inputs. If it's filling parts 1 and 2, it's probably putting zeros or calculating something based on your overall tax situation that might be relevant. Tax software is designed to handle these nuances.