I tried this approach last year but got burned by wash sale rules when I tried to buy back similar investments after selling for losses. Any tips on avoiding that pitfall while still maintaining market exposure?

The key to avoiding wash sale issues is to sell investments at a loss and then buy something similar but not "substantially identical" to maintain your market exposure. For example, if you sell an S&P 500 index fund from one provider at a loss, you could immediately buy an ETF that tracks a different but similar index (like a total US market ETF) to maintain similar exposure without triggering wash sale rules. Another approach is to use the 31-day waiting period strategically. You could sell the underwater investment, move temporarily into a broader market fund for 31 days, then move back into your preferred investment afterward. The temporary investment gives you market exposure during the waiting period. This works well if you're rebalancing anyway or if you're willing to accept a slightly different allocation for a month.

This is actually a really important point that many people miss. It depends heavily on your investment timeline and the performance difference between your current funds and the ETFs you're considering. If your active funds consistently outperform the ETFs by even a small margin, that could outweigh the tax efficiency advantage.

Yes, we did call the police first! They came out and documented it, put one of those orange stickers on it, and told us we needed to wait 72 hours before having it towed. We followed all the proper channels. The police report actually said the car was reported stolen in another county, but for some reason the towing company still charged us because they said the owner didn't come claim it and they had storage fees.

That's good to hear! Since you followed the proper legal procedures, the expense would definitely qualify as an ordinary and necessary business expense for your rental activity. When you list it on your Schedule E, I recommend noting that proper procedures were followed and that it was necessary to maintain access to the property. While you probably won't need to provide that detail unless audited, it's good documentation to have.

The de minimis safe harbor election does simplify recordkeeping, but you still need to keep receipts! What it really does is allow you to immediately deduct small-cost items (generally under $2,500 per item or invoice) rather than having to capitalize and depreciate them. For example, if you buy a $200 microwave for your rental unit, you can deduct it immediately rather than depreciating it over several years. But you absolutely should keep those receipts - they're your proof if audited. The safe harbor is about how you treat the expenses, not whether you need documentation.

Thanks for this clear explanation! So even though he pays for a lot of their expenses, the relationship test is a hard requirement? Would we need to amend both our returns now, or just his?

The relationship test is absolutely a hard requirement that can't be worked around just with financial support. The IRS is very clear on this point. You'll need to amend your fiancé's return to remove the children as dependents. You should also file or amend your return to claim them if you're eligible (meet the tests for claiming your own children). This should resolve the issue with the IRS, though you might still face some penalties or interest if there was a significant underpayment on your fiancé's original return.

What about common law marriage states? Would that change anything in this situation?

Do VITA volunteers know how to handle gig worker income? I drove for Uber last year and also did some DoorDash. Not sure if that's too complicated for the free service.

Yes, most VITA sites can definitely handle gig worker income like Uber and DoorDash! That falls under Schedule C (self-employment) income, which most VITA volunteers are trained to prepare. Just make sure to bring all your documents - your 1099s from the platforms, a record of your mileage (this is a big deduction!), and any other business expenses like your cell phone bill portion used for the apps. Not all VITA sites handle all forms though, so when you call to make an appointment, specifically mention you have gig work income to confirm they can help with that.

I second FreeTaxUSA! Used it last year after TurboTax tried to charge me $89 for having an HSA. FreeTaxUSA handled everything perfectly - even my crypto transactions and home office deduction. Their customer service was surprisingly good too when I had a question about my state return.

This is what I did last year. Had about 10k in stock gains, maxed out my traditional IRA contribution for $6,500 which lowered my taxable income. Didn't eliminate the capital gains tax but my overall tax bill was lower. Every bit helps.

I actually haven't maxed out my 401k this year! Been too focused on my brokerage account since that's where I've been seeing better returns. But you're right, I should probably look at the tax advantages too. My company does a 5% match so I'm definitely leaving money on the table. Thanks for bringing this up - sometimes the obvious solutions get overlooked when you're trying to find clever tax hacks.

I'm in California (ouch) and in the 22% federal bracket based on my job income. Most of my gains are long-term thankfully, but I did have a few quick trades that'll be hit with short-term rates. I've been thinking about moving to a no-income-tax state at some point, but for now I'm stuck with CA's rates on top of federal. It's a double whammy.