Thanks so much for this! One question - my daughter lives with me 100% of the time, but her dad keeps claiming he's "entitled" to claim her some years because he pays child support. Is that true? The custody agreement doesn't mention taxes at all.

Child support payments do NOT give someone the right to claim a child as a dependent. The IRS has very specific tests for who can claim a child, and the main one is where the child lived for more than half the year (the residency test). If your daughter lives with you 100% of the time, you are the qualifying parent. Your ex might be thinking of the "dependent exemption release" (Form 8332) where the custodial parent can voluntarily release their claim to the non-custodial parent. But this is completely voluntary - you don't have to do this unless it's specified in your custody agreement. No custody agreement means you, as the parent with 100% physical custody, have the right to claim your child.

Did they end up penalizing your ex for filing incorrectly? I'm wondering if there are any consequences for the person who's been claiming my kid.

Yes, they did eventually! The IRS sent him a notice disallowing the child tax credit and earned income credit he'd claimed. He had to pay back all of that money plus interest and a 20% accuracy-related penalty. It took about 14 months from when I filed my paper return with documentation, but the IRS did resolve it in my favor. I also found out he'd been doing this for 3 years, so they went back and audited his previous returns too. Expensive lesson for him!

How often do you need to document shareholder meetings if you're the only owner? Is that even necessary for a single-member S Corp? Seems like excessive paperwork.

Yes, it's still necessary even as a single owner! I hold and document quarterly meetings with myself (sounds ridiculous, but it's important) and maintain a corporate minute book. My accountant advised doing this because maintaining the corporate veil is critical - if you're ever challenged, you need to show you're treating the business as a separate entity. The documentation doesn't need to be complex, but should demonstrate you're making business decisions as a corporation rather than as an individual. This includes formally approving major purchases, loans, salary changes, etc. Many single-owner S Corps get sloppy with this paperwork and it can create real problems during an audit.

This is actually a common misconception. S Corp shareholders who own more than 2% can still deduct health insurance premiums on their personal returns (Form 1040) as an adjustment to income, so it ends up being a wash tax-wise in most cases. You just can't deduct it directly on the S Corp return.

Do you write any additional info on the receipts? Sometimes I get receipts that aren't clear what they were for.

Great question! Yes, I absolutely write notes on any vague receipts right away while the purchase is still fresh in my mind. For business meals, I jot down who I met with and the business purpose. For supplies or other purchases, I note what project they were for. I also staple any relevant info together - like if I have an email approving a business expense, I'll print and staple it to the receipt. Makes it much easier to justify deductions if you're ever questioned about them.

I use QuickBooks for my small business and the receipt capture feature is decent. You take pics in the app and it attaches them to transactions. Not perfect but integrates well if you're already in that ecosystem.

Did you try writing off the furniture for the patio instead of the construction? Like outdoor tables or chairs used for client meetings? Wondering if that would be treated differently.

Yes, I was able to deduct the outdoor furniture since it was clearly business-related and doesn't add permanent value to the home. The IRS treats movable business assets differently than permanent improvements. The agent actually suggested keeping a log of client meetings to demonstrate business use of those assets. Furniture is typically depreciated over 7 years for business use, but depending on cost you might be able to use Section 179 to deduct it all in one year. Definitely different than trying to deduct the actual construction of the deck or patio.

I've claimed it for 3 years without issue. Just make sure the space is exclusively used for business. Take pictures too. Mine is about 12% of my total square footage and I deduct that percentage of utilities, insurance, etc.

I've thought about it but wasn't sure if my situation warranted a CPA. Would you mind sharing roughly what you paid for that service? And did they help specifically with tax-loss harvesting strategies or more general tax planning?

I paid around $350 for the initial consultation and tax plan development, and then about $400 for each year's tax return preparation. Considering he saved me over $8,000 in taxes through better loss harvesting strategies and finding missed deductions, it was absolutely worth it. He specifically helped with creating a tax-loss harvesting strategy across multiple years, identifying which specific investments to sell when, and properly documenting everything for the IRS. He also advised on how to structure my investments going forward to be more tax-efficient. For someone with $207k in losses like you have, the potential tax savings would likely be much higher than what I experienced.

Not OP, but I'm guessing crypto or maybe options trading. Those are usually the culprits when you see wild swings like $267k gain followed by $210k loss. Regular stock investing rarely produces that kind of volatility unless you're heavily concentrated in a few speculative stocks.

It was a combination of factors. I had a concentrated position in a few tech stocks that did extremely well in 2022, and I got overconfident. In 2023, I started trading options with larger positions than I should have, and then doubled down when things started going south. I also had some crypto that crashed. The perfect storm basically. I've definitely learned my lesson about diversification and position sizing. I'm working with much smaller position sizes now and have moved a significant portion of my portfolio to index funds. Still have some individual stocks but with strict limits on how much I allocate to any single position.