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If I were you, I'd focus on claiming the expenses you CAN legitimately deduct rather than trying to claim her as a dependent. For example, if you paid any qualified education expenses for her, you might be eligible for education credits. Also, if she's living with you next year, make sure she's there from January 1st through December 31st so you can claim her next time around.
Thanks for the suggestion about education credits, but she's not in college right now. I think you're right about making sure she stays the full calendar year for next tax season though. Do I need any specific documentation to prove she's been living with me the whole time?
You don't need specific documentation upfront, but you should keep evidence in case of an audit. Things that help establish residency include mail addressed to her at your home, medical bills, school records, employment records showing your address, state ID with your address, or affidavits from people who can verify she lived with you all year. If she has a driver's license or state ID, having her update the address to yours early in the year provides good documentation. Also keep records of any support you provide like receipts for major purchases, utility bills, etc.
Why is everyone overthinking this? Just ask her to file her own taxes and not check the box that says "Someone can claim me as a dependent." The IRS isn't going to investigate your living arrangements unless there's some obvious red flag.
Here's a tip for next year - if you're dealing with lots of stock transactions, consider using tax software that can import your 1099-B directly from Fidelity. I switched from FreeTaxUSA to TurboTax specifically for this feature and it saved me hours of manual entry. It automatically brings in all transactions, handles wash sales correctly, and fills in all the right boxes. Costs a bit more but completely worth it if you have more than a few investment transactions.
H&R Block's software also has direct import from Fidelity and it's cheaper than TurboTax. I've used it for the past 3 years with no issues. They usually have a mid-tier version that includes investment reporting for around $50 instead of the $100+ that TurboTax charges.
Just to add another perspective on the wash sale question - while small amounts like $0.09 might seem trivial, technically you're supposed to report them exactly as shown on your forms. The IRS systems match your reported numbers against what's submitted by brokerages. If FreeTaxUSA truly only accepts whole dollars (which surprises me), then follow standard rounding rules. But double-check if there's a way to enter cents - sometimes it's not obvious in the interface but is actually possible.
Another option you might consider is TurboTax. I switched from FreeTaxUSA this year specifically because of crypto issues. TurboTax has a partnership with CoinTracker that makes importing crypto transactions much easier. The downside is that TurboTax is more expensive, especially if you need the version that handles investments. But for me, the time saved and peace of mind was worth it. Their system handled my PayPal crypto CSVs without much trouble after I ran them through CoinTracker first.
Does TurboTax charge extra for the crypto feature? I've heard they nickel and dime you for everything.
You need their Premier version which handles investments including crypto. It's about $100 for federal filing (more for state), so definitely more expensive than FreeTaxUSA. The CoinTracker integration is included in that price for basic usage (up to a certain number of transactions), but if you have a lot of crypto activity, you might need to pay for a higher tier of CoinTracker separately. I'm not a fan of how TurboTax structures their pricing either, but in my situation with multiple investment types including crypto, it made sense. For someone with just a few hundred dollars in PayPal crypto transactions, it might be overkill cost-wise.
Maybe I'm old school, but has anyone just tried using a good spreadsheet to organize the PayPal CSV data? I did this last year with about 30 transactions across different platforms. I made columns for date acquired, date sold, cost basis, sale price, and gain/loss. Sorted everything by long vs short term, then just entered the totals into FreeTaxUSA. Took about an hour but didn't cost anything extra.
This is what I've been doing too! Honestly for a few hundred dollars worth of transactions, this seems easiest. I keep a master spreadsheet year-round and just update it whenever I buy/sell. Tax time is super easy then.
Have you considered just using a third-party VAT service like Avalara or Taxamo? They specialize in international VAT compliance and can handle everything from registration to filing for multiple countries. Might be overkill for just one transaction, but if you plan to continue selling internationally, it could be worth it.
Would those services be cost-effective for a small business with just occasional international sales? I'm concerned about spending more on compliance than the actual value of the sales.
For very occasional international sales, most of these services might not be cost-effective since they typically charge monthly subscription fees designed for businesses with regular international transactions. For your situation with just one small transaction, you might want to look at per-country filing services that charge one-time fees, or consult with an accountant who specializes in international tax to weigh the cost of compliance against the risk of non-compliance. Some businesses choose to hold off on formal registration until they reach a higher volume of sales in a particular country, but this approach does carry some compliance risk.
Quick question - has anyone used KVasimple for Korean VAT? I've heard they're specifically for foreigners dealing with Korean taxes but couldn't find many reviews.
I used them last year for our company. Pretty decent service and they do handle everything in English. Their customer service is hit or miss though - sometimes took days to get a response. But they did get everything filed correctly and on time.
Isabella Ferreira
Been using Cash App for taxes since they bought Credit Karma Tax. Its totally fine for W2 and basic 1099 stuff. One tip tho - download a PDF copy of ur return BEFORE you submit! Last year their servers got overloaded on April 14 and ppl couldnt access their returns for like 2 days. Just save a local copy as u go!
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Ravi Sharma
ā¢Does cash app let you import last years return if you used turbotax before? Or do you have to enter everything from scratch??
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Freya Thomsen
Definitely try Cash App! I switched from TurboTax last year and saved $89 on filing fees for basically the same service. Just make sure you set aside like 2-3 hours to do it all at once since their save feature can be a little glitchy. And double check all the numbers before submitting - their review process isn't as thorough as some paid services.
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