Smart approach! Do you ever worry about missing economic nexus triggers in those manually-tracked states though? Some states have really low thresholds now.

That's actually a valid concern. We do a quarterly check against all state thresholds as part of our process. We track transaction counts and revenue by state in our ERP system, so I've built a simple dashboard that flags when we're approaching a threshold. The states with the lowest thresholds (like $100K in sales or 200 transactions) are the ones we put on Avalara immediately just to be safe. The manual states are typically those with higher thresholds or where we have just a handful of customers.

The free resources are ok for basic rate lookup but they don't address the local jurisdictions or special district taxes. And they definitely don't help with filing or tracking deadlines. Maybe check out TaxJar's free trial? They have a basic tier that's not too expensive.

This is super helpful! Do you keep physical receipts too or just the ledger? And has your accountant mentioned any specific percentage of their income that should remain in their accounts vs being spent?

I keep digital copies of major receipts (like the big gymnastics/sports payments) but just note the small stuff in the ledger. My accountant never mentioned a specific percentage that needs to stay in their accounts. The key thing is the money should be used for their benefit - whether that's current expenses or saving for their future. There's no rule about how much needs to stay in the account. In fact, using a good portion for their current needs actually strengthens the case that this is legitimate income that belongs to them, not just a tax scheme.

This is so true! My tax guy says document EVERYTHING - take pics of your kids working, keep timesheets, and pay market rates. Nothing raises red flags faster than overpaying family members.

Thanks for mentioning student loan interest! We both finished paying ours off last year, so we might be able to deduct the interest from those final payments. Is that something we report on a different form than the itemized deductions?

Student loan interest is reported on Schedule 1 as an adjustment to income (sometimes called an "above-the-line deduction"), which means you can claim it even if you take the standard deduction. It's not part of your itemized deductions at all. You should receive Form 1098-E from your loan servicer showing how much interest you paid. The deduction starts phasing out at higher income levels though, so depending on your combined income, you might get a partial deduction or none at all.

This is bad advice. The OP already said their mortgage interest alone exceeds the standard deduction. Plus, if you're close to the line, itemizing state taxes and charitable giving can easily push you over. Missing legitimate deductions is literally giving away your money.

Yes! The income phase-out range for Roth IRA contributions is increasing for 2024. For single filers, the phase-out range is $146,000 to $161,000 (up from $138,000-$153,000 in 2023). For married filing jointly, it's $230,000-$240,000 (up from $218,000-$228,000). So if you were just above the limit last year, you might be eligible for at least partial Roth contributions in 2024!

That's awesome news! I was just barely phased out last year with an income of $154k, so it sounds like I can make at least partial direct Roth contributions this year. Thanks for the info!

Yes, the $23,000 contribution limit for 2024 applies to 403(b) plans as well! The elective deferral limits are the same for 401(k)s, 403(b)s, most 457 plans, and the federal government's Thrift Savings Plan. The $7,500 catch-up contribution for those 50+ also applies to your 403(b). Additionally, 403(b) plans sometimes have a special catch-up provision for employees with 15+ years of service at the same eligible employer, which can allow for additional contributions beyond the standard limits.

That's actually a common misconception. HSA funds generally can't be used to pay for health insurance premiums in most situations. There are a few exceptions (like COBRA or while receiving unemployment), but regular health insurance premiums aren't eligible HSA expenses even though other medical costs are.

Thanks for clearing that up! I definitely had that wrong then. I thought pretty much any health-related expense could be paid from an HSA. Good to know before I tried to use mine incorrectly!

I actually hadn't considered that angle! My employer's family coverage is definitely over that 9.12% threshold of our household income. That's really helpful information - I'm going to check out the marketplace options with this in mind. Thanks for bringing this up!