@Simon White Great question about the ordering of losses! There actually isn t'a specific IRS-mandated ordering rule for which passive losses get used first. It s'generally considered a taxpayer election, which means you can strategically choose which losses to utilize when you have passive income available. The strategy should definitely consider which losses are more likely to be trapped "versus" those with more flexibility. For example, vacation home losses under Section 280A can only offset income from that specific property, so if you have passive income from other sources, you d'typically want to use your regular passive activity losses first and preserve the vacation home losses for when that specific property generates income. However, if you have a vacation property that s'consistently profitable and regular rental properties that are break-even, you might want to use the vacation home losses first since you have a reliable income stream to absorb them. Regarding the principal residence test during COVID - that s'a really timely question! The IRS hasn t'issued specific guidance on this, but the determination is generally based on where someone spends the majority of their time during the year. If someone spent more days at their vacation "home" due to remote work during 2020-2021, it could potentially affect the principal residence classification and complicate the Section 280A analysis. I d'recommend documenting the reasons for extended stays work (requirements, health concerns, etc. and) being prepared to explain that it was temporary rather than a permanent change in residence. The intent and circumstances matter for this determination.

@Simon White Great questions about the ordering rules! The passive activity loss regulations don t'actually specify a particular order for using different types of passive losses - it s'generally taxpayer election within the constraints of each limitation. However, from a strategic standpoint, you typically want to use losses that have more flexibility first and preserve the more restricted ones. For example, if you have regular passive rental losses subject (to Section 469 and) vacation home losses subject (to Section 280A ,)and you have passive income available, you d'generally want to use the regular passive losses first since vacation home losses can only offset income from that specific property. The regular passive losses could potentially be used against any passive income or even released upon disposition of any passive activity. Regarding the principal residence test during COVID - this is actually a great point that many practitioners dealt with. The IRS hasn t'issued specific guidance, but the determination is based on facts and circumstances. Extended remote work periods at a vacation home could potentially shift it toward principal residence status, especially if the taxpayer receives mail there, registers to vote, or establishes other indicators of it being their main home. The key is documenting the intent and circumstances. If someone temporarily worked remotely due to COVID restrictions but maintained their primary residence elsewhere and returned when able, that s'different from someone who affirmatively chose to relocate their primary residence. Each situation requires careful analysis of all the facts. For multiple property situations, I usually create a matrix showing all properties and their respective loss types/limitations to help clients understand the strategic implications of which losses to use in any given year.

Does Cash App Taxes handle musicians with 1099s and W2s from multiple states? Last I checked they had limitations on more complex tax situations.

Great question about W-2 vs 1099 treatment! Since you're in Ohio, you have reciprocal agreements with Indiana, Kentucky, Michigan, Pennsylvania, and West Virginia. For W-2 income from venues in those states, you typically only pay Ohio taxes and don't need to file separate returns in those states. For 1099 income, reciprocity doesn't usually apply - you'll likely need to file in each state where you received 1099s, assuming you meet their minimum thresholds. For finding thresholds quickly, try the Federation of Tax Administrators website (taxadmin.org) - they have state-by-state comparisons. Also, many states list their filing requirements right on their main tax page. A few quick ones: California requires filing at $18,662, New York at $8,000, Illinois at $2,325. Since you have mixed W-2/1099 income, I'd definitely recommend consulting with a tax professional who specializes in entertainment industry taxes - the complexity of multi-state filings with mixed income types can get tricky, and a one-time consultation fee might save you more than the cost of unnecessary filings.

Great question about W-2 vs 1099 differences! Since you're based in Ohio, you're in luck - Ohio has reciprocity agreements with several neighboring states, but it gets tricky with touring income. For W-2 income: If the venue withheld state taxes and you received a W-2, you'll generally need to file in that state to get any refund of overwitheld taxes, even with reciprocity. However, you can often claim a credit on your Ohio return for taxes paid to other states. For 1099 income: This is treated as self-employment income, so reciprocity agreements typically don't apply. You'll need to check each state's minimum threshold for self-employment income specifically. For finding thresholds quickly, try the Federation of Tax Administrators website (taxadmin.org) - they maintain a summary chart of state filing requirements. It's not perfect but gives you a good starting point. Also, many states list their thresholds right on the first page of their non-resident tax forms, which you can find faster than digging through their full tax codes. Given the mix of W-2s and 1099s, I'd definitely recommend tracking which venues gave which type of payment - it could save you several state filings!

How did they even find out about the purchase? That seems scary that they can track that kind of stuff.

States are getting really sophisticated with data matching now. They can cross-reference purchase records from major retailers, credit card transactions, and shipping data with tax returns. For big purchases like that laptop, they probably matched the shipping address or payment method to your cousin's tax records. Some states even have agreements to share information about residents making purchases in other states. It's honestly not worth the risk anymore - the penalties and interest they charge usually end up costing way more than just paying the original sales tax would have.

@Natalie Chen For sales tax holidays, most state revenue departments publish annual calendars with the dates. You can also check the Federation of Tax Administrators website - they maintain a comprehensive list of all states tax' holiday schedules. Setting up calendar reminders at the beginning of each year helps me never miss them! Regarding resale certificates, yes, if you re'regularly buying items with the intent to resell them, you can typically apply for a resale certificate in your state. However, there are strict requirements - you need to have a legitimate business purpose, keep detailed records, and only use the certificate for items you genuinely intend to resell not (personal use .)You ll'also need to collect and remit sales tax when you sell those items to end customers. The application process varies by state, but most require you to register for a sales tax permit first. Just be very careful to follow the rules exactly - misusing a resale certificate can result in hefty penalties plus interest on the unpaid taxes.

@Natalie Chen For sales tax holidays, most state department of revenue websites maintain calendars of upcoming tax-free periods. The Federation of Tax Administrators also publishes an annual summary that s'really helpful for planning ahead. I usually check both in January to plan my major purchases for the year. Regarding the resale certificate - yes, if you re'regularly buying items with the intent to resell them, you can typically apply for a reseller s'permit in your state. The key requirements are usually that you re'conducting business regularly not (just occasional sales and) that you re'buying items specifically for resale, not personal use. You ll'need to register your business, get a sales tax permit, and then you can use your resale certificate to avoid paying sales tax on qualifying wholesale purchases. Just be careful to only use it for legitimate business purchases - misusing a resale certificate can lead to penalties and back taxes. But if you re'doing regular flipping, it s'definitely worth looking into!

Yes, exactly! When you file jointly, the IRS system checks both spouses for any federal debts that could trigger an offset. Student loans in forbearance typically won't cause an offset - it's usually only defaulted federal student loans that get sent to Treasury for collection. However, if those loans have since gone into default, that could definitely be a concern. You can check the National Student Loan Data System (NSLDS) at nslds.ed.gov to see the current status of any federal student loans. Also, as others mentioned, calling the Treasury Offset Program at 800-304-3107 will tell you immediately if there are any pending offsets against either of your Social Security numbers. Better to know for sure than worry! 😊

Yes, exactly! When you file jointly, the IRS system checks both spouses for any federal debts that could be subject to offset - student loans, back taxes, child support, etc. The good news is that if your spouse's loans are in forbearance, they typically aren't in default status, which means they shouldn't trigger an offset. However, if there were any periods where the loans went into default before the forbearance was arranged, that could potentially cause issues. You can check the status by calling the Federal Student Aid Information Center at 1-800-433-3243 or logging into your spouse's studentaid.gov account to see the current status of all federal loans. If everything shows as "in forbearance" or "current," you should be in the clear!

I use Microsoft Lens on my phone and it works great! Creates clear PDFs that I store in an encrypted folder. Just make sure to back them up somewhere secure like an encrypted external drive or password-protected cloud storage. Regular phone backups aren't secure enough for tax docs.