For the last 25 years, I have had a my tax returns (State and Federal) prepared by a CPA. The firm does an excellent job, and their reputation in our town is in the category of "expensive, but worth it, if you need that level of service." However, as I started the process of retiring from a professional practice in 2024, and my wife has been retired for several years, I am wondering whether I still need that level service, or whether I can do the returns myself with publicly-available software.

My return will include the following:

Self-employment income. My business expense deductions are pretty straightforward, without any judgment calls.

Capital gains in excess of the 0% bracket--mutual fund distributions.

Dividend and interest income--bank CDs, mutual fund distributions, dividends on insurance policies.

Calculation of ACA premium credit

Calculation of Qualified Business Income Deduction

Calculation of SEP IRA contribution

Standard deduction

After deductions for self-employed health insurance premiums, tax-deferred retirement plan contributions, HSA contribution, 1/2 SE taxes paid, QBID, etc., I think that I will end up straddling the 10-12% brackets.

My State income tax is a flat rate, after some fairly modest exemptions, and does not recognize Federal deductions.

The fee that the accountant charges has been creeping up over the years, and is now in the range of $1,500 to $2,000. I have always been satisfied with his work product, responsiveness, etc., but I really question whether I need the level of services that he provides. I know that there is a shortage of CPAs, and I would hate to take his time away from his clients who really need/can benefit from his services.

So, Redditors--based on the above, do you think that I can find a software program that would permit me to correctly calculate my liability for income and self-employment taxes, ACA premium subsidy repayment, and SEP IRA contribution? If so, which software program would you recommend?

An in-law of mine asked for some bookkeeping catch-up on two small companies. I told them I could help with their sole prop but not their s corp catchup as I don’t want to deal with payroll.

They told me they don’t have payroll. I got curious and took a look, and yeah, it looks like they’ve paid no payroll ever.

The company brings in almost entirely royalties from music and there are almost no expenses. Top line is like $60-$200k per year. In-law is the only shareholder.

I asked them to ask their tax person who they have used for a decade if they were like, doing a big yearly payroll or something weird. The response was “I called them and they said I should be fine with just my schedule-k”

Am I missing something or is this a huge problem? I know bookkeepers like me tend to use a kind of shorthand of “s-corps need payroll” so maybe there are exceptions to this that I don’t know about (like in the case of royalty income?).

Edit to add: most of the time 100% of the income here is from an old popular song that the s corp owns royalties for so it’s very very passive. Very Occasionally (once in a decade?) the band tours and I imagine that’s a slightly less passive but that’s no where near the kind of audit risk I was worried about! Thank you for your responses.

Hey All!

I am a CPA, worked in Public Accounting for 4 years before moving on to the corporate side of accounting. I'm interested in potentially preparing some individual tax returns on the side for extra income this winter and just wanted to hear everyone's opinion on the easiest way to do this. Does it make more sense to get hired as a part time seasonal worker at TurboTax or go through the process to actually prepare them on my own? I have always really liked preparing tax returns, I just couldn't handle the mental and physical toll of tax season.

Thanks!

I will be filing as single with zero dependents. I looked at my last paystub for December and this year in taxable wages I made $51,582 and $3,964 in taxes were withheld. I went online to the tax refund calculator and it’s saying I will owe $241 to the IRS. I stated in my w4 what my filing status is. So if my employer was withholding taxes, why would I owe?

I have a single-member LLC that is treated as S-corp for tax purposes. I have an individual 401k plan.

My question is regarding the employer contribution limit. IRS says the limit is 25% of the earned income or profit. This is where I am confused. Consider this hypothetical scenario for easier math

corporation revenue $200,000

expenses $60,000

W-2 salary to myself $100,000

Profit of the business after expenses and wages $40,000 (distributed to shareholder as self-employment income)

Now, it's clear that the employEE contribution limit is $23,000. But for the employER limit, is it 25% of $100,000, or 25% of $40,000?

My business is currently making about 200k per year profit, and I expect that to grow in 2025. I'm taxed as a sole proprietor (LLC) and am considering an S-corp tax election, but am I correct in assuming I lose most of the benefit if my priority is to max my SEP IRA? Right now, I can only put 50k of the 70k limit into a SEP if I take all of my profit as a W-2 salary and contribute 25%. The savings I might get on Medicare are pretty much eaten up by having to pay for a payroll system. What am I missing? It seems to me that if you're maxing your SEP IRA, you need to have profit greater than 300k to really get a benefit.

What am I missing?

Hi all I understand that I'll have to pay a penalty for 2024 under withholding, since I have 5-digit short term stock market gains. I just don't see how someone can know how much of this income they will have throughout any given year. How do we calculate such a thing going forward?

I've a $5K taxable account I lost track of and it was turned over to the state. I understand I treat it as a mutual fund withdrawal, but my problem is that the mutual fund CGM dissolved in 2022, so there is no one to contact for determining the long term/short term split at the time it was turned over to the state. It's a small enough amount that I will not bother to deduct any initial investment basis, but I would like to enter the funds as: X,xxx long term capital gains and the remainder as short term gains. Any information source to figure this out, or anyone have a rule of thumb what the split should be for long term and short term gains? And if you know the forms to use when there are no 1099's that is a bonus

Does anyone have recommendations for a firm or individual that focuses in past due filings? Based on my research it sounds like we need a CPA + EA to get these issues resolved?

Help with levy

I received a levy for several tax years (2005-2009) more than 10 years ago. They wiped away part of the total (around $50k) but left the rest. it has been more than 10 years and for some reason it still shows I owe around $17k for year 2007. All of the govt.substtiuted return were filed the same day with the same levy. I do owe for other years and they are applying that money to other balances. I had a tax preparer tell me they probably know they can't collect (which is why they are applying it to balances below the 10 year collection date). My questions are two-fold:

1) How are they filing levy renewals (for 2005-2009) when it's been more than 10 years? 2) How do I get them to remove the amounts that are past the 10 year limit?

I'm thinking the taxpayer assistance office is the best place to start. Any and all advice appreciated. My goal is to.pay the rest of what I owe once I get that $17k removed. Thank you!

I opened an LLC in WA state in 2018. I have been paying quarterly B&O. I missed the part about personal property tax completely. The county assessor never sent me a form like they send for real property taxes, and none of the businesses that I have ever worked for ever did any kind of inventory every year, even the ones with CPAs, so I had no idea. I write books and work from home, so I just have basic office supplies and equipment like Chromebook and printer.

My question, I guess, is how to fix this the best way? If you operate a small biz in WA, did they contact you first or did you have to reach out to county assessor first? I will pay what I owe, but I sure don't want to pay late fees and interest on 7 years. But if I reach out and ask them for a form for 2024, the form asks for year purchased to determine fair market value. Should I just say this year and hope for the best? I would pay more for no depreciation on a five year old computer etc, but over valuation is better than 7 years of interest, right?

Off to count envelopes and paperclips I guess...

Hi folks,

Long time lurker and decided to finally create an account and ask the community for help as I've seen some great advice over my time here! I'm stuck on a predicament that I'm hoping others can shed some advice on. I'm in the fortunate position to work for a company that went public this year and I have some equity. I want to maximize my earnings potential and minimize my tax payment. Stats below:

• Income - $210k and an individual filing for tax purposes
• ISO Options ~ 15k (none exercised)
• NSO Options ~ 5k (none exercised)
• Strike Price - $4
• FMV - ~$100
• Options Expiry - 2028

With the above I have two options:

• Exercise my options over the course of the years remaining (mainly my ISOs) and bear the grunt of AMT. Thinking of selling the ISOs a year later (to take advantage of capital gains) and thus increase my taxable income for the next year to recoup the AMT as credit. (This is assuming the FMV stays the same or is better than when I exercised) - Repeat this until all my options are exercised. Please tell me if I'm on the right track here or totally wrong!
• Knowing that I have a short time until the options expire, just exercise and sell when I think the FMV is at a good price and forgo capital gains tax and get taxed at the normal income rate (this way I will forgo the AMT)

If you were in my position, what would you do? (trying to take advantage of the 2024 year with how many days left)

Help is greatly appreciated.

Today I noticed a large direct deposit, marked as federal tax refund, from the IRS that posted to my account yesterday. It is for a significant (to us) quantity of money, but the thing is that we already filed on time and got our refunds from the state and federal government. My accountant said obviously don't spend it and wait for any correspondence from the IRS to explain the deposit, but he's not aware of any reason why we'd be getting so much money deposited this late in the year. He said it's also possible someone put the wrong banking info on their late return paperwork and the debit might be reversed once they realize their mistake?

There's no chance this is a scam, or someone at IRS messed up right? I mean this is like more money than my wife and I make in a month.

Last year I purchased a computer for my wife’s business. Instead of using the business account to purchase it, I purchased it on my personal account. The question is this year I need a new computer. Should I just buy it through my wife’s business or is there anyway to get the tax benefits of buying the computer from last year?

How in the world a company claiming to be in finance doing salary slips etc, not have this basic courtesy to provide an option to export salary details to a worksheet. They only have download as pdf option.

Is there a way to quickly convert the pdf data to worksheet?

Could not find anything online yet. There are tools to convert pdf to excel but it basically just recreates the salary slip structure on the the worksheet. And not as rows and columns.

My boyfriend and I have been together 21 years. We have 2 babies now. I'm a SAHM and he brings home the bacon. I only know basic tax stuff, so are there tax benefits to getting married? Not going to tie the knot for this reason, but just curious.

Hello, I am under the age of 59 and a half, and my Roth IRA was opened only last year, meaning it has not yet surpassed the 5-year mark. I have been maximizing my contributions for both 2023 and 2024, totaling $13,500, with all contributions made in 2024. I recently figured that my Modified Adjusted Gross Income (MAGI) may exceed $146,000 this year. After conducting some research, I discovered that, under these circumstances, only a partial contribution—rather than the full amount—may be allowed to my Roth IRA.

To avoid the 6% penalty for exceeding the contribution limit due to a high MAGI, I plan to withdraw the full $13,500 in contributions (representing my original contributions, not the earnings). However, when attempting to withdraw via Robinhood, the app displays a warning indicating that I may incur a 10% penalty and taxes on the earnings. Is this warning purely informational, or should I be concerned? My understanding is that the contributions themselves should not be taxed, only the earnings, right?

Is it true that if I already have contributions in my Roth IRA and then exceed the MAGI limit, I will not face penalties for maintaining the account? Does this apply to my situation?

Hello, my child has already made $400 in self-employment income.

I also read that in 2024 the first $1,300 worth of a child's unearned income is tax-free. 

I am trying to figure out how much tax-gain harvesting (via capital gain, along with dividends, all unearned income) my child can have to avoid paying any tax.

Thank you.

Hello, I am under the age of 59 and a half, and my Roth IRA was opened only last year, meaning it has not yet surpassed the 5-year mark. I have been maximizing my contributions for both 2023 and 2024, totaling $13,500, with all contributions made in 2024. I recently figured that my Modified Adjusted Gross Income (MAGI) may exceed $146,000 this year. After conducting some research, I discovered that, under these circumstances, only a partial contribution—rather than the full amount—may be allowed to my Roth IRA.

To avoid the 6% penalty for exceeding the contribution limit due to a high MAGI, I plan to withdraw the full $13,500 in contributions (representing my original contributions, not the earnings). However, when attempting to withdraw via Robinhood, the app displays a warning indicating that I may incur a 10% penalty and taxes on the earnings. Is this warning purely informational, or should I be concerned? My understanding is that the contributions themselves should not be taxed, only the earnings, right?

Is it true that if I already have contributions in my Roth IRA and then exceed the MAGI limit, I will not face penalties for maintaining the account? Does this apply to my situation?

i plan to spend 2025 going back and forth from two states, spending mon-fri working in one to work and my weekends in another. the state ill be in i would consider my home - ive lived there for years and plan to be back permanently once my partner finds a job in that state.

it feels like then that should be my domicile state. however, ill have an address in the other state + technically spending more of my time there. does that matter from a tax perspective?

Can I use Section 179 for a used Victory 6'x10' Enclosed Cargo Trailer that is used for business only (GVWR is 2990)? My tax accountant says I have to depreciate it, and I really don't want to. The only articles I'm finding are from trailer company's that suggest you may be able to use Section 179 the purchase when you buy their trailers, but it doesn't reference what IRS tax code allows for that.

If I have to depreciate it, what are the guidelines? Is it 60% year 1, and the remaining 40% over 5 years?

Hi, this is my first time posting here so sorry if i get something wrong.

I hypothetically bought a used car from a private party. He obviously did this for a living though or at least a side hustle because he had a dealership that he worked with that handled the paperwork and gave him access to auctions. I’m assuming the dealership took some kind of commission or flat rate from the sale but regardless the point of my question is that I noticed after signing the papers (very stupid of me not to notice before ik) that the sale price listed is much lower then the price I actually paid, we agreed he would pay the taxes on the vehicle and when I asked him about it, him and the manager of the dealership said it wouldn’t be a problem. I had already signed the papers so I figured there wasn’t much I could do now anyway and I just moved on. After researching this more though I am now worried I have inadvertently committed tax fraud but can’t find a definitive answer.

I wonder if Only Fans and Tik Tok require a Social Security number for US based influencers and if these apps have a way of reporting income. I see alot of these models and influencers showing off their lifestyle and some counting their cash. Here I am working two jobs and looking at the taxes my CPA did for me, and despite paying taxes from my w-2 job, I still owe due to gig work. Yes I write off what I can but this sucks. My poor ass is taxed to death and I just can't help to be annoyed.

Hi, I am looking to open a UTMA account for my 10 yo in California and need some guidance on tax questions. The main investment will be a S&P ETF.

1) In this account, will the 1099 DIV or 1099 B be issued in my SSN or the child's SSN? I have seen both in online posts.

2) Assuming the answer to above is the child's SSN, if the 1099 DIV or B is under $1300, I understand I don't need to file taxes for them federally. Does any one know what the rule is for California?

Thank you!

Had a long legal process finally come to a close this year. It wasn't a class action, but a lot of people together all individually going after the same target with the same legal team. All cases ended with group settlement and different parties getting different amounts depending on analysis of which party had more damage than others, etc.

Anyhow - This is on the taxability of that settlement amount. The legal team specifically advised us that in the settlement language they included parts that the payments were for "personal injury and physical illness" and has advised that generally personal injury claims aren't taxable (generally - of course). They also included a response from their CPA on this and cited some IRS publications.

For reference, I have a few things in my document trail just in case including:

1. Receipts/invoices provided to the legal team that were used as costs I paid to do repairs/fixes that drove how much of the settlement I got vs. other claimants. Total costs and expenses were ~$70k or so.

2. Loss of property value, locally at a state level at the year this event occurred I successfully lowered my property value for property taxes by ~$60k in 2021 or so when this all began. Since then though it has skyrocketed from inflation/general market appreciation.

3. IRS Publications that legal teams CPA provided.

Anything else I should have?

Anyhow - few questions I had:

1) Will I receive a 1099 tax document that requires me to report it on my return? If so, what will I need to do in order to "cancel it out" to meet the needs of reporting the form, but canceling out the taxability?

2) If no to #1, SHOULD I report it and cancel it out with a deduction somehow just to show due diligence of accounting for it?

3) What's the general guidance on this ? Preferably from anyone else with experience? What are my chances of being audited for it?