I went through almost the exact same situation when I sold my primary residence after moving out years earlier! The lack of receipts felt overwhelming at first, but I was able to piece together enough documentation to claim substantial basis adjustments. Here's what worked for me beyond what others have mentioned: Check if your county assessor's office has online records showing property characteristics over time. Many counties now digitize old assessment cards that might note "new kitchen," "updated bath," or "addition" from specific years. These are official government records the IRS readily accepts. Also, don't forget about warranty cards and product registrations. When we installed new appliances, windows, or major systems, we often registered warranties online or mailed in cards. Companies like Whirlpool, Pella, or Carrier sometimes keep these records for decades. Even if it doesn't show installation costs, it proves when major components were purchased. One strategy that really helped: I created a detailed timeline with supporting evidence for each improvement, then researched what similar work cost during those specific years using sources like RSMeans construction cost data or HomeAdvisor's historical pricing. The IRS accepts reasonable estimates when supported by this type of research. Remember, you don't need receipts for 100% of your improvements to make a significant difference in your capital gains. Even documenting half of what you did could save you thousands in taxes. The key is being thorough, reasonable, and well-documented with whatever evidence you can gather.

I work as a tax preparer and see this situation frequently! You're actually in a better position than you might think. The IRS Publication 523 specifically addresses situations where taxpayers don't have receipts for home improvements, and there are several accepted methods for reconstructing your basis. Here's my recommended approach: Start by creating a comprehensive inventory of all improvements with estimated completion dates. Then gather ANY supporting documentation you can find - even partial evidence helps. This includes old photos (check your phone's photo stream going back years), social media posts, emails mentioning the work, bank/credit card statements showing purchases at home improvement stores, and any checks written to contractors. For cost estimates, use reliable sources like Remodeling Magazine's annual Cost vs. Value reports from the specific years you did the work. The IRS generally accepts reasonable estimates based on market research when contemporary records aren't available. Pro tip: Focus on the improvements that added the most value - kitchen, bathrooms, roof, HVAC systems. Even if you can only document 60-70% of your actual improvements with solid evidence, that could still significantly reduce your capital gains tax. Most importantly, organize everything chronologically with a clear narrative of what was done when. The IRS appreciates taxpayers who make good faith efforts to reconstruct records systematically rather than just throwing out random numbers. Consider working with a tax professional who has experience with capital gains situations - the potential tax savings usually justify the cost of professional help.

The 941 Schedule B has caused me so many headaches! One thing I learned the hard way is that if you're a semi-weekly depositor and file Schedule B incorrectly, the IRS doesn't just send a nice reminder - they hit you with failure-to-deposit penalties. For the original question - the date that matters for Schedule B is 100% when employees have access to their funds (payday). I use ADP for payroll and they helped explain that I should list the payday date on Schedule B, not when I process payroll or when I make the deposit. Another tip - if you use the Electronic Federal Tax Payment System (EFTPS), it shows your tax payment history with "settlement dates." Don't use those dates on Schedule B either. Those are when the money moved, not when the liability was incurred.

I'm glad this thread cleared up the Schedule B confusion! As someone who handles payroll for multiple small businesses, I've seen this exact issue come up repeatedly. One additional point that might help others - make sure your payroll software is configured to report the correct payday dates, not processing dates, especially if you're generating any automated reports for tax purposes. I've found it helpful to create a simple spreadsheet tracking our actual paydays alongside deposit dates and due dates. This makes it much easier when completing Schedule B and helps avoid the confusion between these different dates. The key takeaway from everyone's responses is crystal clear: use the date employees actually receive their wages, period. Thanks to everyone who shared their expertise, especially the former IRS agent - that perspective was invaluable!

I've been running payroll for small businesses for about 8 years now, and I'd definitely echo what others are saying about the payroll advance being your safest bet. One thing to add though - make sure you check your state's labor laws first. Some states have specific requirements about payroll advances, like maximum amounts or documentation you need to keep. Also, since you mentioned using ADP, they actually have tools that can help you process advances properly. You might want to give them a call - their support team is pretty good at walking you through these one-off situations. They can make sure the advance gets coded correctly in their system so your year-end reporting stays clean. For what it's worth, I've seen the "temporary exempt" thing blow up in people's faces when tax season comes around. Even if it's just one paycheck, if your employee ends up owing more than $1,000 at filing time, the IRS can hit them with an underpayment penalty. Better to help him find the cash flow he needs without creating a potential tax headache down the road.

I've been in a similar situation as an employee before and wanted to share what I learned. When I had a financial emergency, I discovered that there are actually several legitimate ways to get more cash from your paycheck without the risks that come with claiming exempt status. First, your employee could adjust their W-4 to claim additional allowances or use the "extra amount to withhold" line in reverse (putting a negative number to reduce withholding). This isn't the same as going fully exempt and is much safer legally. Second, and this might be the most helpful - many employees don't realize they can request their employer change their pay frequency temporarily. If you normally pay bi-weekly, you could potentially do a one-time weekly payment to get him his money faster without any tax complications. The payroll advance route others mentioned is definitely solid too. Just make sure you document everything properly and check if your business insurance covers employee advances (some policies have specific clauses about this). One last thing - if your employee is in a real financial bind, remind him that he might qualify for an emergency hardship withdrawal from his 401k if he has one, or there might be local emergency assistance programs available. Sometimes there are options beyond just adjusting payroll.

I just want to echo what everyone has said here - this is such a common source of confusion for household employers! I went through the exact same panic last year thinking I was going to double-pay taxes. The consensus here is spot-on: if your payroll service (like QuickPay) is filing quarterly 941s and handling the annual 940, you still need to file Schedule H with your personal return, but you absolutely must check Box 8 to indicate you've already paid the employment taxes through your payroll service. One thing I'd add that helped me feel more confident - I actually requested copies of the 941s that my payroll service filed on my behalf. Most services will provide these if you ask, and it's really helpful to have them in your records. That way you can see exactly what was reported and when, which makes filling out Schedule H much less scary. Also, don't forget to get a detailed year-end summary from QuickPay showing total wages paid, taxes withheld, and employer taxes paid. You'll need these specific figures for Schedule H, and having everything documented properly will save you headaches if the IRS ever has questions. The key is just making sure nothing falls through the cracks - your payroll service handles the quarterly filings, you handle Schedule H (with Box 8 checked), and everybody's happy!

As a tax professional who specializes in household employment, I can confirm everything discussed here is absolutely correct. The confusion between Schedule H and Forms 940/941 is probably the most common question I get from clients with nannies. Here's the definitive breakdown: If your payroll service (QuickPay in your case) files quarterly 941s and annual 940s, you STILL must file Schedule H with your personal tax return. However, you'll check Box 8 on Schedule H Part I to indicate that employment taxes have already been paid through quarterly deposits. This prevents double taxation. The reason you need both is that they serve different purposes - the 940/941 forms handle the actual tax payments and reporting to the government, while Schedule H integrates your household employment into your personal tax return and calculates any additional taxes owed (like the employer portion of Social Security/Medicare if it wasn't fully covered by your quarterly payments). I always recommend my clients request a comprehensive year-end summary from their payroll service that includes: total wages paid, federal income tax withheld, Social Security wages, Medicare wages, and employer taxes paid. You'll need all these figures for Schedule H. One final tip: keep copies of all quarterly payment confirmations from EFTPS and any forms your payroll service files on your behalf. The IRS may request these during an audit, and having organized records will save you significant headaches.

Has anyone tried using any of the tax software packages to track S-corp basis over multiple years? I've been using a spreadsheet but it's getting unwieldy. I've heard QuickBooks doesn't really handle it well, but wondering if any of the tax packages do?

I've been dealing with S-corp basis issues for years and want to clarify something that might help. The ordering rules are actually laid out in IRC Section 1367, and they're pretty rigid: 1. Start with beginning stock basis 2. Add: Income items (including tax-exempt income) 3. Add: Additional paid-in capital contributions 4. Subtract: Distributions (but not below zero) 5. Subtract: Non-deductible expenses 6. Subtract: Losses and deductions So in your case, Henry, your $18.5k additional paid-in capital does create basis that's available for distributions before your current year loss hits. But here's the key detail some people miss - if you take a distribution that exceeds your basis after steps 1-3, that excess becomes taxable as capital gain. One more thing about those suspended losses: they stay suspended indefinitely until you create enough basis to absorb them. They don't disappear, but they also don't factor into the current year ordering calculation. Think of them as sitting in a separate bucket waiting for future basis. Documentation is crucial here. The IRS loves to challenge S-corp basis calculations on audit, so keep detailed records of when you made the capital contribution and any distributions.