To add to this convo - don't forget that if you do form an LLC and keep it as a disregarded entity (basically taxed as a sole prop), you can still deduct the annual LLC fee that most states charge as a business expense on Schedule C! That's separate from your state income taxes. I pay $800/year to California for my LLC and that amount IS deductible as a business expense.

I think we're all overcomplicating this. Just use an accountant people! I tried doing my own taxes as a sole prop for 2 years and missed so many deductions. Paid $650 for an accountant last year and she found over $3k in deductions I missed. She also explained that some business structures have higher audit risk than others so it's not just about the deductions.

As someone who's been doing freelance digital art for about 3 years now, I can definitely relate to the tax confusion when starting out! You're asking all the right questions. One thing I wish I'd known earlier - keep track of your business expenses from day one, even small ones. I missed out on deducting things like PayPal fees, bank transfer fees, and even the cost of business cards or promotional materials in my first year because I didn't realize they counted. Also, since you mentioned you're keeping good records with spreadsheets, make sure you're also tracking your expenses in the same detail. I use separate columns for income source, expense category, and business percentage (like if I use my phone 30% for business vs personal). This makes Schedule C so much easier to fill out. For the quarterly payments, don't stress too much about the ones you've missed - the penalties are usually pretty small for first-time filers, especially if you're not making huge amounts yet. Just try to get current with the next payment and you'll be fine. The IRS also has a really helpful Publication 334 (Tax Guide for Small Business) that covers a lot of the self-employment basics if you want to read up on the details yourself.

One thing that really helped me when I started freelancing as a digital artist was setting up a separate business bank account, even though it's not required for sole proprietors. It makes tracking income and expenses so much cleaner, especially when tax time comes around. Since you mentioned you're making decent money ($4,200 in 6 months), you're definitely going to want to stay on top of those quarterly payments going forward. I'd suggest calculating what you think you'll make for the full year and then divide that by 4 for your remaining quarterly payments. Better to overpay slightly than get hit with penalties. Also, don't forget about state taxes if your state has income tax. Even though you mentioned your state doesn't charge sales tax on digital products, you'll still likely need to report your freelance income on your state return too. Each state handles this differently, so it's worth looking into your specific state's requirements for self-employment income. The good news is that once you get through your first year and understand the process, it becomes much more routine. You're already ahead of the game by keeping good records and asking these questions early!

I've been through this exact situation! My tax preparer was doing something similar - lumping everything together and not properly separating short-term vs long-term gains. What really helped me was getting a second opinion from another CPA before filing. The IRS is pretty clear that Form 8949 transactions need to be properly categorized by their holding period, even when summarizing. The fact that your brother-in-law put long-term transactions in the short-term section could definitely cost you money since long-term capital gains typically get better tax treatment. Since this is family and he's doing it for free, maybe approach it as "I want to make sure I understand how this works" rather than "you did this wrong." You could even mention that you heard summarizing was okay but that the long/short-term split still needs to be maintained. That way you're not directly criticizing his work but still getting the issue addressed. Bottom line though - don't sign a return you're not comfortable with, even if it's family. The IRS doesn't care who prepared it, you're the one responsible for what's on there.

I'm actually a tax preparer myself and want to chime in here. What your brother-in-law did with the summarization isn't necessarily wrong in principle, but the execution has some clear issues. The IRS does allow summary reporting on Form 8949, especially when you have numerous transactions. However, there are specific rules that must be followed: 1. Short-term and long-term transactions MUST be kept separate - this is non-negotiable 2. You need to use the correct checkboxes (A, B, or C for short-term; D, E, or F for long-term) 3. The summary totals should generally match what brokerages reported to the IRS The fact that everything is showing up as short-term when you had long-term holdings is definitely an error that needs to be corrected. This could cost you significant money since long-term gains often qualify for preferential tax rates (0%, 15%, or 20% depending on your income) versus short-term gains which are taxed as ordinary income. For the family dynamics, I'd suggest approaching it as wanting to learn more about the process rather than questioning his competence. You could say something like "I noticed all my transactions are showing as short-term - can you help me understand how that works since I thought some of my holdings were long-term?" This gives him a chance to either explain his reasoning or realize the mistake without feeling attacked. Remember, even though he's doing this for free, you're still responsible for what's on your return. It's better to address this now than potentially deal with IRS correspondence later.

I've been through this exact nightmare with my 83B election filed from Singapore! The international mail tracking black hole is absolutely maddening, and the IRS phone system seems designed to drive people insane. Here's what finally worked for me: I combined several of the approaches mentioned here. First, I filed the FOIA request that @PixelWarrior suggested - that's brilliant advice and gave me peace of mind knowing there would be a definitive answer eventually. While waiting for that, I also had my company's legal team write a letter confirming my grant date and that I notified them of my intent to file within the 30-day window. The key breakthrough came when I used Claimyr to actually get through to an IRS agent. I was skeptical at first too, but after weeks of getting disconnected, it was worth trying. The agent was able to look up my filing and confirmed it was received and in processing - just stuck in their massive backlog. For what it's worth, the processing delays don't affect the validity of your election as long as it was received within the 30-day deadline. Your certified mail receipt from Deutsche Post should be solid proof of timely filing. Don't panic - this situation is way more common than you'd think, especially with international filings. The IRS is just incredibly slow with 83B elections since they don't generate revenue.

I'm dealing with a nearly identical situation - filed my 83B election from overseas (Australia) back in October 2023 and still waiting for any confirmation. The international mail tracking nightmare is so real - Australia Post just shows "delivered to international partner" with no further details. Reading through all these responses has been incredibly helpful though. I had no idea about the FOIA request option that @PixelWarrior mentioned - that seems like the most reliable way to get definitive proof one way or another. The fact that it's free and gives you official documentation is huge. I'm also planning to reach out to my company's legal team based on @Luca Bianchi's suggestion. They should have records of when I received my grant and when I notified them about filing the election, which could be crucial backup documentation. The one thing that's been keeping me up at night is wondering if the IRS processing delays could somehow invalidate my election even if it was filed on time. Really relieved to hear from @ElectricDreamer that processing delays don't affect validity as long as it was received within the 30-day window. For anyone else in this boat - definitely keep that certified mail receipt as your proof of timely filing. It's basically your insurance policy if you need to make a reasonable cause argument later.

One more thing to consider - if either of you have student loans, filing jointly might affect income-based repayment plans since they'll look at your combined income. Something to think about if she's got loans and is on an IBR plan.

Just wanted to add something that might help with your decision-making process. Since you mentioned using TurboTax before, you'll find that most tax software (including TurboTax) will actually run calculations for both filing jointly and separately, then recommend whichever saves you more money. In your case, with your $58k income and her $9.2k income, filing jointly will almost certainly be better because: 1. You'll get the higher standard deduction ($29,200 vs $14,600 each if filing separately) 2. Your combined income will likely keep you in lower tax brackets overall 3. You'll have access to more credits and deductions that phase out for separate filers The "dependent" confusion is totally understandable - it's one of the most common misconceptions for newlyweds. The tax code treats marriage as creating a partnership, not a dependency relationship. You're both equal partners in the return, even if one person earns significantly more. Good luck with your first married filing! The software will walk you through everything step by step.