Just an additional note on this topic - I'm a small business accountant and this is something that confuses almost all of my single-member LLC clients. Here's what you need to know about the W9 specifically: On the current W9 form (Rev. October 2018), there's a checkbox in Part I for "Individual/sole proprietor or single-member LLC." Check that box. Then, if you want to use your EIN (which many people prefer for privacy), you can do so, but you MUST put your personal name on the "Name" line, and then put your business name on the "Business name/disregarded entity name" line. This tells whoever is processing the W9 that while you're providing an EIN, the payment should be reported against your SSN. It's confusing but this approach satisfies both the technical requirements and helps protect your SSN.

I messed this up last year & it came back to bite me. Had my EIN on all W9s but didn't check the right box or do the disregarded entity part correctly. Like 3 clients reported payments to my EIN but I reported all income on my personal taxes with my SSN. Got a lovely letter from the IRS asking why the income reported to my EIN wasn't on a business return. Had to explain the whole disregarded entity thing & send in extra documentation. Not a huge deal but added stress during tax season. Just do it right the first time!

Forget all this complicated advice. I've been delivering for 3 years and I just deduct EVERYTHING. Food, gas, car payments, insurance, phone, internet at home, part of my rent for "home office." Never been audited. The system is rigged against regular people anyway, so take what you can get!

I completely agree with @Zainab Abdulrahman here - this is terrible advice that could get you in serious trouble! @Natasha Romanova, deducting "everything" including rent for a fake home office when you're doing food delivery is exactly the kind of behavior that triggers audits. The IRS has sophisticated algorithms that flag returns with unusually high deduction percentages relative to income. For someone making $400-500/month from delivery work, claiming thousands in questionable deductions will stick out like a sore thumb. And when (not if) you get caught, you'll owe back taxes, interest, penalties, AND potentially face fraud charges. @Miguel Castro, stick with legitimate deductions: mileage using the standard rate, phone bill percentage for business use, insulated bags, and other actual business expenses. Keep detailed records and only claim what you can legitimately defend. It's better to pay a little more in taxes than to risk massive penalties later.

For anyone still looking for options, I used FreeTaxUSA for my partnership return last year and it was only $69 for the federal Form 1065. Way cheaper than TurboTax ($199) or H&R Block ($149) for the same thing. The interface isn't as slick as the expensive options, but it gets the job done and asks all the right questions. Just make sure you have all your income and expense categories organized before you start.

I went through this exact same situation last year with my small consulting partnership! After researching all the options mentioned here, I ended up using TaxAct Business for around $75, which was a good middle ground between the free manual option and the expensive software. One thing I'd add that really helped me - before you choose any software or method, make sure you understand the difference between guaranteed payments and distributive shares. This tripped me up initially and almost caused me to file incorrectly. The IRS has some good examples in Publication 541 that Malik mentioned. Also, don't forget that partnerships have different deadlines than individual returns - Form 1065 is due March 15th (not April 15th like personal taxes), though you can file for an extension. Since you're filing for 2023, you're already past the original deadline, so you might want to look into late filing penalties and whether you qualify for any exceptions. Good luck with your first partnership return! It's definitely more complex than personal taxes, but once you get through it the first time, future years become much easier.

Does anyone know if we need to wait for the 1095-C before filing taxes? I usually file in February to get my refund faster, but my employer is always late sending these forms.

Great question! As someone who used to toss these forms too, I learned the hard way that you should definitely keep your Form 1095-C. While you don't need to attach it to your tax return, it's crucial documentation that proves you had qualifying health coverage. The form serves a few key purposes: it shows the IRS that your employer offered you affordable coverage that meets ACA requirements, which can affect your eligibility for premium tax credits if you ever shop for marketplace insurance. It also provides proof of coverage dates, which is important for your records and could be needed if you're ever audited. Even though the federal penalty for not having coverage is currently zero, some states still have their own individual mandates. Plus, if there's ever a discrepancy about your coverage or if you need to prove you had insurance for any reason, this form is your official documentation. My advice: keep it with your other tax documents for at least 3 years (the standard IRS audit window). It's one of those "better safe than sorry" situations where having it and not needing it is way better than needing it and not having it!

A few clarifying points that might help you: 1. S-Corp basis tracking is one of the most common areas where small business owners get in trouble with the IRS. Remember that basis has three components: stock basis, debt basis, and AAA. 2. APIC gets added to your stock basis but doesn't appear directly on the 1120-S other than within the balance sheet on Schedule L. 3. When you take money out, it follows a specific ordering: first from AAA (generally tax-free), then from APIC (generally tax-free until you exhaust it), then potentially taxable. 4. Form 7203 is relatively new and was specifically designed to help with basis tracking since so many S-corps were doing it incorrectly. 5. The bank account balance will NEVER match basis - they're completely different concepts.

So I called the IRS directly on this (spent 3 hours on hold lol) and they actually had a different take on APIC withdrawals. The agent said that for a single shareholder S-Corp, the return of APIC should be treated as a reduction of the original capital contribution rather than a distribution in some cases, especially if it's clearly identified as a return of capital.