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.

As someone who's been dealing with self-employment taxes for a while, I wanted to add a few practical tips that might help you maximize your legitimate deductions: 1. **Mileage tracking timing**: Start tracking from the moment you leave your house to begin your delivery shift until you return home. This includes driving to your first pickup location and back home from your last delivery. Many drivers miss out on these "deadhead" miles. 2. **Phone expenses**: You can deduct the business percentage of your phone bill since you use it for delivery apps. Keep track of how much time you spend using it for delivery work vs. personal use. 3. **Equipment deductions**: Beyond insulated bags, you can deduct phone mounts, car chargers specifically for work, and even a portion of phone accessories if they're primarily for delivery work. 4. **Quarterly estimated taxes**: Since you're making $400-500/month, you'll likely owe self-employment taxes. Consider making quarterly payments to avoid a big bill (and potential penalties) at year-end. The key is keeping meticulous records for everything you claim. I use a simple spreadsheet to track all business expenses alongside my mileage app. It's saved me during audits and helps me spot deductions I might have missed. Good luck with your side gig!

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!

This thread has been incredibly helpful! As someone who just started an S-Corp last year and is facing my first tax filing, the complexity of basis tracking was honestly overwhelming me. I've been following the discussion about APIC withdrawals and distributions, and I think I understand the concept now, but I'm curious about timing issues. If I made an APIC contribution in December 2023 but then needed to withdraw part of it in January 2024, how does that affect my 2023 vs 2024 basis calculations? Does the withdrawal get treated as a 2024 distribution even though it's technically returning 2023 capital? Also, I noticed everyone mentioning Form 7203 - is this required for all S-Corp shareholders now, or only in certain situations? My accountant hasn't mentioned it yet and I want to make sure I'm not missing something important. Thanks to everyone who's shared their expertise here - this is exactly the kind of real-world guidance that's so hard to find elsewhere!

This has been such an enlightening discussion! I'm dealing with a similar S-Corp basis tracking situation and had no idea about the complexity involved until reading through everyone's experiences here. One thing that really stands out to me is how many different approaches people have taken - from using specialized software tools to calling the IRS directly to working with experienced accountants. It seems like there's no "one size fits all" solution, but the common thread is the importance of proper documentation and understanding the distinction between stock basis, debt basis, and AAA. For anyone else following this thread who might be new to S-Corp basis issues like I am, here are the key takeaways I'm getting: 1. APIC withdrawals = distributions (Code D on K-1), even if you're just "taking back what you put in" 2. Basis calculation is crucial and includes APIC contributions - track it carefully throughout the year 3. Form 7203 is your friend for basis tracking, even if not technically required 4. Bank account balance ≠ tax basis (they're completely different concepts) 5. Good documentation now saves major headaches later, especially with increased IRS focus on S-Corp compliance The timing question that Fatima raised is particularly relevant for me since I also had contributions and withdrawals spanning different tax years. It's reassuring to know that the transaction date determines which year it affects for basis purposes. Thanks to everyone who shared their expertise and experiences - this is the kind of practical guidance that's invaluable for small business owners trying to navigate these complex rules!

Heads up - the income limit for rental loss deductions is based on Modified Adjusted Gross Income (MAGI), not just your W2 income. Some deductions like student loan interest and retirement contributions can bring your MAGI down. Probly not enough to get under $150k in your case but worth noting!

Just wanted to add another perspective on the "real estate professional" qualification that Liam mentioned. Even though you both have W2 jobs, it's worth understanding the exact requirements since the rules can be surprising. To qualify as a real estate professional, you need to meet BOTH of these tests: 1. More than half of your personal services during the year are in real estate trades or businesses 2. You perform more than 750 hours of services in real estate trades or businesses The key thing is that "real estate trades or businesses" can include property management, even for your own rentals. So theoretically, if one of you reduced your regular work hours and spent significant time on real estate activities (finding properties, managing multiple rentals, etc.), you might eventually qualify. I know someone who transitioned from full-time employment to part-time consulting specifically to meet these requirements once their rental portfolio grew large enough. It's not relevant for your current situation, but something to keep in mind if you expand your real estate investments in the future. For now, definitely follow the advice about tracking those suspended losses carefully - they'll be valuable when you sell or if you acquire more rental properties that generate income to offset against.