Make sure you're setting aside money for taxes on your moonlighting income! This sounds obvious coming from a CPA but you'd be surprised how many tax professionals get this wrong. You'll likely need to make quarterly estimated payments unless you adjust your W-4 withholding at your day job. Also, track your time meticulously for billing and to justify deductions. I use toggl.com for easy time tracking between different clients.

Great question and congrats on the new baby! I started moonlighting about 2 years ago in a similar situation - corporate accounting role with a growing family needing extra income. A few things I learned the hard way: First, absolutely get your own E&O insurance before taking on any clients. Even if you think you're just doing "simple" returns, mistakes happen and the liability exposure is real. Second, be strategic about your client mix - I found that focusing on W-2 employees with maybe some investment income gives you predictable scope and timing. One thing that really helped me was being upfront with my day job employer early on. I scheduled a brief meeting with my manager and explained I was looking to do some part-time tax prep work that wouldn't compete with our business or interfere with my responsibilities. They appreciated the transparency and it actually opened up some conversations about potential advancement opportunities. The key is positioning it as professional development rather than just needing money. Frame it as staying current with individual tax law and building client service skills. Most employers understand that CPAs often do some side work, especially tax prep. Start small - maybe 3-5 clients your first year to see how you handle the workload during busy season. You can always scale up once you get a feel for the time commitment.

question - if I estimate now using FreeTaxUSA 2023 software and create an account, can I just log back in when I have my actual W-2 and 1099 forms and file from there? or would I need to start over?

Thanks for the heads up about the early release! I've been using FreeTaxUSA for the past few years and really appreciate being able to do tax planning before the rush. One tip I'd add - if you're estimating now, make sure to save different scenarios. I usually create versions with conservative estimates and then more optimistic projections to see the range of what I might owe or get back. Also worth noting that if you have any major life changes planned (marriage, new job, etc.), you can model those too to see how they'd impact your taxes. Really helps with financial planning for the year ahead.

Just wanted to add one more important detail that hasn't been mentioned yet - make sure you're actually qualifying as a "trader" rather than an "investor" before making the 475(f) election. The IRS has specific criteria for this, including trading frequency, holding periods, and whether trading is your primary business activity. If you don't meet the trader status requirements, the election won't be valid and you could face issues down the road. The basic test is whether you're engaged in trading as a trade or business, not just for investment purposes. Things like having substantial trading activity, short holding periods, and deriving income from daily market movements rather than long-term appreciation all support trader status. I'd recommend documenting your trading activity thoroughly to support your qualification if the IRS ever questions it.

Great discussion everyone! As someone who's been through this process, I wanted to add a few practical tips that helped me. First, when you create your election statement, make sure to keep multiple copies - one for your records, one with your tax return, and a backup. I actually sent mine via certified mail just to have proof of delivery, even though I was filing electronically. Also, once you make the 475(f) election, remember it's generally irrevocable without IRS consent. This means you'll need to use mark-to-market accounting for all future years unless you get permission to change. Make sure you're really committed to being a full-time trader because switching back requires filing Form 3115 and getting IRS approval. One last thing - start keeping meticulous records right away. With MTM accounting, you'll need to mark all your positions to market value at year-end, which means tracking the fair market value of every security you hold on December 31st. This becomes much easier if you start organizing your record-keeping system early in the year rather than scrambling at tax time.

As someone who recently went through this exact same confusion with my CPA, I can confirm what everyone else is saying - your accountant is definitely wrong about the quarterly requirement. I ended up calling the SSA directly (after a very long hold) and spoke with a representative who explained that Social Security credits have been calculated annually since 1978. What's frustrating is how many tax professionals seem to have this outdated information. In my case, I had been artificially spreading out my consulting payments across quarters for two years because my CPA insisted it was necessary for Social Security credits. Turns out I was just making my cash flow more complicated for no reason! The SSA rep I spoke with was actually quite familiar with this misconception and mentioned they get calls about it regularly. She recommended always referring to the current year's "How You Earn Credits" publication directly from SSA rather than relying on secondhand information, even from tax professionals. Your example of earning $6,560 in December would absolutely give you all 4 credits for the year. The SSA computer systems look at your total annual earnings reported on your tax return - they don't care about the timing of when you received those payments.

I'm a retired SSA claims representative with 30+ years of experience, and I can definitively confirm that your accountant is incorrect. Social Security credits have been calculated on annual earnings since 1978 - there is absolutely no quarterly requirement. The confusion likely stems from the fact that we still use the term "quarters of coverage" in some official documentation, which is a holdover from the pre-1978 system. Back then, you literally had to earn a minimum amount in each calendar quarter to get credit for that quarter. But that system was abolished decades ago specifically because it was unfair to people with irregular income patterns. Under the current system, you could earn your entire year's income in a single day and still receive all 4 credits, as long as you meet the annual threshold ($6,920 for 2024). The SSA's computer systems calculate credits based solely on the annual earnings amounts reported on your W-2s and 1099s. I've seen countless cases where tax preparers confused this with quarterly estimated tax payments or simply never updated their knowledge from the old system. Your accountant needs to review the current SSA guidelines immediately, as this type of misinformation can seriously impact clients' financial planning and business decisions.

Has anyone actually calculated the break-even point where a Blocker corp makes sense for a leveraged real estate investment in an IRA? I'm looking at buying a $400k rental property with about 40% down from my IRA funds.

Great breakdown of the real estate calculation! For crypto investments in self-directed IRAs, the UBIT analysis is quite different. Most passive crypto holding doesn't generate UBTI, but if you're using leverage (like margin trading or DeFi borrowing), you could trigger UDFI similar to real estate debt financing. The key difference is that crypto trading activities might also create UBTI if they're considered a "trade or business" rather than passive investment. Frequent trading, mining operations, or yield farming could all potentially qualify as business activities subject to UBIT. For leveraged crypto positions, you'd calculate the debt-financed portion similarly to real estate - if you're borrowing 50% to purchase crypto that generates yield (staking rewards, lending income, etc.), that portion could be subject to UBIT. However, since crypto is more volatile and the income streams are different, the math can be trickier to predict than rental property cash flows. A Blocker corp might make sense for substantial leveraged crypto operations, but for most individual investors doing occasional leveraged trades, the compliance costs would likely outweigh the benefits.