Another helpful tip for tracking Zelle payments - I started including a brief description in the Zelle memo field when possible. Most people don't use it, but you can write something like "Math tutoring 1/15" which shows up in both your records and theirs. It makes the bank statement much clearer about what each payment was for. Also, if you're tutoring the same students regularly, consider setting up a simple recurring payment schedule. I have a few students who pay monthly for weekly sessions - like "$240 for 4 weekly math sessions in January." This reduces the number of individual transactions to track and makes the income pattern more obvious for tax purposes. One more thing about deductions - if you use any apps for scheduling (like Calendly) or communication (like Zoom Pro for online sessions), those monthly subscriptions are fully deductible business expenses. I was paying for these anyway but wasn't tracking them as deductions until someone pointed it out!

I've been doing tutoring for about two years now and learned a lot of this stuff the hard way! One thing I wish someone had told me early on is to consider getting an EIN (Employer Identification Number) even as a sole proprietor. It's free from the IRS website and takes about 10 minutes to get online. Having an EIN makes you look more professional when students ask for your tax ID for their records, and it's way better than giving out your Social Security number. Plus, if you ever want to open a business bank account, most banks prefer an EIN over using your SSN. Also, since you mentioned your income is inconsistent, definitely track your expenses throughout the year even during slow periods. Things like professional development (online courses to improve your teaching), books you buy to stay current in your subject area, and even professional organization memberships can all be deducted. These expenses don't stop just because you have fewer students some months, so they can really help offset your tax burden during your busier earning periods. The quarterly estimated tax payments that others mentioned are crucial once you get going. I made the mistake of not doing them my first year and got hit with penalties even though I paid everything I owed when I filed. Live and learn!

Just my two cents - I messed up my W-4 last year and ended up owing $4,200 at tax time! Don't underestimate how important it is to get this right. My wife and I both checked the "Married filing jointly" box without doing Step 2, and it was a disaster because the system assumed each of us was the only income earner.

Based on your situation, I'd strongly recommend taking the time to work through the IRS withholding calculator even though it's tedious. With your combined income of $153K and the new homeownership, getting this wrong could be costly. Here's a simplified approach: Both of you should select "Married filing jointly" and complete Step 2. Since your incomes are relatively close ($72K vs $81K), the Multiple Jobs Worksheet will be more accurate than just checking the box in Step 2(c). Complete the worksheet once together and enter the result on your wife's W-4 (higher earner) in Step 4(c), while you just check the box in Step 2(c). For your new home, estimate your annual mortgage interest and property taxes, then enter that amount in Step 4(b) on ONE of your forms (don't double up). This will reduce withholding to account for itemizing. Pro tip: Update your W-4s again once you have kids - the child tax credit will significantly change your optimal withholding strategy. Better to adjust multiple times throughout the year than owe thousands in April!

Has anyone run into issues with the annual contribution limits while trying to maximize ABLE account growth? I'm debating whether to: 1) Contribute the max each year and reimburse expenses as they happen 2) Contribute less but let it grow longer by delaying reimbursements I'm worried about hitting the state's maximum account limit ($300k in my state) if I go with option 2.

Great question! I'm in a similar situation on SSDI and have been doing exactly what you're describing for about 2 years now. I save all my QDE receipts and reimburse myself strategically to maximize growth. The key insight is that unlike HSAs which have explicit IRS guidance on reimbursement timing, ABLE accounts operate in more of a gray area. Since you're not on SSI, you don't have the same-month restriction, which gives you significant flexibility. I've been keeping a detailed spreadsheet tracking: original expense date, amount, what makes it a QDE, receipt/documentation location, and whether I've reimbursed it yet. My CPA reviewed this system and confirmed it should hold up to IRS scrutiny. One thing to consider - while there's no explicit time limit, I'd recommend being reasonable about it. Reimbursing a medical expense from 15 years ago might raise eyebrows, but 3-5 years seems very defensible, especially with good documentation. The compound growth potential is real - my account is up 18% this year while I've been letting eligible expenses accumulate. Just make sure you're prepared to provide detailed documentation if ever questioned about the connection between your withdrawals and the original QDEs.

Also, don't forget about the impact of TCJA (Tax Cuts and Jobs Act) on consolidated returns. There are limitations on the net operating loss carryforwards and some changes to how they can be utilized. I think you can only offset 80% of taxable income with NOLs from tax years beginning after 2017, even in a consolidated group.

Just wanted to add something that helped me when I was dealing with my first consolidated return - make sure you have a good system for tracking all the intercompany transactions throughout the year, not just at filing time. We had transactions between our parent and sub that we weren't properly documenting, and it became a nightmare trying to reconstruct everything when it came time to eliminate them on the consolidated return. Things like intercompany sales, loans, rent payments, management fees, etc. all need to be tracked carefully because they have to be eliminated to avoid double-counting income and expenses. I ended up creating a simple spreadsheet that we update monthly now, which makes the year-end consolidation process much smoother. The IRS is very particular about these eliminations being done correctly, so having good records throughout the year is crucial.

This thread has been incredibly helpful! I'm dealing with a similar situation where we want to shut down our S corp but weren't sure about the process. Based on what everyone has shared, it sounds like the key distinction is: - Final return = business is completely done/dissolved - Revocation statement = keep business alive but end S status One follow-up question though - if we're going the final return route (actually dissolving), do we need to distribute all assets to shareholders first, or can we check the final return box even if there are still some assets in the company? I'm worried about creating additional tax complications if we don't handle the asset distribution correctly before filing that final return. Also, does anyone know if there's a specific timeframe we need to follow between state dissolution and filing the final federal return? Our state requires a 60-day notice period before dissolution is finalized, so I'm not sure if we should wait for that to complete before filing with the IRS.

This thread has been a lifesaver! I'm a CPA and see this confusion constantly with my S corp clients. One thing I'd add that hasn't been mentioned yet - there are also timing considerations around the S election termination that can catch people off guard. If you revoke your S election mid-year (rather than filing a final return), the revocation is generally effective the following tax year unless you specify an earlier date and meet certain requirements. This means you might still need to file an S corp return for the current year even after filing the revocation. Also, if you have any built-in gains from when you converted to S status originally, terminating the S election (either through revocation or dissolution) could trigger recognition of those gains. This is especially important for businesses that have appreciated assets or inventory. I always recommend clients get a comprehensive tax projection before making this decision because the tax consequences can vary significantly depending on your specific situation, asset values, and timing. The difference between dissolving vs. converting can literally be tens of thousands of dollars in taxes for some businesses.