This is such a common misconception! I went through the exact same thing when I first started my single-member LLC. Your tax preparer is absolutely right - SEP IRA contributions cannot be deducted as business expenses on Schedule C. Here's what I learned the hard way: as a single-member LLC, you're essentially treated as a sole proprietor for tax purposes. The SEP IRA contribution is considered a personal retirement contribution that you (the individual) are making, not a business expense that your LLC is paying. The good news is you still get the tax deduction - it just goes on Schedule 1 of your Form 1040 as an adjustment to income. This means: - You still reduce your overall taxable income - You still save on federal income tax - You just don't save on self-employment tax (which is calculated on your Schedule C net profit) I know it's frustrating because it feels like you're not getting the "full" benefit, but the income tax savings are still substantial. For 2024, you can contribute up to 20% of your net self-employment earnings (after deducting half of your SE tax) or $69,000, whichever is less. Next year, you might want to consider whether a Solo 401k makes more sense for your situation, especially if you want to maximize contributions at lower income levels.

I'm dealing with this exact same situation right now! Just filed my taxes and my CPA had to explain this to me too. It's so counterintuitive because you think "I'm running a business, this should be a business expense" but apparently that's not how the IRS sees it. What really helped me understand it was when my CPA explained that even though my LLC is doing the business activity, I (the individual) am the one making the retirement contribution. So it's treated as a personal deduction, not a business deduction. The silver lining is that you're still getting significant tax savings on the income tax side. For me, even though I'm paying self-employment tax on that money, the federal income tax savings more than made up for it since I'm in a higher tax bracket. One thing I wish I had known earlier - if you're planning ahead for next year, you might want to consider making estimated tax payments that account for this difference. I got hit with an underpayment penalty because I was calculating my estimated taxes assuming the SEP contribution would reduce my SE tax.

Welcome to all the newcomers! It's both heartwarming and telling that so many of us found this community through the exact same late-night anxiety spiral about IRS letters. I've been a member here for a while and have seen this scenario play out countless times - it really is the most common source of tax-related stress. What I find fascinating about this thread is how it perfectly demonstrates the psychological pattern we all experience with IRS correspondence. The anticipation and unknown is almost always worse than the reality. I've kept a mental tally, and I'd say about 90% of the "mysterious IRS letters" that get discussed here turn out to be routine administrative stuff. For everyone currently waiting for their letters to arrive, remember that the IRS processes literally millions of pieces of routine correspondence every month. Payment confirmations, address change acknowledgments, processing notifications, amended return receipts - all boring but necessary paperwork that can trigger our fight-or-flight response just because it has "IRS" in the return address. Really hoping our original poster comes back with an update soon. Based on all the patterns shared here, I'm confident it's going to be another story we can all smile about once the mystery is solved!

As another newcomer who just discovered this community through the same anxiety-driven search at 1 AM, I can't express how grateful I am to have found this thread! I'm currently experiencing the exact same situation - KSCS letter showed up in my informed delivery yesterday, nothing in my online account, and I've been spiraling ever since. Reading through everyone's experiences has been incredibly therapeutic. The consistent pattern of panic → obsessive checking → catastrophic thinking → mundane reality is so relatable it's almost funny (well, it will be funny once I get my letter and confirm it's boring too!). What really strikes me is how this has become such a supportive space for tax anxiety. I love that we're all sharing our "false alarm" stories to help calm each other's nerves. The fact that so many KSCS letters turn out to be routine administrative stuff that doesn't even show up online is such valuable information for anyone going through this stress. I'm definitely staying tuned for the original poster's update - at this point we're all invested in seeing another anticlimactic ending to add to this reassuring collection of stories. Thank you all for making me feel so much less alone in this particular flavor of adulting anxiety!

Just be careful with the depreciation calculations if the property was already being depreciated before it went into the trust. When I inherited a rental through a trust, I messed up by starting depreciation from the full value again instead of continuing the existing depreciation schedule. Also, keep in mind that when you transfer property from a trust to a beneficiary, it's generally not considered a sale, so there's no "step-up" in basis. Your husband will continue the same depreciation schedule that the trust was using, not start over with the current market value.

Great question about trust taxation! I went through something very similar when my grandmother's trust had rental income before we could transfer the property. You're on the right track with your thinking. Yes, you can absolutely deduct all those legitimate rental expenses on the 1041 - depreciation, utilities, maintenance, and the attorney fees for the property transfer are all deductible. The attorney fees would go under administrative expenses since they relate to trust administration. If your deductions bring the trust income below $600, you're technically not required to file a 1041. However, I'd strongly recommend filing anyway, especially since you're dealing with a property transfer. It creates a clean paper trail and properly documents the trust's final activities. Regarding adding the income to your personal return instead - unfortunately, that's not how trust taxation works. The trust is a separate tax entity, so the income it earned while it owned the property must be reported on a 1041. Your husband will receive a K-1 showing his share (100% as sole beneficiary), and that flows to your joint return. One thing to consider: make sure you're handling the depreciation correctly during the transition period. The trust can claim depreciation for the months it owned the property, then your husband continues the depreciation schedule (with the same basis) after the transfer. Filing a final 1041 marked as "Final Return" will officially close out the trust's tax obligations. It's worth doing it right to avoid any future complications!

As someone who just went through a very similar situation, I completely understand the confusion! I'm new to this community and relatively new to navigating employment tax forms, so when my HR department mentioned forms I'd never heard of, I immediately started second-guessing myself. What I've learned from this fantastic thread is that the confusion almost always comes from companies using their own internal terminology rather than official IRS form names. It's actually quite common for HR departments to create shorthand or codes that don't align with what you'll find on the IRS website. The approach that's worked best for me (and seems to be the consensus here) is to politely ask HR to show you the actual forms and explain what specific type of income or situation each one addresses. Most HR representatives are totally understanding once they realize there's been miscommunication about form terminology. I'm definitely saving the reference list of official IRS withholding forms that was shared earlier (W-4 for regular employment, W-4P for pensions/annuities, W-4V for voluntary withholding from government benefits, W-4S for sick pay). Having that baseline knowledge makes it so much easier to identify when something might be company-specific terminology. Don't feel embarrassed about asking questions - it's actually the smart, professional approach when dealing with tax withholding. Better to get it right the first time than deal with potential withholding issues later! This community has been incredibly helpful in turning what seemed like a tax mystery into a manageable situation with clear action steps.

As a new community member who recently dealt with almost identical confusion, I can't emphasize enough how helpful this entire discussion has been! I was in the exact same boat - my HR department mentioned some withholding forms that I couldn't find anywhere online, and I was starting to panic thinking I was missing something important. What really resonates with me is how many people have experienced this same confusion with company-specific terminology. It's such a relief to learn that when HR uses unfamiliar form names, it's usually their internal shorthand rather than some obscure IRS requirement you should know about. The practical advice throughout this thread has been invaluable - especially the recommendation to ask HR to show you the actual forms rather than just going by verbal descriptions. I was honestly hesitant to admit I didn't recognize the forms they mentioned, but now I understand that asking for clarification is actually the professional approach. I'm definitely saving that reference list of official IRS withholding forms (W-4, W-4P, W-4V, W-4S) that was shared earlier. Having that baseline knowledge should help me identify when something doesn't match standard IRS terminology in the future. Thanks to everyone who shared their experiences and expertise - this community has turned what felt like an overwhelming tax mystery into a clear, manageable process. It's amazing how much peace of mind comes from knowing that this confusion is totally normal and almost always has a simple explanation!

Has anyone tried just using the IRS e-file system instead of faxing? I've submitted most of my documents electronically through their portals and haven't needed to fax anything for the past two years.

I've been using RingCentral Fax for sending documents to the IRS and it's been solid. What I really like about it is that they provide detailed transmission reports that include not just delivery confirmation, but also the exact time stamps and even the quality of the transmission. One thing I learned the hard way - always double-check the IRS fax number you're sending to. Different departments have different fax numbers, and I once sent my documents to the wrong one and had to resend everything. The IRS website has a directory of fax numbers by department and form type. Also, if you're sending multiple pages, I'd recommend calling the IRS first to confirm they received everything. Even with confirmation receipts, pages can sometimes get separated or lost in their system. Better to verify than to find out months later that they're missing page 3 of your submission!