Anyone have suggestions for tracking this stuff easily? I'm terrible at keeping receipts and always forget which client meeting was for what by tax time.

I've been dealing with this exact situation for my home-based marketing consultancy. One thing I learned the hard way is to be very specific about the "ordinary and necessary" requirement - the IRS can be picky about what they consider reasonable. I keep a simple spreadsheet with columns for: date, client name, business purpose/topics discussed, food items purchased, alcohol purchased (if any), total cost, and any outcomes from the meeting. This has been a lifesaver during tax prep. Also worth noting - if you're providing meals regularly to the same clients, make sure each meeting has a legitimate business purpose beyond just maintaining relationships. The IRS wants to see actual business discussions that could reasonably lead to income. I learned this when my accountant questioned why I had 8 "client consultation" meals with the same person in 6 months - turned out fine because we were working on a long-term project, but it's good to be prepared to explain the business necessity. One last tip: consider the optics of your alcohol purchases. A $25 bottle of wine for a 2-hour evening business discussion is very different from expensive cocktails. Keep it professional and proportionate to the meeting's importance.

Has anyone had success getting these credits without having the actual receipts? We did a bunch of energy efficient windows about 4 years ago but the company went out of business and I can only find the initial quote, not the final receipt.

This is such valuable information! I had no idea about the amended return option for energy credits. For anyone gathering documentation, I'd also recommend checking with your local utility company - they sometimes keep records of energy efficiency rebates or incentives that can help prove your improvements qualify for the tax credits. Also worth noting that if you financed any of these improvements through a specific energy efficiency loan program, those lenders often maintain detailed records of qualifying equipment that could serve as backup documentation if your original receipts are missing. One thing I learned the hard way - make sure to check if your state offers additional energy efficiency tax credits that stack with the federal ones. Some states have their own programs with different qualification requirements, so you might be leaving even more money on the table!

Dealing with this exact issue was a nightmare for me last year. One thing nobody mentioned yet - make sure you have the CFC's "tested income" calculation done correctly. My accountant initially included income from active business that should have been excluded from GILTI.

As someone who's been through multiple CFC acquisitions, I want to emphasize something crucial that could save you significant money - make sure you get the purchase price allocation right in your acquisition documents. The way you allocate the purchase price between tangible assets, intangible assets, and goodwill can dramatically affect your future GILTI calculations. If you can allocate more of the purchase price to depreciable tangible property, you'll get a larger "qualified business asset investment" (QBAI) deduction against your GILTI inclusion in future years. This is especially important for December acquisitions since you'll be dealing with GILTI calculations immediately. Many buyers overlook this during the transaction and end up paying much more GILTI tax than necessary. The regulations under Section 951A allow for significant planning opportunities if you structure the acquisition properly from the start. Also, don't forget to make the high-tax election under Section 951A(c)(2)(A)(i)(III) if your CFC paid substantial foreign taxes. This can completely eliminate GILTI on high-taxed income, but you need to make the election with your return - it's not automatic.

I went through the exact same thing with my consulting business! Filed Schedule C with zero income and about $8,000 in legitimate business expenses - office setup, professional development, networking events, etc. The loss offset my W-2 income and saved us about $2,400 in taxes. The key thing that helped me was keeping meticulous records showing business intent. I documented my business plan, saved emails with potential clients, kept meeting notes, and made sure my home office was used exclusively for business. When you have a clear paper trail showing you're running a legitimate business (not a hobby), the IRS loss rules work in your favor. One thing to watch out for - some expenses like business meals are only 50% deductible, and there are limits on certain deductions. But overall, yes, you absolutely can and should claim those expenses even with no revenue yet!

This is a really common situation with new businesses! You're absolutely right to claim those expenses even without revenue yet. I had a similar setup with my web design business - worked my day job while building the business on the side, had legitimate expenses but no income the first year. The key is that you're running a legitimate business with profit motive (which your wife clearly has with the contract in place). File Schedule C showing $0 income but listing all the legitimate business expenses. The resulting loss will reduce your overall tax liability on your joint return. Just make sure you can justify each expense as necessary for the business and keep detailed records. The home office deduction is great if that space is used exclusively for business. And don't worry about the timing of revenue vs expenses - that's totally normal for startups. The IRS understands businesses often lose money initially while investing in growth.

Has anyone used a specific tax software that handles partnership losses well? I'm using TurboTax and the way it handles my K-1 from our small LLC seems confusing.

Based on your situation, you absolutely must report the K-1 losses on your personal return - there's no option to skip this. The IRS receives copies of all K-1s and their systems will flag your return if the partnership information doesn't match. However, your concern about the hobby loss rule is understandable after three years of losses. The key is demonstrating profit motive through your business activities. Since you mentioned keeping meticulous records, make sure you also document: business plans showing how you intend to become profitable, marketing efforts, time spent on the business, any changes you've made to improve operations, and evidence that you're treating it as a real business (separate bank accounts, business licenses, etc.). The good news is that $2,000 annual losses probably won't trigger an audit on their own, especially if you have W-2 income and file jointly. Just make sure you can demonstrate the nine factors under Section 183 if ever questioned. Your documentation sounds like you're already on the right track.