Has anyone used business tax software for their 1065 instead of a CPA? Any recommendations? I'm in a similar boat trying to save on accountant fees.

I went through this exact same situation last year with my first 1065 filing! The distinction between income allocation and distributions was the most confusing part for me too. Just to reinforce what others have said - you absolutely will pay taxes on the full $63,000 allocated to you, even though you only took $48,000 in cash. Think of it this way: the partnership earned profits, and your share of those profits ($63,000) is what gets taxed on your personal return. The $48,000 you actually took out is separate - it's just you accessing money that was already allocated to you. The $15,000 difference stays in the business and increases your ownership stake (basis). So when you eventually sell your partnership interest or the business liquidates, that $15,000 will reduce any taxable gain you might have. For the $12,000 capital contribution, that also increases your basis but doesn't affect your current year tax liability. It's essentially you investing more money into the business. One tip - keep really detailed records of all these transactions (contributions, distributions, allocated income) because you'll need to track your basis year over year. It becomes super important if you ever take distributions that exceed your basis, as those become taxable events. Good luck with the filing! It's definitely learnable, but don't feel bad if you end up going back to your CPA this year while you get comfortable with the concepts.

I went through this exact same situation last year when I became trustee for my grandmother's estate. The confusion is totally understandable - the IRS instructions for 1041-ES aren't the clearest! To confirm what others have said: you only mail the payment voucher (the detachable portion) with your check. Keep all the worksheets and calculations for your own records. The worksheets are just to help you figure out the right payment amount, but the IRS doesn't need to see your work. A few additional tips from my experience: - Make copies of everything before you mail it - Send it certified mail so you have proof it was delivered - Double-check the mailing address in the 1041-ES instructions - it varies by state and sometimes by the type of entity - If you're late on this first payment, don't panic. You can include the penalty when you file the final 1041 return The hardest part is that first payment when everything feels uncertain. After that, you'll have the routine down and it becomes much more manageable. Good luck with the estate administration!

Just wanted to add one more thing that might help - if you're ever unsure about whether your payment was processed correctly, you can call the IRS at 1-800-829-0115 and they can confirm receipt of your estimated payment. Have your EIN and the payment date ready when you call. I had a situation where I wasn't sure if my check had been cashed (it took almost 6 weeks to clear), and calling to confirm gave me peace of mind that the payment was properly credited to the trust's account. They can also tell you your current balance and any upcoming payment due dates. Also, keep in mind that if the estate closes before all four quarterly payments are made, you'll need to make a final estimated payment when you file the final 1041 return. The IRS doesn't automatically know when an estate is closed, so you're responsible for making sure all the tax obligations are met through the closing date. Hope this helps ease some of the anxiety around your first trustee experience!

Has anyone else gotten confused about the ordering of NOL usage? My understanding is that you have to use the oldest losses first, but our tax software seems to be applying them differently.

I'm dealing with a similar situation as a new startup owner. One thing that helped me understand this better was realizing that Form 1120 line 29a is specifically for the NOL deduction you're claiming in the CURRENT year, not just tracking your total accumulated losses. Since you have negative taxable income again this year, you won't enter anything on line 29a because there's no positive income to offset. But you're absolutely building up your NOL carryforward balance - you'll have $42,000 from year 1 plus your new $38,000 loss from this year. The key is maintaining good records of these accumulated losses. I keep a simple schedule that tracks each year's NOL separately because when you eventually become profitable, you'll need to apply them in the correct order (oldest first) and follow the 80% limitation rule for post-2017 losses. Don't worry - you're not missing out on any tax benefits by not using the NOLs now. They'll be there waiting for you when your startup starts generating taxable income!

I actually went through the CP63 verification process just last week and can confirm it's not as scary as it seems! The key things that helped me: 1. Called exactly at 10:00am and got through in about 22 minutes 2. Had all my documents spread out on my desk - tax returns from current and previous year, Social Security card, driver's license, and the CP63 notice 3. They asked me about my previous address from 2022, my employer from last year, and the approximate balance on a student loan from 2020 The agent was really patient when I couldn't remember the exact loan amount and let me give a range. The whole verification took about 20 minutes once I got connected. They told me 6-9 weeks for the refund but I'm hoping it comes sooner like others have mentioned. One thing that really helped my anxiety was writing down all the addresses I've lived at in the past 5 years and employers I've had before the call. Having that info ready made me feel more confident. Good luck with your call tomorrow - you'll do great!

I went through this exact same thing about 3 months ago and I know how stressful it can be! Here's what really helped me get through the CP63 verification smoothly: **Timing is everything** - Call RIGHT at 10:00am, not even 10:01. I tried calling later in the day my first attempt and couldn't get through at all. When I called exactly at opening time, I waited about 25 minutes. **Documents to have ready**: Current and previous year tax returns, your Social Security card, driver's license, and definitely the CP63 notice with your reference number. They'll ask for that reference number almost immediately when you connect. **Types of questions they asked me**: Previous addresses going back about 3-4 years, my employer from 2022, and details about a mortgage refinance I did in 2019. When I wasn't exactly right on the refinance amount, the agent was understanding and asked different verification questions instead. The whole process took about 30 minutes once connected. They initially said 6-9 weeks for refund release, but I actually got my money in just under 3 weeks. **Pro tip**: If you're unsure about an answer, say "I'm not completely certain about that exact amount" rather than guessing. They have backup questions they can ask. The agents deal with this all day and are generally pretty patient. You've got this! It's way more routine than it feels when you're going through it. Just breathe and remember thousands of people do this verification every day. Good luck tomorrow!

Has anyone actually gone the SDOP route for small amounts like this? I'm curious what the experience was like and if they actually enforce the full 5% penalty on your highest balance.

I went through almost exactly this situation two years ago with $18 of unreported dividend income from a Canadian account. After consulting with a tax attorney, I went with Option A - filed the delinquent FBAR and amended my return to report the income. The key is crafting a solid reasonable cause statement that emphasizes three things: 1) You were unaware of the FBAR requirement, 2) The amount of unreported income is truly minimal, and 3) You're voluntarily coming forward to correct the oversight as soon as you discovered it. I included documentation showing when I first learned about FBAR requirements and explained that the oversight was clearly not willful given the tiny amount involved. The IRS accepted my reasonable cause explanation and I received no penalties. The SDOP penalty structure is designed for situations involving significant tax avoidance, not honest mistakes with minimal amounts. For $21 of income, paying thousands in penalties would be completely disproportionate. Option A is definitely your best path forward - just make sure to document everything properly and be completely honest in your reasonable cause statement.