One thing everyone forgot to mention - if you decide to depreciate rather than using Section 179, and your business has a bad year or closes before the depreciation period ends, you can't just deduct the remaining value all at once. Something to consider if your business fluctuates a lot! This happened to my friend's videography business and he lost out on thousands in potential deductions.

Great question! Yes, you can absolutely deduct equipment purchases made with loan funds. The IRS doesn't care where the money came from - what matters is that it's a legitimate business expense. A few key points for your photography LLC: 1. **Section 179 vs Depreciation**: For $12,500 in equipment, you'll likely want to use Section 179 to deduct the full amount in the first year rather than depreciating over time. Much simpler and gives you the tax benefit immediately. 2. **Documentation**: Keep clear records linking the loan to the equipment purchases. Save receipts, invoices, and loan documents showing the funds were used for business purposes. 3. **Don't forget loan interest**: While the loan principal isn't deductible, the interest you pay on that business loan is a separate deductible expense throughout the life of the loan. 4. **Mixed-use equipment**: If any equipment might be used personally (like a camera you occasionally use for family photos), you can only deduct the business percentage. Since you're an LLC, you'll handle this on Schedule C of your personal return (assuming single-member LLC). The deduction will reduce your taxable business income, which flows through to your personal taxes. Definitely worth consulting a tax pro for your specific situation, but the basic principle is solid - loan-funded business expenses are still deductible business expenses!

I want to share my experience as someone who went through a similar situation last year. I was offered $8,000 in cash for helping with landscaping work, and I was really tempted to just not report it. But after reading about the potential consequences, I decided to do the right thing and report it properly. It ended up being much less painful than I expected. I filed Schedule C for the self-employment income, but I was also able to deduct expenses like gas for my truck, tools I bought, and even part of my cell phone bill since I used it for work coordination. After all the deductions, I only owed taxes on about $5,500 of the income. The peace of mind has been worth it. I sleep better knowing I'm not looking over my shoulder wondering if the IRS will catch up with me someday. Plus, now I have a legitimate track record of self-employment income that could help if I ever want to apply for a loan or mortgage. My advice: report the income, keep good records of your expenses, and consider it a learning experience for handling taxes as a freelancer. It's really not as scary as it seems when you do it properly from the start.

I really appreciate seeing all the different perspectives here. As someone who's dealt with tax issues in the past, I want to emphasize that reporting the income is absolutely the right call, even though it might seem like a hassle now. One thing I haven't seen mentioned yet is that if you're going to be doing this type of work regularly, you might want to consider getting an EIN (Employer Identification Number) from the IRS. It's free and makes you look more professional when working with clients. You can also open a separate business bank account, which makes tracking income and expenses much cleaner come tax time. Also, don't forget about state taxes if your state has income tax. You'll need to report this income there too, but the good news is that most business expenses that reduce your federal taxes will also reduce your state taxes. The most important thing is to start keeping detailed records from day one. I use a simple spreadsheet to track every dollar that comes in and every business expense that goes out. It makes tax season so much easier when everything is already organized.

This is such a common confusion point for self-employed folks! I've been dealing with conference expenses for years as a freelance consultant. One thing I'd add to the great advice already given - make sure you keep detailed records of not just the receipts, but also the business purpose of each trip. The IRS likes to see documentation that shows the conference was directly related to your business. I always save the conference agenda, any certificates of completion, and notes about what I learned that I applied to my work. Also, if you're claiming meals during the conference, remember those are typically only 50% deductible (unless it's a company event where meals are provided to all attendees). The flight, hotel, and conference registration are usually 100% deductible as long as the trip is primarily for business. For your specific situation with the $3,200 in total expenses, that's definitely worth getting right on the timing. The cash basis method that others mentioned is definitely the way to go for most self-employed people - deduct when you pay, not when you use the service.

This thread has been incredibly helpful! As someone who's been self-employed for about 3 years now, I've always been paranoid about getting business travel deductions wrong. One thing I'd add that might be useful - if you're using a business credit card for these expenses, it makes the record-keeping so much easier. My business card automatically categorizes travel expenses and the statements clearly show purchase dates vs. service dates. It's been a lifesaver for situations exactly like yours where you buy tickets in December for February travel. Also, for anyone reading this who's newer to self-employment - don't forget that you can also deduct ground transportation to/from the airport (parking, rideshare, etc.) and even tips for hotel staff if they're reasonable. These smaller expenses add up over multiple business trips throughout the year. The key takeaway from all the great advice here seems to be: deduct when you pay (with some exceptions for multi-year prepaid services), keep excellent records with business justification, and when in doubt, consult the IRS directly or work with a tax professional. Better to get it right than deal with an audit later!

I'm going through this exact nightmare right now and your post really resonates with me. The frustration of having all your documentation correct but still being caught in this bureaucratic web is infuriating. One thing I learned from my situation is to also request a "provisional credit" from the bank while they investigate. Under Regulation E, they're required to provide this within 10 business days if you dispute the transaction as unauthorized (which this technically is, since you never authorized a deposit to someone else's account). The bank might resist this initially, but mentioning Reg E specifically often changes their tune. Also, when you file that police report today, ask the officer to include "unjust enrichment" in addition to theft - this covers the legal concept that someone shouldn't profit from money that isn't rightfully theirs, even if the initial deposit was a mistake rather than intentional fraud. I've been documenting everything with timestamps like you mentioned, and I'm creating a timeline of all communications. It's tedious but has already proven helpful when different bank representatives give conflicting information. The precision you're showing in handling this will definitely work in your favor. Keep us posted on your progress - there are clearly several of us dealing with similar issues and your detailed approach is helping others navigate this maze. You're going to get through this!

I'm dealing with a very similar situation right now - my $1,847 refund was deposited into someone else's account at Wells Fargo on February 28th. What's particularly frustrating is that I triple-checked my routing and account numbers before filing, yet somehow the deposit still went astray. The advice about contacting your state banking commissioner is excellent - I hadn't considered that avenue. In my case, I've found that escalating to the bank's "Executive Customer Relations" department (not just regular customer service) has been more effective. They seem to have broader authority to expedite these situations. One additional tip that helped me: I requested a "deposit verification letter" from the bank confirming the exact date, amount, and account the funds were deposited into. This document became crucial evidence when speaking with both the IRS and filing my CFPB complaint. The bank was initially reluctant to provide it, but when I mentioned it was needed for a federal investigation, they complied within 24 hours. Also, make sure to ask the IRS for a "refund trace case number" when you follow up on your Form 3911. This gives you something concrete to reference in future calls and helps prevent having to restart the explanation process with each new representative. The police report angle is smart - in my jurisdiction, they classified it as "theft by conversion" which carries more weight than simple theft. Keep detailed records of every interaction with timestamps, as you're already doing. This level of documentation often impresses government agencies and can expedite resolution. Hang in there - this process is exhausting but you will get your money back!

I went through this exact same situation with a CP2000 notice showing different TP FIG and "per computer" amounts. The key thing to understand is that the IRS isn't necessarily right just because they have computers - they're working with the information that was reported to them by third parties (employers, banks, etc.). In my case, the discrepancy was because my employer had submitted a corrected W-2 that the IRS processed, but I had filed my return before receiving the correction. The "per computer" amount reflected the corrected information while my "TP FIG" was based on the original W-2. Don't panic about the $1,200 difference - these notices are designed to look scary but they're often resolvable. Since you mentioned the 1099 contract work, double-check if you reported it on the correct line of your return. Sometimes income gets reported in the wrong section (like Schedule C vs Schedule C-EZ) and the IRS computer flags it as missing even though you included it. My advice: gather all your tax documents, compare them line by line with what's on your filed return, and if you find the error is on the IRS side, respond with documentation. Most of these discrepancies get resolved in your favor once you provide the missing context.

I've been dealing with tax notices for years as a bookkeeper, and the confusion between "TP FIG" and "per computer" amounts is incredibly common. Here's what's happening in simple terms: Your "TP FIG" (Taxpayer Figure) is what you calculated and reported on your return - basically what you or Jackson Hewitt put down as your tax liability or refund amount. The "per computer" figure is what the IRS calculated based on all the tax documents they received about you (W-2s, 1099s, etc.). When these don't match, it usually means they have information that wasn't included on your return, or there's a reporting error somewhere. The $1,200 difference suggests this isn't just a small math error - it's likely a substantial piece of missing income or an incorrect deduction. Since you mentioned a 1099 from contract work, I'd bet that's the culprit. Even if you think you included it, double-check exactly how and where it was reported on your return. The "per computer" amount is generally what you'll need to address, but don't just assume the IRS is right. They make mistakes too, especially when employers or clients submit incorrect or duplicate forms. Take the time to verify their calculations before paying.