I just went through this exact scenario with my consulting LLC! The good news is that proper expense reimbursements are totally legitimate and the LLC can still deduct them. Here's what worked for me: 1. Create detailed expense reports for each reimbursement showing the business purpose, date, amount, and vendor 2. Keep all original receipts 3. Have the LLC formally approve and pay the reimbursements (don't just transfer money informally) 4. Record everything properly in your books - the LLC records the expense and the reimbursement as separate transactions The key distinction is that these are reimbursements for legitimate business expenses, not distributions or loans. As long as the expenses would have been deductible if paid directly by the LLC, they remain deductible when reimbursed. One thing to watch out for - make sure you're not double-deducting. The LLC takes the deduction, not you personally. And get those reimbursements processed before year-end if you want the deductions this tax year! Your accountant should be able to confirm all this when they're back, but you're definitely on the right track with your thinking.

I'm dealing with a very similar situation right now! My LLC partner and I paid around $3,200 in startup costs personally while waiting for our business bank account to get set up. From what I've researched and learned from our CPA, the LLC can absolutely deduct these expenses as long as they're legitimate business costs and properly documented. The fact that you paid personally first doesn't disqualify them - it's actually pretty common for new LLCs. Here's what our accountant told us to do: - Create expense reports with receipts showing business purpose for each expense - Have both LLC members formally approve the reimbursements (we just did this via email and kept records) - Process the reimbursements through proper business accounting (not just casual transfers) - Make sure to get reimbursed before year-end if you want the deductions this year The reimbursements aren't taxable income to you since you're just getting back money you spent for the business. And the LLC gets to deduct the full business expenses. Your loan idea could work too, but honestly the reimbursement route is simpler and achieves the same tax result. Just make sure everything is well-documented in case of an audit!

Has anyone also looked into the potential state tax implications? Federal and state rules for dependents sometimes differ.

I'm dealing with almost the exact same situation with my father who receives SSI. After reading through all these responses and doing my own research, I can confirm that claiming your mother as a dependent will NOT affect her SSI benefits at all. The IRS and SSA operate independently for these purposes. Just make sure you keep good records of all the support you provide - receipts for food, utilities, medical expenses, etc. You'll need to show that you provide more than half of her total support for the year. With SSI being only $914/month ($10,968 annually), if you're covering housing, food, and medical expenses, you're almost certainly providing more than half. One thing I learned that might help - you can also deduct unreimbursed medical expenses you pay for her if you itemize, even if they don't exceed the AGI threshold for your own medical expenses. Every bit helps when you're caring for an elderly parent!

Has anyone tried the calculator on the IRS website? I heard they finally added better tools for self-employed people but haven't checked them out myself.

As a fellow freelancer who went through this exact struggle, I can't recommend enough that you set up quarterly estimated tax payments if you haven't already - it makes SEP IRA planning so much easier! When you're paying estimated taxes quarterly, you get a much clearer picture of your actual net self-employment earnings throughout the year. I use a simple tracking spreadsheet where I log my income and expenses monthly, then calculate my running SEP IRA contribution limit. This helps me make smaller contributions throughout the year instead of scrambling at tax time. The key insight that helped me was realizing that your SEP IRA contribution is essentially an additional business deduction that reduces your taxable income. One thing to watch out for with variable income - don't max out your contributions early in the year based on a good quarter, because if your income drops later you might exceed the limits. I learned this the hard way and had to deal with excess contribution penalties. Better to contribute conservatively throughout the year and make a final catch-up contribution after you know your actual annual numbers.

Great question about depreciation! As someone who's been through this exact confusion, let me add a few practical tips that helped me navigate this maze. First, regarding your specific assets - the laptop ($1,850), furniture ($3,200), and software ($1,100) - Section 179 is likely your best bet since your total is only $6,150 and you have $42,000 in business income. This lets you deduct everything immediately rather than spreading it over multiple years. One thing I learned the hard way: make sure you have documentation showing when each item was "placed in service" for your business. The IRS cares about the actual date you started using it for business purposes, not necessarily when you purchased it. Also, don't forget about the "business use percentage" if any of these items are used partially for personal purposes. The laptop needs to be used more than 50% for business to qualify for Section 179, and you can only deduct the business-use portion. For record keeping, I created a simple spreadsheet with columns for: Item Description, Purchase Date, Cost, Business Use %, Section 179 Deduction Claimed, and Receipt Location. This saved me tons of headaches later. One last tip: if you're unsure about anything, consider getting at least a consultation with a tax professional for your first year. Business depreciation mistakes can be costly if the IRS comes knocking later!

@Keisha Robinson - Based on your situation, I'd strongly recommend going with Section 179 for all your equipment. With $42,000 in business income and only $6,150 in qualifying assets, you can deduct the entire amount this year and significantly reduce your tax liability. Here's a quick breakdown for your specific items: - Laptop ($1,850): Fully deductible under Section 179 (assuming >50% business use) - Office furniture ($3,200): Fully deductible under Section 179 - Software ($1,100): Fully deductible under Section 179 The immediate deduction will likely save you more in taxes this year than spreading the depreciation over 3-7 years, especially if you expect your income to grow in future years. For TurboTax, look for the "Section 179 Election" when you're entering your business assets. It should walk you through each item and let you choose the deduction method. Make sure you have your purchase dates and receipts organized - TurboTax will need the exact dates you started using each item for business. One important note: keep detailed records of when you "placed in service" each asset for business use, as this determines which tax year you can claim the deduction. Good luck with your return!

I worked through a $55k tax debt over 4 years. What really helped me was increasing my withholding at work so I'd get bigger refunds each year that would apply to my debt. Also made sure to claim every legitimate deduction and credit. Made a huge difference in how quickly the balance went down. Good luck!!

I went through something very similar a few years back - owed about $72k to the IRS and it felt completely overwhelming. The fact that you're already on a payment plan and making consistent payments is huge, so don't underestimate that progress you've made. One thing that really helped me was requesting a Collection Information Statement review. Even though I was on a payment plan, my financial situation had changed since I first set it up, and I was able to get my monthly payment reduced from $2,100 to $1,400 based on updated income and necessary expenses. The IRS is more flexible than people think if you can document legitimate financial hardship. Also, definitely look into penalty abatement if you haven't already. I got first-time penalty abatement for some years and reasonable cause abatement for others, which knocked about $8,000 off my total balance. Even if you've had issues in the past, there might be specific circumstances that qualify for relief. Keep making those payments and stay in communication with the IRS - you're on the right track even though it feels like a mountain to climb right now.