A couple tips from someone who was in your position last year: 1. Get a dedicated business bank account ASAP if you don't already have one. Mixing personal and business funds is asking for trouble. 2. For your Schedule C, pay careful attention to inventory vs. expenses. If you're selling physical products, the items you buy for resale go in the Cost of Goods Sold section, not as regular business expenses. 3. If you've been using your personal vehicle for business, track those miles! That's a valuable deduction. 4. Don't stress too much about the LLC transition between states. As others mentioned, for federal taxes you're just reporting on Schedule C regardless.

Logan, you're definitely not alone in feeling overwhelmed - starting a business and handling taxes for the first time is genuinely stressful! But the good news is that your situation is pretty straightforward once you understand the basics. A few key points to ease your mind: **Entity vs. Tax Treatment**: Your LLC is just a legal wrapper - for taxes, you're still filing as a sole proprietor using Schedule C on your personal return. The IRS doesn't care which state your LLC is in for federal tax purposes. **Self-Employment Tax Reality Check**: Yes, you'll owe self-employment tax on your $5,500 profit (about $777 total). It's not optional, but it's also not as scary as it sounds. **Family Loan Handling**: That $15k is a loan, not income, so it doesn't affect your taxes. But do document it properly with a simple written agreement - even family loans should have basic paperwork. **Record Keeping**: Since you're using Stripe/Shopify, you probably have better transaction records than most new business owners. That's actually a huge advantage. One thing I'd add - consider making quarterly estimated tax payments for 2024 to avoid a big bill next year. With $5,500 profit, you probably won't owe penalties for 2023, but planning ahead helps. You've got this! The hardest part is often just getting started.

Don't overlook state requirements for nanny taxes! Each state has different rules and payment systems. For example, in my state (CA), I had to register as an employer with EDD separately from the federal system, and payments are made quarterly through a completely different portal. Also had to get separate workers comp insurance. Check your state's employment department website for household employer information.

Quick tip for anyone doing nanny taxes - get payroll software! I wasted SO much time trying to do this manually before I finally got NannyPay. It costs like $150 for the year and calculates all the withholdings automatically, tells you exactly when and how much to pay for quarterly taxes, and generates all the forms including W-2s at year end.

I dealt with a similar situation after Hurricane Laura damaged my roof and garage. One thing that really helped my case was getting a "scope of loss" document from a public adjuster who reviewed what my insurance company missed or undervalued. Even though I had to pay the adjuster, it was worth it because they found an additional $12k in damages that insurance initially overlooked. For your chimney situation, you might want to consider getting a structural engineer's assessment showing that removing the chimney versus rebuilding it creates a permanent decrease in your home's structural integrity and value. This could strengthen your FMV decrease argument beyond just the aesthetic/functional loss. Also, don't forget that you can deduct the cost of temporary protective measures you took immediately after the hurricane (like tarping, boarding up windows, etc.) as part of your casualty loss. These often get overlooked but they're legitimate disaster-related expenses. Just make sure everything was within a reasonable timeframe after the federally declared disaster.

I went through a very similar situation after Hurricane Michael hit our area. One crucial detail that hasn't been mentioned yet - make sure you understand the timing rules for casualty loss claims. Since yours was a federally declared disaster, you actually have the option to claim the loss on either your 2024 return (the year it happened) OR amend your 2023 return to claim it there, which could get you a refund faster. The key documentation you'll need beyond what others have mentioned is a detailed timeline showing when the damage occurred, when you received the insurance settlement, and when you made the decision to go with the wall replacement instead of full chimney rebuild. The IRS wants to see that you made reasonable efforts to restore the property but were financially unable to do so. For your specific situation with the chimney-to-wall conversion, I'd strongly recommend getting an appraisal or real estate professional's written opinion on how this impacts your home's resale value. A missing chimney can affect both the aesthetic appeal and functionality (no fireplace option for future buyers), which supports your FMV decrease calculation. One last tip - if you're planning to sell your home within the next few years, keep all this casualty loss documentation. It could affect your capital gains calculation since the casualty loss reduces your home's adjusted basis.

This is why I switched to doing my own taxes with software! Too many privacy concerns with these big accounting firms now. They charge premium rates but then outsource the actual work to save money. Not cool.

I understand your concern about SSN security - it's completely valid to be worried about sensitive data crossing borders. What helped me was researching the actual legal framework around this. Under IRS regulations, your accountant remains fully liable for any data breaches or mishandling, regardless of where the work is performed. They're required to have written agreements with any third parties that include specific data protection requirements. Before making a decision, I'd suggest asking your accountant for: - A copy of their data security policy for offshore operations - Details about encryption methods used during transmission - Information about their partner's certifications (ISO 27001, SOC 2, etc.) - Confirmation that all work is reviewed by US-licensed CPAs before submission The CPA shortage is real - my research showed about 300,000 fewer people taking the CPA exam compared to a decade ago. Many firms are being forced into these arrangements just to serve existing clients during tax season. If you're still uncomfortable after getting these details, you might want to shop around for a smaller local firm that hasn't made this transition yet, though they may have longer turnaround times or higher fees.

This thread is incredibly thorough - thank you everyone for sharing your experiences! I'm in a similar boat with a family LLC that's had losses for years, and I never realized I should have been tracking these on Form 8582. One thing I want to add for anyone else reading this: make sure you understand the "material participation" aspect too. Even if you think you're not materially participating in the LLC activities, the IRS has specific tests for this. If you accidentally qualify as a material participant in some years, those losses wouldn't be subject to passive activity limitations and the carryforward calculations get more complicated. I learned this when reviewing my situation - there were a couple years where I spent significant time helping with property management that might have pushed me over the material participation threshold. This means some of my losses might not have been passive losses at all, which affects both the Form 8582 carryforward amounts and how much I can actually claim. Has anyone else run into this material participation complication when reconstructing their passive loss history? I'm wondering if it's worth the extra complexity to analyze each year individually or if most people just treat all LLC losses as passive for simplicity.

This is such a valuable discussion - I'm learning so much! I've been in a similar situation with passive losses from a family partnership that I never properly tracked on Form 8582. One additional consideration I haven't seen mentioned yet: if you're planning to eventually dispose of your interest in the LLC, make sure you understand the "complete disposition" rules. When you completely dispose of your entire interest in a passive activity, you can deduct all suspended passive losses against any type of income (not just passive income). This can make those accumulated losses even more valuable! The timing of when you dispose vs when you have passive income to offset can make a big difference in your tax strategy. If you're planning to sell your LLC interest or if the LLC might liquidate in the future, it might be worth holding onto those suspended losses for the complete disposition rather than using them against small amounts of passive income. I'm curious - for those of you who successfully reconstructed your passive loss carryforwards, did you also factor in potential future scenarios like complete disposition when deciding whether to pursue the analysis? And did your tax professionals help you think through the timing strategy, or did they mainly focus on getting the historical numbers correct?