Has anyone tried MileIQ for retroactively creating logs? My accountant mentioned it but I'm not sure if it can help with past years or just going forward.

One thing that really helped me when I had to reconstruct my 2017 mileage logs was creating a "typical week" template first. I looked at my calendar patterns and identified my regular business destinations, then calculated standard routes between them. For example, if I went to Client A every Monday and Client B every Wednesday, I could establish those as baseline trips and then look for variations. This approach helped me avoid over-estimating miles while still capturing the bulk of my business travel. Also, don't forget to check your car insurance records - sometimes they have annual mileage estimates that can help validate your totals. And if you had any major car repairs or oil changes, those service records often include odometer readings that can serve as checkpoints for your reconstruction. The IRS generally accepts reasonable reconstructions as long as you can show you made a good faith effort using available evidence. Document your methodology clearly - explain what sources you used and how you calculated the mileage. This transparency actually helps your case if you're ever questioned about it.

Word of advice, NEVER go back to that tax preparer. I'm shocked they would claim that including insurance-paid expenses is legal. That's like Tax 101 stuff. For your audit, be super cooperative with the IRS and explain that you relied on your preparer's expertise. You should definitely request penalty abatement under "reasonable cause" since you hired a professional and had no reason to doubt their work.

Edward, I completely understand your stress about this situation. The good news is that medical expense audit issues are actually quite common and the IRS sees them frequently. Since you questioned your preparer about this approach and she insisted it was correct, you have a strong case for reasonable cause penalty relief. Here's what I'd recommend doing immediately: 1) Gather all your medical bills, insurance EOBs, and payment records from the audit years, 2) Calculate your actual out-of-pocket expenses (what YOU paid after insurance), 3) Prepare amended returns showing the correct deduction amounts, and 4) Write a detailed explanation letter describing how you relied on your preparer's professional advice. The IRS typically works with taxpayers who are cooperative and honest about mistakes, especially when a paid preparer was involved. You'll likely owe additional tax plus interest, but penalties can often be waived or reduced significantly. If you can't pay the full amount, the IRS offers installment agreements - don't let the fear of a large bill prevent you from responding promptly. Also, definitely document any communications you had with your preparer about questioning this deduction method. That evidence will be crucial for your penalty abatement request.

Just wanted to add another perspective here - I've been in a similar situation with my partner for about 3 years. We've found that keeping things simple and proportional to income really helps avoid any potential issues. What we do is calculate our combined monthly expenses (rent, utilities, groceries, etc.) and then each contribute based on our income percentage. So if I make 60% of our combined income, I put in 60% of the shared expenses. This way neither of us is really "gifting" money to the other - we're just paying our fair share. The IRS is generally more concerned with large, one-sided transfers that look like you're trying to avoid gift taxes. Normal cost-of-living sharing between cohabiting partners, even unmarried ones, typically doesn't raise red flags as long as it's reasonable and proportional. That said, definitely keep some basic records like others have mentioned. Even just saving your bank statements and maybe a simple note about your arrangement could be helpful if questions ever come up later.

This is really helpful information from everyone! I'm in a similar situation with my partner and we've been wondering about this exact issue. One thing I'd add is that it's worth considering setting up a separate "household" account that you both contribute to proportionally, rather than just having one person deposit large amounts that the other uses. That way there's a clearer paper trail showing both people contributing to shared expenses. We started doing this after reading about potential gift tax issues, and it makes everything much more transparent. Each month we calculate our shared expenses (rent, utilities, groceries, etc.) and transfer our proportional shares based on income into the household account. All shared expenses come out of that account, while our personal spending stays in our individual accounts. This approach has given us peace of mind that we're clearly not making gifts to each other - we're just each paying our fair share of living expenses. Plus, if we ever need to explain our arrangement to the IRS or anyone else, the documentation is crystal clear. The key thing seems to be maintaining that proportionality and keeping good records, which several people have mentioned. As long as you're not just having one person fund everything while the other benefits without contributing, you should be fine tax-wise.

Has anyone tried the IRS's W-4 calculator? I think it's free and supposedly helps you figure out proper withholding based on multiple jobs. Wondering if it would solve part of your problem at least for the W2 portion?

I've been dealing with a similar situation - multiple income streams including S-corp income can really mess with your withholding calculations! One tool that's worked well for me is FreeTaxUSA's TaxCaster. It's free and handles S-corp salary vs distribution scenarios better than most consumer tools I've tried. The key thing I learned is that you need to track your S-corp salary as regular W-2 income for withholding purposes, but then account for the self-employment tax savings compared to if that income was straight 1099. Most calculators miss this nuance. Also, don't sleep on making quarterly estimated payments - even if your withholding is close, having that extra buffer from estimated payments can save you from underpayment penalties. I set up automatic transfers to a separate "tax savings" account so the money is there when quarterly dates roll around. The IRS safe harbor rule is your friend too - if you pay 100% of last year's tax liability through withholding + estimated payments (110% if your AGI was over $150k), you won't owe penalties even if you end up owing more at filing time.

Don't forget about state taxes too! My wife is a nonresident alien and we file jointly for federal, but some states have different rules. In California where we live, we had to file a separate nonresident state return for her foreign income even though we filed jointly for federal. Check your state's rules!

Just want to add another perspective here - we went through this exact situation last year and successfully filed jointly with the standard deduction. The key thing that helped us was understanding that the election to treat your NRA spouse as a resident is made simply by filing a joint return and including both spouses' worldwide income. You don't need to file any separate forms to make this election - it's automatic when you file Form 1040 jointly. However, you do need to attach a statement signed by both spouses saying you're making this election (this is the part many people miss). One tip: calculate both ways before deciding. We ran the numbers filing separately vs. jointly and the standard deduction savings from filing jointly more than offset the extra tax on my husband's foreign income. But every situation is different depending on income levels and what country the foreign income comes from (tax treaties matter!). The IRS Publication 519 has the clearest explanation of this if you want the official source, specifically the section on "Nonresident Spouse Treated as Resident.