Has anyone had success claiming WOTC for long-term unemployment recipients? I'm finding it really hard to get proper documentation proving they've been unemployed for 27+ weeks. What specifically counts as proof?

Just wanted to add some practical advice from someone who's been claiming WOTC for about 3 years now. The biggest mistake I see small business owners make is not asking the right questions during the hiring process. You can't just assume someone qualifies - you need to actually ask potential hires about their veteran status, unemployment history, SNAP benefits, etc. I created a simple questionnaire that I have all candidates fill out that covers the main target groups. It's not invasive, just straightforward questions like "Are you a veteran?" and "Have you been unemployed for 6+ months?" Also, keep really good records! The IRS can audit these credits, so document everything. I keep a file for each WOTC employee with their original application, the 8850 form, certification from the state, and all supporting docs. It's saved me headaches during audits. One more tip - don't forget about the credit for hiring people from rural renewal counties. It's one of the lesser-known target groups but if your area qualifies, it can apply to a lot more potential hires than you'd think.

Has anyone here actually upgraded from a normal SUV to one over 6,000 lbs GVWR specifically for the tax advantages? I'm considering trading my Ford Edge (business use about 70%) for a Ford Expedition or similar just to take advantage of the Section 179 expensing and bonus depreciation. Is it worth the extra gas and higher purchase price just for the tax benefits? My CPA says absolutely yes but I'm not convinced.

I've been through this exact situation with my construction business vehicles. The key thing to understand is that the IRS requires you to maintain consistent records of your business use percentage throughout the vehicle's life, not just calculate it once at purchase. For your varying business use percentages (60-70% annually), you need to track this each year because it affects both your annual depreciation deduction and the final disposition calculation. When you traded in that first SUV, if your business use in the final year was different from previous years, the IRS requires you to "true up" the depreciation based on the actual business use over the vehicle's entire life in your hands. The inflated basis on your second SUV ($49K vs $41K) is correct - that's the deferred depreciation recapture from your first vehicle rolled into the new basis under the pre-2018 like-kind exchange rules. You're not losing anything, just spreading the tax impact over a longer period. One crucial point: since you mentioned retiring, be very careful about suddenly dropping business use to zero on a vehicle with remaining basis. The IRS may require you to recapture excess depreciation taken in prior years. Consider gradually reducing business use as you approach retirement rather than an abrupt change. For your GVWR question - the total lifetime deduction is generally the same whether you buy a heavy vehicle or not. The advantage is timing: you can accelerate deductions into earlier tax years when you might be in higher tax brackets, versus spreading them out over the vehicle's depreciation life.

The complexity you're facing with Form 8960 is incredibly common, and you're asking all the right questions. Based on your description of actively managing commercial properties through your LLC, you're in a gray area that requires careful analysis. Here's my take: Your rental activities likely DO qualify as a Section 162 trade or business under the Groetzinger standard (regular, continuous activity with profit motive), especially given your hands-on management approach. However, the passive activity determination is separate and more restrictive. For line 4b adjustments, you can only reduce NIIT for income from trades or businesses that are NOT passive activities. Unless you qualify as a real estate professional (750+ hours annually in real estate activities AND more than half your total working time), your rentals remain passive regardless of your involvement level. The expenses you mentioned (mortgage interest, taxes, repairs) already reduce your Schedule E income before it flows to Form 8960 - they're not additional line 4b adjustments. Your investment advisor fees also don't qualify for line 4b treatment under current rules. My recommendation: Start documenting your time and activities meticulously NOW. Track every hour spent on property management, tenant relations, maintenance coordination, etc. If you can demonstrate you meet the real estate professional thresholds, you could potentially exclude significant rental income from NIIT through line 4b adjustments. Consider consulting with a tax professional who specializes in NIIT and real estate taxation - this area has evolved significantly with recent court cases and the stakes are high enough to justify expert guidance.

The confusion you're experiencing with Form 8960 is completely understandable - this is one of the most complex areas of tax law right now. Let me break down your situation based on what you've described. Your commercial rental properties managed through your single-member LLC likely DO qualify as a Section 162 trade or business under current case law, especially given your hands-on involvement. The Groetzinger standard looks at whether you're engaged in regular, continuous activity with a profit motive - which clearly describes your situation. However, here's the critical distinction that trips up many taxpayers: qualifying as a Section 162 business and being "non-passive" are two separate determinations. For Form 8960 line 4b adjustments, you need BOTH conditions to be met. Unless you can qualify as a real estate professional (750+ hours annually in real estate activities AND it represents more than half your total working time), your rental activities will be treated as passive regardless of how actively you manage them. This is different from the "active participation" standard used for the $25,000 rental loss allowance. Your expenses (mortgage interest, property taxes, maintenance) already reduce your net rental income on Schedule E before it flows to Form 8960 - these aren't separate line 4b adjustments. Similarly, investment advisor fees don't qualify for line 4b treatment under current NIIT regulations. My advice: Start meticulously documenting your real estate activities immediately. Track every hour spent on tenant management, property maintenance coordination, market research, financial analysis, etc. If you can demonstrate you meet the real estate professional thresholds, you could potentially exclude significant rental income from NIIT through line 4b. Given the complexity and potential tax savings involved, consulting with a tax professional who specializes in NIIT and real estate taxation would be a wise investment.

For your situation with $8,400 in eBay sales, you can definitely file Schedule C without any special registration or minimum income requirement. The IRS considers you to be in business if you're buying items specifically to resell them for profit, which sounds like your case with the collectibles. A few key points to keep in mind: - You can deduct the cost of goods sold (what you paid for the items you're flipping) as well as other business expenses like eBay fees, shipping supplies, and packaging materials - Since you're over $400 in self-employment income, you'll also need to file Schedule SE to pay self-employment tax (about 15.3% for Social Security and Medicare) - With $8,400 in income, you might need to make quarterly estimated tax payments to avoid penalties next year - Keep detailed records of all your purchases, sales, and expenses - the IRS may want to see documentation The fact that you're consistently buying and selling collectibles with profit intent clearly puts you in business territory, so Schedule C is the right approach. Just make sure to separate any personal items you might also sell from your actual business inventory.

Great question about cost of goods sold! Generally speaking, if you originally bought something for personal use and later decided to sell it, you can't deduct the original purchase price as a business expense or cost of goods sold on Schedule C. The IRS distinguishes between items purchased with business intent versus personal items that are later sold. However, there are a few nuances to consider: - If you're selling personal items for less than what you originally paid, you typically don't need to report the income at all (no gain = no taxable income) - If you're selling personal items for MORE than you originally paid, you'd report the gain as capital gains income on Schedule D, not as business income on Schedule C - Only items purchased specifically for the purpose of resale can have their cost deducted as cost of goods sold on Schedule C The key factor the IRS looks at is your intent at the time of purchase. If you can document that you shifted from personal collecting to business activity at a specific point, you might be able to treat items acquired after that point differently, but it gets complicated and you'd want to consult a tax professional for that situation. For your eBay business moving forward, just make sure to keep clear records of what you're buying specifically to resell - those are your legitimate business costs.

Just want to add a real-world data point. I run an S-Corp and tried skipping salary for 2 years while reinvesting everything. Got audited and ended up owing back payroll taxes, penalties, and interest on what the IRS determined a "reasonable salary" would have been. They basically looked at what similar professionals in my field made and said I should have been paying myself (and paying payroll taxes on) at least that amount. The audit was triggered because I was actively involved (filed as full-time on my corporate docs) but had zero W-2 wages. They said this was an immediate red flag. Cost me way more in the end than if I'd just taken a salary from the beginning.

I'm dealing with this exact same situation right now as a new S-Corp owner! Reading through all these responses has been super helpful, especially the real audit experience from Daniel. It sounds like the consensus is pretty clear - if you're actively working in the business, you need to pay yourself a reasonable salary regardless of distributions. What I'm taking away is that I need to start documenting everything now: my hours worked, what comparable positions pay in my industry/area, and my business financial situation. Even if I can't afford a full market-rate salary right now during my growth phase, having that documentation seems crucial for justifying whatever salary I do set. Has anyone found good resources for researching what "reasonable compensation" actually means for their specific role and industry? I'm trying to figure out if there are standard databases or surveys that the IRS typically references during audits.