From my experience as a mobile notary, CPA told me something different from what others are saying here. He said I can only deduct home to client mileage IF I have a qualified home office (separate space used EXCLUSIVELY for business). Otherwise my first and last trips of day are considered commuting and not deductible??? Now I'm confused again. Maybe different rules for different mobile businesses? Or did my CPA give me bad advice?

Great question! I went through this exact same confusion when I started my mobile dog training business. The key distinction that helped me understand it is that for truly mobile businesses like pet sitting, your clients' homes ARE your workplace - not just places you occasionally visit. Since you don't have a separate business location (like an office or storefront) where you regularly conduct business, and your pet sitting services can ONLY be performed at client locations, the IRS treats each client's home as a temporary work location. This means your drives from home are business travel, not commuting. The home office deduction is completely separate from this mileage issue. You don't need to claim it to deduct your travel miles. Your living room desk setup is perfectly fine as your administrative base without needing to be a formal "home office." One thing that really helped me was keeping a simple log: date, client name, starting/ending odometer reading, and total business miles. On single-client days, those miles are just as deductible as multi-client days. Your CPA appointment in March will definitely confirm this, but you're absolutely on the right track with tracking all those miles from home to clients. Don't second-guess yourself - that mileage adds up to significant tax savings for mobile service businesses like ours!

Just an FYI - the Final Notice to Pay (CP90/Letter 1058) gives you the right to request a Collection Due Process hearing within 30 days. This can buy you time to get everything in order and also gives you appeal rights if you disagree with anything. File Form 12153 to request the hearing. While the hearing is pending, they can't levy your assets (though liens may still be filed). It's a legitimate way to pause collections while you get your missing returns filed and set up a payment plan.

Based on everyone's experiences here, it sounds like you're at a critical juncture but you still have options. The fact that you're now financially able to address this is huge - many people dealing with Final Notices don't have that advantage. Your immediate priorities should be: 1) Get those missing returns filed within the 30-day window (even if they're not perfect), 2) Call the IRS to let them know you're actively working on compliance, and 3) Consider requesting a Collection Due Process hearing using Form 12153 to buy yourself time if needed. Don't let the TurboTax issues derail you - if you can afford a CPA now, that's probably your best bet for getting accurate returns filed quickly. The IRS cares more about having something on file than perfection at this stage. The key is showing good faith effort before that 30-day deadline hits. Once you're filing compliant and have the returns submitted, the payment plan options everyone mentioned become available. Stay proactive and you should be able to avoid the levy nightmare that some others described.

ur gonna need to setup state tax withholding with ur employer asap if u havent already

Also worth noting that Arkansas allows you to deduct your federal income tax paid from your state taxable income, which can help reduce what you owe. It's one of the few states that does this! Make sure your tax preparer knows about this deduction or look for it if you're filing yourself.

Has anyone actually been audited over this specific issue? I'm in the same boat (S-corp with rental property, managed by property management company) and my CPA says no W-2 needed either. Just wondering if this is something the IRS actually targets or if it's more theoretical risk?

I'm dealing with the exact same situation and honestly, the conflicting advice is driving me crazy! My S-corp has a rental property that's fully managed by a property management company, and I literally just sign the annual tax forms and pay insurance. That's it. My CPA insists no W-2 is needed since I'm not materially participating in the business operations, but then I read horror stories online about people getting audited and owing back taxes. The gray area nature of this rule is so frustrating. What's really concerning me is that even if my CPA is technically correct, will the IRS see it the same way during an audit? I'm starting to think it might be worth just taking a small salary (maybe $2-3k annually) just to have documentation that I'm following the rules, even if it's not technically required in my situation. Has anyone found any definitive IRS guidance specifically about S-corps with fully managed rental properties? The general "reasonable compensation" rules seem to be written more for active businesses, not passive rental investments.

One option nobody's mentioned yet is finding out if your school has a foundation or parent organization that's already a 501(c)(3) that could serve as your fiscal sponsor. When I ran a similar club, we operated under our school's foundation and didn't need our own separate tax status. We still had our own EIN and bank account, but for tax purposes, we were part of the larger organization. You'll need to talk to your school administration to see if this is possible. Some schools are totally set up for this and others aren't.

Just a heads up from someone who's been there - regardless of which route you choose, you should really get your EIN asap. I waited until the last minute when we needed to open a bank account for a fundraiser, and the EIN application process took longer than expected. Getting an EIN is free and relatively simple through the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online