14 Just a heads up that many CPAs are completely booked for this tax season already. I waited until February last year and ended up having to file an extension because nobody had availability. Might want to start calling around asap!

Great question! I went through this exact same transition a few years ago. You're absolutely right to consider a professional with your more complex situation - rental properties and side businesses have a lot of nuances that TurboTax might miss. To answer your main question: You will still be the one signing your tax return as the taxpayer. The CPA signs as the paid preparer, but you're ultimately responsible for the accuracy of the information. However, a good CPA will have professional liability insurance and should stand behind their work. Here's what typically happens: You'll have an initial meeting where you bring all your documents (W-2s, 1099s, rental income/expense records, business receipts, etc.). They'll prepare your return and then schedule a review meeting to go through everything with you before you sign. This review is crucial - ask questions about anything you don't understand! One tip: Ask potential CPAs about their experience specifically with rental properties and small businesses. Some are more focused on individual returns and might not be as familiar with Schedule E or Schedule C complexities. Also ask about their audit support policy upfront. Start calling soon though - many good CPAs get booked up quickly during tax season!

Quick question - does anybody know if these LTR 672C notices are something that should be given to a tax professional to handle? I got one too after filing my own taxes with TurboTax for several years. I'm wondering if I should just hire someone to deal with the IRS for me.

I went through something very similar with an LTR 672C last year. The key thing to understand is that this letter means the IRS has determined you received more refund than you were entitled to, and they're now applying that "overpayment" to cover other tax obligations. Based on what you've described, it sounds like you might have unreported income from 2018 that the IRS recently matched up with their records. This is actually pretty common - they get 1099s and W-2s from employers/clients and use automated systems to cross-reference them with your filed return, sometimes years later. My advice: Don't panic, but don't ignore it either. Pull your 2018 wage and income transcript from the IRS website (irs.gov) to see exactly what income was reported under your SSN that year. Compare that to what you actually reported on your return. You'll likely find the missing piece of the puzzle there. If you do find unreported income, you'll need to file an amended return (Form 1040X) for 2018. The good news is that if your overpayment covers the additional tax owed, you might just owe some interest rather than penalties. Make sure to respond within the timeframe specified in the letter - usually 30-60 days.

Quick warning from someone who learned the hard way: if your s-corp has no profit one year but you still take distributions, those distributions could be considerd wages by the IRS and they'll hit you with employment taxes anyway. Happened to me in 2022 and cost me big time.

As a tax professional, I want to emphasize something that's been touched on but bears repeating: the "reasonable salary" requirement is absolutely critical and the IRS takes it seriously. I've seen too many S Corp owners get into trouble by trying to minimize their salary too aggressively. For web design services at your revenue level, $65K is likely in a good range, but you should document how you arrived at that number. Look at Bureau of Labor Statistics data, industry salary surveys, and local job postings for similar roles. The IRS uses a "facts and circumstances" test that considers your education, experience, time devoted to the business, duties performed, and what an independent third party would pay for the same services. One red flag the IRS watches for is a very low salary relative to distributions - if you're paying yourself $30K but taking $120K in distributions, that's going to raise eyebrows. Your current split seems reasonable. Also remember that reasonable compensation can change as your business grows - if you're generating significantly more revenue in future years, your salary should probably increase accordingly. The tax savings are real and legitimate when done properly, but always err on the side of caution with salary levels. The penalties for getting it wrong can be substantial.

Sorry to butt in, but I had a similar issue and I think you're overthinking this. My FAFSA appeal just needed proof of income change, not specifically a "termination letter." I submitted my dad's old 1099s, recent bank statements showing no more deposits from that company, and a simple letter he wrote explaining when and why his contract ended. The financial aid office approved it no problem. They deal with independent contractors all the time - they know you guys don't get formal termination letters! Just call your financial aid office directly and ask what alternative documentation they'll accept instead of focusing on this one document.

I went through this exact situation last year with my mom who was also a 1099 contractor! Your dad is partially right - companies aren't legally required to provide termination letters to independent contractors like they do for employees. But that doesn't mean you're stuck. Here's what worked for us: Instead of asking for a "termination letter," we requested a simple "confirmation of contract period" email. Companies are often more willing to provide basic dates since it's just confirming facts, not making any statements about termination reasons. For your FAFSA appeal, gather these documents: - Your dad's most recent 1099 form showing his previous income - Bank statements from the last 6 months showing when payments from that company stopped - Any final invoice he sent that wasn't paid or was the last one - A simple written statement from your dad explaining when and why the contract ended Most financial aid offices understand that 1099 workers don't have the same documentation as W-2 employees. Call your school's financial aid office directly and explain the situation - they likely have standard procedures for exactly this scenario. Don't let the two-week deadline stress you out too much; they deal with contractor income changes all the time and know what alternative documentation works. Good luck with your appeal!

Question for anyone who's gone through this - did you use a CPA or just tax software for catching up on multiple years? I'm in a similar boat (5 unfiled years) and wondering if it's worth paying a professional or if software is good enough for straightforward W-2 income.

Miguel, I was in almost the exact same situation as you about 2 years ago - 7 unfiled years, also went through a divorce that triggered the whole mess. The good news is that since you've had taxes withheld and likely qualify for refunds, you're not going to face the scary penalties that people who owe money get hit with. Here's what worked for me: Start with the most recent 3 years FIRST since those are the only ones where you can still claim refunds. I used FreeTaxUSA for the older years since they have previous year software available for cheap (like $15 per state return). For the really old years where you've lost the refund window, you still need to file them but there's less urgency. Don't stress about hiring a tax attorney - that's overkill for your situation. A CPA could help but honestly if it's just W-2 income, you can handle this yourself. The IRS is actually pretty reasonable when you're catching up voluntarily and not hiding from them. The hardest part is just starting. Once you file that first return, the momentum builds and it gets easier. You've got this!