Can anyone recommend good tax software that handles Section 179 for side businesses properly? I tried using [redacted] last year and it kept getting confused about my W-2 income counting toward the limitation. I ended up having to override some calculations manually.

Great question! You're absolutely correct in your understanding. The Section 179 income limitation does include your W-2 wages along with your LLC income. This is specifically covered in IRC Section 179(b)(3) and the regulations. For individuals, the "taxable income from the active conduct of any trade or business" limitation includes: - Your Schedule C business income (your LLC's $12,000) - All W-2 wages, salaries, tips, and other employee compensation - Any other trade or business income So with your $85,000 W-2 income plus $12,000 LLC income, you have $97,000 available for the Section 179 limitation, which easily covers your $20,000 equipment purchase. Just make sure the equipment qualifies (used more than 50% for business) and that you're within the overall annual limit ($1,160,000 for 2025). Also keep good records showing the business use percentage if it's mixed personal/business use. One small tip: if your equipment has any personal use, only deduct the business percentage. So if it's 80% business use, you'd claim Section 179 on $16,000, not the full $20,000.

I think mileage deductions are being overlooked here. If you're driving 2 hours to your property regularly, those miles are deductible business expenses if you're treating the STR as active income. At 65.5 cents per mile for 2023, that adds up fast!

The key factor for STR classification is the "average period of customer use" - if it's 7 days or less, the IRS generally treats it as a business activity rather than rental real estate. Given that you're actively managing bookings, communicating with guests, and handling maintenance while guests typically stay for weekends or short trips, you're definitely in active income territory. This means Schedule C filing and self-employment taxes on your net profit (around 15.3%). However, you'll also qualify for much better deductions - all those 2-hour drives are deductible mileage, plus your phone/internet costs, cleaning supplies, maintenance materials, and potentially a home office deduction for the space where you manage bookings. Don't forget about the Section 199A QBI deduction either - if your total taxable income is under the thresholds, you could deduct up to 20% of your STR business income, which helps offset those self-employment taxes significantly.

Consider using IRS Direct Pay instead of waiting to include payment with your mailed 1040-X. You can pay the additional tax immediately, which will stop further interest accrual. When using Direct Pay, select "Amended Return" as the reason and "1040-X" as the form number. I did this last year when I had to amend, and it saved me exactly $87.42 in interest charges over the 18 weeks it took for my amendment to process. The IRS will match your payment to your amendment when it's processed.

I went through a very similar situation when I retired in 2022. Here's what worked for me: Since you filed with H&R Block originally, I'd recommend using their amendment service - it cost me about $75 but saved hours of work since they had all my original data. The key things to remember: 1) You'll need to mail the 1040-X (can't e-file amendments), 2) Include Form 2210 if you owe penalties, 3) Pay immediately through IRS Direct Pay to stop interest from accruing further. My amendment took 17 weeks to process, but paying upfront saved me about $200 in additional interest. Also, double-check if your state requires an amendment too - mine did, and I had to wait for the federal to complete first. The whole process was stressful but manageable if you stay organized. Good luck!

Just went through this exact thing this year. My accountant said the key thing is actual business purpose and documentation. For Schedule E, you need to prove why a luxury SUV over $80k is "ordinary and necessary" for rental property management. That's a much higher bar than people realize. My suggestion: if your Schedule C business has a clearer need for the vehicle, use that. But keep DETAILED mileage logs - date, starting location, ending location, purpose of trip, odometer readings. The IRS loves to audit vehicle deductions and credits.

Great question! I'm in a similar situation with my business. One thing that helped me was understanding that the Commercial Clean Vehicle Credit has different rules than the personal EV credit. Since you're completely self-employed, you have flexibility in how you structure this. From what I've researched, the key factors are: 1. Document business use percentage (needs to be over 50%) 2. Keep detailed mileage logs with business purpose 3. The $80k cap that applies to personal vehicles doesn't apply the same way to commercial use Given your rental income is much higher than your Schedule C business, and you mentioned actively managing properties across multiple counties, Schedule E might be the stronger option. You'd have more income to offset the credit against and clearer documentation of why you need the vehicle for business purposes. Just make sure whatever you choose, you can substantiate the business use percentage with solid records. The IRS tends to scrutinize vehicle-related deductions and credits more closely. I'd recommend starting your mileage tracking right away if you haven't already - there are some good apps that can automatically track this for you. Have you considered consulting with a tax professional who specializes in business credits? Given the complexity and the dollar amount involved, it might be worth the investment to get it right the first time.

IMO the best approach is to check ur transcript weekly after filing. Most ppl in this sub have seen tax debts appear w/in 2-3 wks of processing, but system delays happen esp during peak season (Feb-Apr). If u filed electronically, check WMR first to confirm acceptance, then wait ~10 days b4 transcript should update. TC 150 = assessment posted. TC 971 = notice issued. If u see these but no balance, something's def wrong w/ the system. Pro tip: if u can't pay in full immediately, request payment plan ONLINE before they send the first bill - way easier process!

Based on my experience from 2023, tax debts typically show up on your account transcript within 10-14 days after your return is processed if you e-file. I had a similar situation with unexpected capital gains from selling some stock to cover emergency expenses. Filed on March 3rd, return was accepted March 5th, and the balance due (TC 150) appeared on my transcript March 18th. One thing I wish I'd known earlier - you can actually make payments toward your expected tax debt BEFORE it officially appears on your transcript using Form 1040V or EFTPS. This can help reduce interest accumulation since interest starts from the original due date regardless of when the debt posts to your account. Given your medical expenses situation, this might be worth considering if you want to minimize the total amount you'll owe.