What about using a tax professional instead? I tried doing my trading taxes myself last year and it was a nightmare. Is the cost worth it if you have tons of transactions?

Using a tax professional can definitely be worth it, but make sure you find someone who specifically advertises expertise with active traders. A regular CPA might charge you $500+ and still struggle with proper wash sale calculations or 1256 contract treatment. Specialized tax pros who work with active traders will typically charge $750-1500 depending on volume, but they're usually very efficient with the software and know all the edge cases. If your adjusted gross income is high because of your trading activity, the professional preparation fee is usually worth it just for the reduced audit risk alone.

I've used direct import with Fidelity into TurboTax Premier and it worked pretty well for most transactions, but it completely messed up my wash sales that happened across different brokerages. The direct import is convenient but you absolutely need to review everything carefully afterward.

The direct import feature is hit or miss. For TurboTax Premier, I found that Fidelity imports work pretty well, TD Ameritrade is decent but sometimes mislabels option transactions, and Interactive Brokers can be problematic especially for futures contracts. You'll save time overall with direct import, but 100% plan to spend a few hours reviewing everything manually afterward, especially Form 6781 entries.

Thanks for bringing this up! Do you use any specific apps or methods to track your expenses? I'm worried I'll miss things if I don't have a system.

I personally use QuickBooks Self-Employed which automatically categorizes expenses and tracks mileage. It's about $15/month but worth it for me because it integrates with TurboTax for filing. A free alternative that works well is just setting up a dedicated spreadsheet with categories like "Office Supplies," "Software," etc., and taking photos of all receipts with your phone. The most important thing is consistency! Set aside 15 minutes each week to update your records while things are fresh in your mind. For mileage, either use an app or keep a small notebook in your car to jot down odometer readings and the purpose of each business trip. Also, open a separate business checking account if possible - it makes everything so much clearer at tax time.

This is what I do! I just adjusted my W-4 at my day job to withhold an extra $200 per paycheck to cover my side hustle taxes. No quarterly payments needed and I actually got a small refund. Much simpler than dealing with estimated payments.

Omg I never thought of that!! My ex's brother works at a tax preparation place and always seemed shady. We didn't part on good terms at all. How did you find out it was your ex? Did the IRS tell you or did you have to figure it out yourself?

The IRS wouldn't tell me specifically who did it, but they did confirm the fraudulent W-2 came from a company where my ex's new girlfriend worked in payroll. I pieced it together after that. In my case, I had to file a police report and the detective was able to track the origin of the fake W-2 submission. If your ex's brother works in tax preparation, that's definitely suspicious. He would have access to the systems needed to generate a fake W-2. When you talk to the IRS, make sure to mention this possibility - it might speed up their investigation if they have a potential lead.

This is good advice. My transcript had both 570 and 971 codes, and the 971 was because they sent me a letter explaining the issue. Check your mail carefully - they might have already sent you something explaining the hold.

You're right! I just checked again and I do have a 971 code too that I missed before. It's dated for next week so I guess they're sending me a letter. Good to know I should watch for that. Thanks for pointing this out!

10 Wouldn't making Sunset a subsidiary of Blue Ridge defeat the purpose of having separate LLCs for liability protection though? I thought the whole point was to keep the properties legally separate so problems with one don't affect the other.

7 You raise an excellent point about liability protection. Yes, having Sunset as a subsidiary of Blue Ridge would potentially undermine some of the liability protection since they would be connected entities. If liability protection between properties is your primary concern, then keeping them as truly separate entities makes sense. In that case, the capital contribution approach might not be ideal either. You might be better off having Sunset LLC obtain its own financing directly for the new property purchase. That way each property and its associated debt are clearly contained within their respective entities, and the interest expense clearly matches the income-producing activity in each LLC.

1 That makes a lot of sense and aligns with what I've read. Both LLCs are indeed single-member and disregarded for tax purposes, flowing through to my personal return. I was overthinking this! If everything ends up on my Schedule E anyway, then the interest should be deductible against my rental income regardless of which LLC technically has the loan or property. I guess the important thing is just making sure I have proper documentation showing the business purpose of the loan (acquiring rental property). Thanks for pointing this out - sometimes the simplest answer is right there but easy to miss when you're deep in the details!

16 This is such important advice! When I signed my 2848, I didn't read it carefully and gave my accountant permission to receive refund checks. Guess what happened? My $3,800 refund went to them, and while they did forward it to me, it was delayed by almost 3 weeks. Now I'm much more careful about which boxes get checked.

5 Exactly. You want boxes 5a and 5c checked at minimum (that lets them get your tax info and talk to the IRS), but be careful with 5b (receiving refund checks) and 5d (signing returns) unless you specifically want that. And definitely put specific tax years on line 3 - don't leave it open-ended!

11 Agreed about the bank passwords! The most my accountant has ever asked for is read-only access to certain accounts through a secure portal like Plaid, or just PDF statements. Anyone asking for actual passwords is either incompetent or trying to scam you.