One thing I wish I'd done from the beginning: develop clear client acceptance criteria. When you're starting out, it's tempting to take anyone who's willing to pay you, but some clients will drain your time and energy in ways that aren't worth the fee. I now have a checklist of red flags that help me decide whether to take on a new client: - Do they have multiple years unfiled? - Are they bringing you their taxes on April 14th expecting same-day service? - Do they argue about your fees before you've even started? - Are they unwilling to provide complete information? - Do they tell you what their refund "should be"? Being selective about clients from the start will save you major headaches down the road.

This is a really comprehensive checklist! As someone who made the transition from working at a firm to solo practice about 3 years ago, I'd add a couple more items: - Client onboarding process/intake forms (beyond just engagement letters) - having a standardized process helps you look professional from day one - Backup plan for technology failures - what happens if Drake goes down during busy season or your internet cuts out? - Malpractice/liability insurance separate from E&O (depending on your state requirements) - Document retention policy - how long you'll keep client files and in what format Also, since you mentioned potentially buying your current employer's book of business eventually, start thinking about how you'll handle that transition with clients. Having your systems and processes dialed in early will make that much smoother when the time comes. One last tip: consider starting with a smaller subset of services initially rather than trying to do everything from day one. I focused just on individual returns and simple business returns my first year, then expanded into more complex work as I got comfortable with my workflow. Good luck with the venture!

One thing to keep in mind is that even if you structure this as a loan arrangement, the IRS has something called "substance over form" doctrine. They look at the economic reality of the transaction, not just how it's labeled on paper. If you're essentially planning from the start to let the lender take your assets instead of repaying, the IRS could argue this was always intended as a sale, not a genuine loan. This could trigger immediate tax consequences and potentially penalties for trying to disguise a sale as something else. The safest approach is usually to treat any loan against appreciated assets as what it is - a way to access liquidity while maintaining ownership, with the understanding that you'll need to either repay the loan or face the tax consequences of disposition. The wealthy people you mentioned using these strategies typically have much more complex estate planning structures and legal teams to navigate the rules properly.

I've been researching this exact situation for months and want to add a few critical points that haven't been fully covered yet. First, the timing of when you declare your intent matters enormously. If you structure this as a genuine loan with real repayment terms and only later face financial hardship that prevents repayment, the tax treatment can be different than if you go in planning to default. Second, the type of asset matters. With stocks held in taxable accounts, any loan-related disposition triggers capital gains calculations. But if these are stocks in retirement accounts, the rules get even more complex because you're dealing with prohibited transaction rules on top of the regular tax implications. Third, consider state taxes too - some states have no capital gains tax, others treat loan forgiveness differently than the federal rules. If you're in California or New York, the state tax hit alone could be massive. The "buy, borrow, die" strategy mentioned earlier only works if you actually die while holding the assets. If you're forced to liquidate during your lifetime for any reason, all those deferred taxes come due. It's not a magic bullet unless you're certain about the long-term timeline. My advice? Get a tax attorney consultation before doing anything. The potential penalties for getting this wrong far exceed the cost of proper planning upfront.

Quick question for anyone who's dealt with this - if I already provided my SSN to Venmo but STILL got hit with backup withholding, what went wrong? Do I need to contact them specifically about this?

I went through something very similar with Venmo last year! The key thing to understand is that backup withholding isn't necessarily a bad thing - it's just the IRS making sure they get their cut upfront when tax info is missing. Since this was a legitimate loan repayment, you'll definitely get that 24% back. Make sure you keep records of the original loan (texts, emails, bank records showing the initial $2,700 going out) in case the IRS ever questions it. Also, definitely update your tax information with Venmo right away. You can do this in your account settings under "Tax Information" - it'll prevent this headache from happening again. One thing that caught me off guard was that the 1099-K might show up as "business income" in some tax software, so you'll need to make sure you're categorizing it correctly as a non-taxable personal transaction. The backup withholding credit will show up separately and should give you a nice refund boost since you won't actually owe taxes on the repayment amount.

Hi Maggie! I can definitely relate to that initial panic when you see an IRS notice in the mail - my heart always skips a beat! But everyone here is absolutely right that CP60 notices are typically nothing to worry about. Since you mentioned you filed in February and already received your refund, this notice is almost certainly just the IRS's way of documenting that transaction on your account. It's kind of like getting a receipt confirmation email after making an online purchase - just their way of keeping official records. One small tip I'd add: when you do check your account transcript online (which I'd recommend just for peace of mind), look for transaction code 846 around the time you received your refund. That's the code the IRS uses for refund issuances, and seeing that should confirm this CP60 was triggered by your refund processing. You're definitely not alone in finding IRS correspondence confusing - they could really work on making their notices more user-friendly! But you can breathe easy on this one.

Hi Maggie! I totally get why you'd be nervous - I had the exact same reaction when I got my first CP60 notice a couple years ago. Like everyone else has mentioned, these are really just informational notices, not something to panic about. Since you already received your refund back in February, this CP60 is most likely just the IRS confirming that refund transaction on your account. It's basically their way of saying "hey, we processed your return and sent you money, here's the paperwork to document it." I'd definitely echo the advice to check your online account transcript if you want to see exactly what triggered it - it's free and gives you a complete picture of your account activity. But honestly, given your timeline of filing early and already getting your refund, this sounds like totally routine paperwork. The IRS really could do a better job making these notices less scary-looking for regular taxpayers! But you can definitely stop worrying about this one.

Everyone's focusing on the S-Corp salary issue (which is definitely important), but I'm stuck on the home office deduction part. Are you taking the simplified deduction ($5 per square foot up to 300 sq ft) or itemizing actual expenses? Because if you're doing the simplified method, that's something you could easily do yourself without paying a CPA extra. If your tax situation is really just one 1099 and a home office deduction, you might want to consider using tax software next year and save yourself a ton of money. The S-Corp complicates things slightly, but there are reasonably priced options for S-Corps too.

I hate to pile on, but this situation has several concerning elements that go beyond just billing. As someone who's dealt with S-Corp compliance issues firsthand, I want to emphasize how serious the salary requirement is. The IRS has been increasingly aggressive about auditing S-Corps that don't pay reasonable compensation. They have specific guidelines and can look at your industry, geographic location, and business income to determine what's "reasonable." If they audit and find you've been avoiding payroll taxes through distributions-only, you could face: - Back payroll taxes (employer and employee portions) - Penalties and interest - Potential reclassification of your entire S-Corp election Regarding the billing, $2,025 ($1,350 + $675) for a simple S-Corp return is definitely on the high side. For comparison, I pay about $900 for my S-Corp with multiple 1099s and some complexity. The fact that they can't clearly explain the additional charges is a red flag. I'd strongly recommend getting a second opinion from another CPA, both on your tax compliance and the appropriate fees. Make sure to ask specifically about setting up payroll for your reasonable salary going forward - this needs to be addressed before your next filing.