Has anyone here actually had a late S-corp election rejected? I'm in a similar situation and wondering how strict they really are about accepting these.

I went through this exact situation last year and wanted to share my experience. I was a sole proprietor receiving 1099 income and decided to incorporate mid-year with a late S-corp election. The key thing that helped me was being very thorough with my reasonable cause statement. I explained that I was operating as a sole proprietor at the beginning of the year, formed my corporation in August, and immediately filed Form 2553 upon realizing the benefits of S-corp status. I included documentation showing when I first learned about the election deadline and why I missed it initially. My late election was approved and made retroactive to January 1st, so all my 1099 income for the year was treated as S-corp income. This saved me about $4,200 in self-employment taxes compared to staying a sole proprietor. One important detail - make sure you can show you intended to be treated as an S-corp from the beginning of the year. This means filing all your tax returns consistently with S-corp status and not taking any actions inconsistent with being an S-corp during the year. The IRS was actually pretty reasonable about it. Just be honest about your situation, file as soon as possible, and include a clear explanation of your circumstances. Good luck!

Have you considered using tax software instead? I have a small business (LLC) and two rental properties, and I use TurboTax Business. It costs me under $200 all in. Since you're already a CPA with Big4 experience, you probably have enough knowledge to handle it yourself and save thousands.

As someone who's been through similar fee discussions with my CPA, I'd suggest requesting a detailed engagement letter for next year that breaks down exactly what services are included in each fee component. The $1,500 "accounting work" charge is definitely worth questioning given your background and record-keeping quality. When I pushed back on similar charges, my CPA admitted they had automatically included certain review procedures that weren't necessary for my well-maintained books. For comparison, I have a professional services S-corp and two rental properties in a major metropolitan area, and I pay $1,200 for the business return and $2,200 for personal. The key difference might be that I established clear boundaries upfront about what accounting work I handle versus what they do. Consider asking them to walk through their specific value-add beyond basic compliance. Sometimes CPAs get into a routine of charging standard fees without considering the client's sophistication level. Given your Big4 background, you might be paying for services you don't actually need.

Honest question - for $2.75, does it even matter? I mean, is the IRS really going to care if you report it at all? The tax difference is literally pennies.

Paolo, I've been in a very similar situation with small dividend amounts. Here's what I've learned from experience and talking to tax professionals: For $2.75, you're absolutely right to just report it all as ordinary dividends on Schedule B. The IRS recognizes that brokers don't issue 1099-DIVs for amounts under $10, and they don't expect you to have information you can't reasonably obtain. A few practical tips: 1. List your broker's name in column (a) and $2.75 in column (b) 2. Since your total dividends are under $1,500, you can actually just report the total on Form 1040 line 3b without even attaching Schedule B 3. Keep your account statements showing the dividend total as backup documentation And yes, you're correct that ordinary dividends are taxed as regular income. Even if some were qualified dividends (taxed at lower capital gains rates), we're talking about a difference of maybe 25-50 cents in total tax owed. Don't overthink this one - the IRS guidance is clear that you should report based on the information reasonably available to you. For such a small amount, accuracy to the penny isn't expected or required.

My accountant always tells me that for clothing to be deductible it has to be something you wouldn't wear outside of work. Like if you wouldn't be caught dead wearing it to the grocery store then it's probably deductible lol. But if it's just normal clothes with a logo, that's trickier.

This is really helpful information everyone! As someone new to the small business world, I've been wrestling with similar questions about what I can deduct for my consulting business. From reading through all these responses, it sounds like the main factors are: 1) primarily for business use, 2) wouldn't normally wear outside work, and 3) good documentation. The branded polo shirts for your music school seem like they'd clearly qualify since they serve both identification and marketing purposes during lessons and recitals. I'm curious though - for those who have been through audits, did the IRS actually ask to see photos of the clothing items themselves, or were receipts and explanations sufficient? I want to make sure I'm keeping the right kind of documentation from the start. Also @Zainab Ibrahim, have you considered getting a few different styles? Maybe some more "uniform-like" pieces (like branded polo shirts) that are clearly work attire, and then a few promotional items (like t-shirts or jackets) that you could also give to employees or use for marketing events? That might give you even stronger justification for the deduction.

Has anyone used TurboTax to report election betting losses? Does it have a section for this or do I need to use a different software?

Just to add some clarity for everyone asking about documentation - the IRS Publication 529 specifically outlines what records you need to keep for gambling losses. For online platforms like Robinhood, your account statements are usually sufficient IF they clearly show the dates, amounts, and nature of each transaction. However, if you were using prediction markets or betting platforms that don't provide detailed tax reporting, you should definitely create a gambling log. Include the date, type of wager, amount bet, amount won/lost, and the platform used. Keep screenshots of your betting history if possible. One thing I haven't seen mentioned yet - if your total gambling losses exceed $5,000 in a year, you'll need to file Form 4797 in addition to reporting on Schedule A. This is often overlooked but can cause issues during an audit. Also remember that even if you can't deduct all your gambling losses this year (because they exceed your winnings), you can't carry them forward to future years like you can with capital losses. Gambling losses are use-it-or-lose-it each tax year.