23 Is anyone else annoyed that tax software doesn't make it clearer when you're going to owe? Last year I filed through TaxSlayer and it wasn't until the very end that I realized I owed the state $1800. Wish there was a warning earlier in the process.

I've been through a similar situation with unpaid state taxes, and I'd strongly recommend not waiting until you file your 2024 return. Here's why: First, the penalties and interest compound daily, so every day you wait costs you more money. Second, your 2024 state refund won't automatically offset your 2023 debt - you'd have to manually apply it, and by then you could owe significantly more. My advice: Call your state tax agency immediately and request a payment plan. Most states are very reasonable about this, especially if you're proactive. You can often get plans for as low as $50-75/month depending on your financial situation. Some states will even waive penalties if it's your first time owing and you set up a plan quickly. Don't let this stress eat at you - the sooner you address it, the more options you'll have. I waited too long once and ended up paying almost double in penalties what I originally owed in taxes. Learn from my mistake!

One thing nobody's mentioned yet - make sure your SMLLC actually qualifies for S-Corp status! You need to meet the requirements like having only allowable shareholders (individuals, certain trusts, estates), no more than 100 shareholders, only one class of stock, and not be an ineligible corporation. I've seen people go through this whole process only to find out their LLC wasn't eligible in the first place.

I'm going through a very similar situation right now! Filed as SMLLC for two years, just submitted my Form 2553 late election last month. What really helped me was getting clarity on the "reasonable cause" requirement - I focused on explaining how my business income had grown substantially and I only recently learned about the self-employment tax savings potential of S-Corp status through a tax seminar. One tip I learned: the IRS is generally more lenient if you can show the election makes sense for your current business situation rather than just saying you missed the deadline. Also, I requested an effective date of January 1st of this year (not retroactive) specifically to avoid the headache of amending previous returns. My accountant said this approach has a higher approval rate since it doesn't create extra work for the IRS processing center. Still waiting to hear back, but feeling more confident after reading everyone's experiences here. Good luck with yours!

I've used both over the years. My CPA handles my normal taxes, business filings, and helps with planning. Only needed a tax attorney once when I got hit with an incorrect $42k IRS bill for unreported income (was actually my ex-wife's but they came after me). Attorney cost more but had the expertise for that specific legal situation. If you're just trying to get your taxes done right and plan properly, start with a CPA. If the IRS is threatening liens, levies, or criminal charges, then you need an attorney. A good CPA will tell you when it's time to bring in legal help.

Having dealt with both CPAs and tax attorneys, I'd recommend starting with a CPA for your situation. Small business and rental income complications are exactly what CPAs handle daily - they'll help you structure your deductions properly and identify any potential audit red flags before they become problems. The key is finding a CPA who specializes in small business taxation rather than just individual returns. They can set up proper bookkeeping systems, advise on business structure (LLC vs S-Corp, etc.), and handle the rental property depreciation correctly. This proactive approach often prevents the issues that would require a tax attorney later. Tax attorneys are definitely worth their fees when you're facing IRS enforcement actions, potential criminal issues, or complex estate/trust matters. But for maximizing deductions and staying compliant with business/rental income, a good CPA will save you money and keep you out of trouble. If problems do arise later, your CPA can work with a tax attorney as needed.

Don't forget that for some assets like real estate, you can often get historical appraisals done retroactively. We had a commercial property in my parents' trust, and we hired an appraiser who specialized in retrospective valuations to determine what it was worth when my dad died 9 years ago.

One thing that hasn't been mentioned yet is the importance of getting a Form 706 (United States Estate Tax Return) if one was filed for either parent. Even if the estate wasn't large enough to require filing, many attorneys recommend filing anyway specifically to establish the stepped-up basis values for inherited assets. If a Form 706 was filed for your father in 2016, it would contain the fair market valuations of all his assets as of his date of death - this becomes your stepped-up basis documentation. The same applies for your mother's estate in 2023. These forms are incredibly valuable for exactly the situation you're describing. If no Form 706 was filed, you might still be able to file a protective election or late-filed return in some circumstances. This is definitely something to discuss with a tax professional, as the rules can be complex and there are time limitations involved.

Anyone recommend a good tax software that handles rental property sales well? I tried TurboTax last year and it totally messed up my depreciation recapture calculations.

I went through a similar situation last year and learned some hard lessons about capital gains planning. While you can't directly offset the gains from your sold property with improvements to other properties, there are still some strategies worth considering for your current situation. First, make sure you're properly accounting for all the capital improvements you made to the property you just sold - these should increase your basis and reduce your taxable gain. Things like major renovations, roof replacement, HVAC systems, etc. can all be added to your cost basis. For your other properties, those improvements you're planning ($7,800 for flooring, $9,200 for the deck) will still benefit you tax-wise through depreciation over time. Just make sure to keep detailed records and receipts for everything. One thing to consider: if you have other investments showing losses this year, you might be able to harvest some capital losses to offset your rental property gains. Also, depending on your income level, you might qualify for the 0% capital gains rate on a portion of your gain. The tax code around rental properties is complex, so it might be worth consulting with a tax professional who specializes in real estate to make sure you're not missing any legitimate strategies for your specific situation.