what about creating a non-profit arm of your practice specifically for low-income clients? I know a physical therapist who did this and now gets grants to cover part of his costs. took some setup but he said its worth it now.

I'm a CPA who works with several healthcare providers facing this exact situation. While you can't deduct the "discount" itself, there are some legitimate strategies to consider: 1. **Income averaging**: If your sliding scale work creates uneven income patterns, you might benefit from income averaging techniques or retirement plan contributions that smooth out tax liability. 2. **Business structure optimization**: Consider whether your current business structure (sole proprietorship, LLC, S-Corp) is optimal for your income mix. Different structures can affect how you're taxed on varying income levels. 3. **Expense allocation**: Make sure you're properly allocating all business expenses proportionally. If 40% of your clients are sliding scale, ensure you're capturing the full cost of serving them (additional time, payment processing, collections, etc.). 4. **Professional development**: Any training specifically related to serving low-income populations or trauma-informed care could be fully deductible professional development. The key is maximizing legitimate deductions rather than trying to create artificial ones. Your sliding scale work is valuable community service, but the IRS treats it as a business decision that reduces income rather than creating deductible expenses.

Don't forget you need to meet ALL FOUR TESTS for R&D credit: 1) Permitted purpose (creating new/improved functionality) 2) Technical in nature (relies on hard sciences) 3) Technical uncertainty (don't know how to do it from the start) 4) Process of experimentation (systematic evaluation of alternatives) Most software companies fail on #3 and #4. If you know how to build it using existing techniques, it's not eligible even if the software itself is new!

Great discussion everyone! As someone who's been through multiple R&D credit audits, I want to emphasize that documentation is absolutely critical. The IRS doesn't just look at what you claim - they want to see contemporaneous records proving your activities met all four tests. A few practical tips: Start keeping detailed project logs NOW, not when you file your return. Have your developers note when they're experimenting with new approaches versus implementing known solutions. Save failed prototypes and document why they didn't work. Meeting notes discussing technical roadblocks are gold during audits. Also, be conservative with your claims initially. It's better to claim less and be audit-proof than to be aggressive and face penalties. The R&D credit can be carried forward for 20 years, so you're not losing anything by being cautious while you build better documentation systems. One last thing - consider getting a technical memo prepared by a qualified professional that maps your specific activities to the four-part test. This shows the IRS you took the requirements seriously and can be your best defense if questioned.

Don't forget to look into your state's crime victim compensation fund! Depending on your state, they might have resources to help recover some losses while you wait for the court case to resolve. Also, make absolutely sure to file Form 14039 (Identity Theft Affidavit) with the IRS if the embezzler had access to any of your personal information. I had an employee steal from my business and they later tried to file fraudulent tax returns using my info.

I'm really sorry you're dealing with this situation - embezzlement is devastating both financially and emotionally. One thing I'd add to the great advice already given is to make sure you're documenting everything meticulously right now. Keep copies of all bank statements, canceled checks, invoices, and any correspondence with law enforcement. Also, consider reaching out to your bank about their fraud protection services. Some banks have business fraud recovery programs that might help, especially if the embezzler used business accounts or credit cards for the theft. They might also be able to provide detailed transaction records that could help with your tax documentation. Finally, don't forget to review your internal controls going forward. This might be a good time to implement separation of duties, require dual signatures on larger checks, and set up regular bank reconciliations. I know it's closing the barn door after the horse has bolted, but it can help prevent future incidents and might even be required by your insurance company if you get new coverage. Hang in there - this process is overwhelming but you'll get through it!

9 Has anyone tried using H&R Block Premium & Business software instead? It's also Windows-only but about $30-40 cheaper than TurboTax Business, and I've heard it handles C-Corp returns well.

I've been running TurboTax Business Desktop on my Mac through Parallels for the past three years specifically for C-Corp filings, and it's been solid. A few practical tips from my experience: 1. **Resource allocation is key** - Give your Windows VM at least 6GB RAM if you can spare it. TurboTax Business can be resource-heavy, especially when working with larger datasets. 2. **Network stability** - Make sure your Mac has a stable internet connection during e-filing. I've never had connection issues, but I always do the final submission during off-peak hours just to be safe. 3. **Backup strategy** - Save your work frequently and keep backups both in the VM and on your Mac side. I learned this the hard way when a VM crashed mid-session. 4. **Performance tip** - Close other applications on your Mac while running TurboTax to ensure smooth performance. The combination of macOS + Windows VM + TurboTax can be demanding. The $300 investment has been worth it for me - I use the setup for other Windows-only business software throughout the year, not just taxes. If you're only using it for annual tax filing, the cloud VM approach mentioned by others might be more cost-effective.

If your withholding really was only $200 on $60k income, you're going to owe a lot at tax time. You should probably adjust your W-4 immediately for 2025 to avoid being in the same situation next year. You want your withholding to roughly match your expected tax liability throughout the year.

Great job figuring out the issue! This is actually a really common mistake that happens more often than you'd think. The way paystubs display tax information can be confusing, especially when mobile apps show summary views that lump different types of taxes together. For anyone else reading this thread - this is a perfect example of why it's so important to carefully review your paystubs and understand what each deduction represents. Federal income tax, Social Security tax (6.2%), and Medicare tax (1.45%) are all separate items that serve different purposes. Since you only had $200 in federal withholding on $60k income, you're definitely going to owe a significant amount when you file. Make sure you have funds set aside for that tax bill! The good news is you've already fixed your W-4 for 2025, so you shouldn't run into this problem again next year. This whole situation is also a good reminder to periodically check your withholdings throughout the year, especially if you have any major life changes that might affect your tax situation.