Just wanted to add - don't forget about state taxes too! In Pennsylvania (where you mentioned you live), you'll need to file a PA Schedule C with your state return as well. Pennsylvania doesn't recognize LLCs as separate from their owners for tax purposes, similar to federal treatment for single-member LLCs. Also, depending on your local municipality, you might need to file a local business tax return or get a business privilege license. Some PA cities and townships have these requirements even for small side businesses. Might be worth checking with your local government office.

Great question! I went through this exact same situation when I started my consulting LLC alongside my teaching job. A few additional points that might help: Since you're already employed as a high school counselor with taxes withheld, you might want to consider increasing your withholding at your main job rather than making quarterly payments. You can adjust your W-4 to have extra tax withheld to cover the tax liability from your LLC income - this is often easier than remembering to make quarterly payments. Also, don't underestimate your deductible expenses! Beyond the obvious ones like mileage and startup costs, consider things like: - Professional liability insurance (if you get it for your coaching) - Continuing education related to your coaching specialty - Office supplies (even if it's just notebooks and pens for client sessions) - Professional memberships or certifications - Business meals with potential clients (50% deductible) One more tip: Keep detailed records of your time and activities. Since coaching can sometimes blur the line between business and personal development, having clear documentation of your business activities will be helpful if you're ever audited. The Schedule C filing is straightforward, especially with TurboTax, but don't hesitate to consult a tax professional if your income grows significantly or your situation becomes more complex.

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!

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.

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.

As a newcomer to this community, I'm really impressed by the depth of knowledge being shared here! This conversation has been incredibly enlightening about the nuances of luxury vehicle depreciation. From what I'm gathering, the key takeaways for Carmen's client seem to be: 1. The G Wagon CAN qualify for the heavy vehicle exception (over 6,000 lbs GVWR) 2. Bonus depreciation is possible on the business-use portion, but it's phasing down (80% in 2023) 3. The real challenge will be substantiating "100% business use" - this seems to be where most people get into trouble The documentation requirements sound intense, and the social media warning from Giovanni is particularly eye-opening. I hadn't considered how the IRS might use social platforms as audit evidence. It sounds like the client needs to have a very honest conversation about their actual intended use before making this purchase. A $150k+ mistake due to poor documentation or overstated business use could be financially devastating. Thanks everyone for sharing your real-world experiences - both the success stories and the cautionary tales. This has been a great education in tax planning complexities!

As a newcomer to this community, I've been following this discussion with great interest and wanted to add a perspective from someone who's dealt with similar client situations. Carmen, your cautious approach is absolutely the right call here. I've seen too many business owners get seduced by the "tax savings" of luxury vehicle purchases without fully understanding the compliance burden that comes with it. What strikes me most about this thread is how the conversation evolved from the technical tax rules (which, as others have noted, do favor the G Wagon due to its weight) to the practical realities of documentation and audit defense. That shift really illustrates where the real challenges lie. A few additional considerations for your client: - Even with legitimate business use, the optics of deducting a G Wagon can invite scrutiny - Insurance and registration records need to align with claimed business use - If they have employees, there may be fringe benefit implications if others drive the vehicle The resources mentioned here (taxr.ai for analysis, claimyr.com for IRS communication) seem valuable for getting ahead of potential issues. But ultimately, if your client can't honestly say this vehicle will be used primarily for legitimate business purposes with proper documentation, they should reconsider the purchase regardless of the tax benefits. Your instincts to push back on their expectations are protecting them from a much bigger problem down the road.