Thanks for this advice! Do you use any specific software or app to track your business expenses throughout the year? And how detailed do your records need to be for things like gas or small tool purchases?

I use a combination of QuickBooks Self-Employed and a separate business credit card that I use exclusively for business purchases. This makes it much easier to track everything come tax time. For expenses like gas and small tools, I keep all receipts and take photos of them with my phone immediately (receipts fade over time). The IRS wants to see that there's documentation for your expenses, so having receipts or electronic records is important. For vehicle expenses, you can either track all actual costs (gas, maintenance, insurance, etc.) or use the standard mileage rate - I find the standard mileage rate easier, but you need to keep a mileage log with dates, destinations, and business purpose.

For 2025, payment apps like Venmo are required to issue a 1099-K if you receive more than $5,000 in business transactions for the year. This is down from the $20,000 threshold they had temporarily extended. So at $30k, you'll definitely get a 1099-K that will be reported to the IRS.

Do self-directed IRAs have different rules about distributions? Like could OP have done these exact investments but avoided the tax hit if they were already in a self-directed account?

Self-directed IRAs follow the same basic distribution rules as any IRA. The difference is what you can invest in while the money remains inside the IRA. If OP had already set up a self-directed IRA before making these investments, they could have made the hard money loan and purchased the rental property directly through the IRA without taking a distribution. The IRA itself would own the property and loan, keeping everything tax-advantaged. All income and gains would flow back into the IRA tax-free (for a Roth). That's the major advantage - making alternative investments while keeping the tax benefits intact.

Yes, that's absolutely true and a critical point. The IRS has strict rules against "self-dealing" transactions. You cannot sell property you already own personally to your IRA - that's considered a prohibited transaction and can result in the entire IRA being disqualified. The same applies to transactions between your IRA and any "disqualified persons" which includes yourself, your spouse, parents, children, and certain business partners. So unfortunately, once you've purchased property personally, there's no way to transfer it into an IRA without triggering these prohibited transaction rules.

This is what I did! I logged into my H&R Block account from last year and found my original filing. The AGI was completely different from what I thought it was after the adjustment.

Good point about checking all possible tax software accounts! Sometimes people forget which service they used the previous year, so it's worth checking any tax preparation accounts you might have.

That $0 AGI workaround only works in specific situations - primarily for first-time filers or in years when the IRS specifically allows it. For most people who filed last year, using $0 will cause another rejection. The IRS has been inconsistent with this policy, so it's better to find your actual AGI if possible.

Thanks for the suggestion. How long does it typically take to get help from the Taxpayer Advocate Service? Do they have the same backlog as regular IRS services?

The Taxpayer Advocate Service does have some backlog, but generally they can get to you within 1-2 weeks which is much faster than waiting for regular IRS correspondence. They prioritize cases with imminent deadlines, so if you explain you're trying to file before the deadline, they often expedite. When you contact them, be very clear that you've attempted all normal channels for obtaining your IP PIN with no success. They can often issue temporary PINs or provide alternative filing guidance.

Yes! This happened to my cousin. She filed paper without her IP PIN (after identity theft) and it took 14 months to resolve the issues it created. They froze her refund and she had to go through a whole identity verification process in person.

Do you know if this applies to sales tax collection too? I'm in TX with a single-member LLC and I'm confused about whether the disregarded status affects my sales tax obligations.

Good question about sales tax. The disregarded entity status generally doesn't affect your sales tax obligations. In Texas, you still need to collect and remit sales tax based on your LLC's activities, regardless of how it's treated for income tax purposes. Your LLC is still recognized as the legal business entity that's making the sales, so the sales tax registration and collection responsibilities belong to the LLC. Texas doesn't really care that you're disregarded for federal income tax purposes - they just care that you collect the proper sales tax on taxable transactions.

It's actually a good thing! "Disregarded entity" sounds negative but it just means the IRS is ignoring your LLC as a separate tax entity. You report business income on your personal return with Schedule C (same as a sole proprietorship). Benefits: One tax return instead of two, possible loss deductions against other income, simpler paperwork. You still get the legal liability protection of an LLC - that doesn't change!