But how do they verify this? It seems like I could just put any date and they wouldn't know the difference?

They verify it through your income records. If you claim you started on January 1 but your first rideshare payment was in March, that would raise flags. The IRS can request records from Uber/Lyft showing when you first started driving. Attempting to claim earlier dates to maximize deductions is a common audit trigger. Always document everything - take screenshots of your first day on the app if possible. The potential tax savings aren't worth the risk of penalties and interest if you're caught providing incorrect information.

I used TurboTax Self-Employed last year and it does explain this pretty well. They have a specific section for rideshare drivers and they ask when you first started using your car for business. The help text clarifies it's not your purchase date but when you began business use.

Thank you so much for confirming this! It sounds like QOFs are very specific investments that I would definitely remember if I had bought into one. That makes me feel a lot better about checking "No" on my Schedule D. Do you think there's any reason the IRS might flag my return if I indicate I don't have QOF investments?

There's virtually no reason your return would be flagged for marking "No" on the QOF question if you don't have QOF investments. The IRS already knows who has these investments because the funds themselves must file Form 8996 to self-certify as QOFs, and they report their investors. These investments are relatively uncommon compared to standard retirement and brokerage accounts. The question is on Schedule D mainly to ensure people with actual QOF investments properly report them. For the vast majority of taxpayers, "No" is the correct answer and won't raise any red flags.

Do these QOFs actually perform well as investments? Or are people just using them for the tax benefits? Wondering if they're something worth looking into.

I don't think we ever made any special elections - we were always just a simple pass-through partnership. But that's a good thing to double-check. Is there a way to confirm what elections might be in effect for an EIN?

You can verify any tax elections by calling the IRS Business & Specialty Tax Line at 800-829-4933. When you get through, request your "entity control information" and they can tell you exactly how your LLC is classified and any elections that are in effect. For most simple LLCs that never filed anything special, you're probably fine. But if you or your accountant ever filed forms like 2553 (S-Corp election) or 8832 (entity classification election), you'll want to address those specifically. In my case, I had elected S-Corp status years earlier and forgot all about it!

Good point! Also check if you had any business credit cards, vendor accounts, or state tax accounts (like sales tax permits) that need to be closed separately. Those don't automatically close when you dissolve the LLC or close the EIN.

Do you know if this varies by state? I'm in Texas which doesn't have state income tax, but I'm curious if there's a comprehensive list somewhere of how different states handle this. I might move to Colorado next year.

Yes, it definitely varies by state. Texas has no state income tax as you mentioned, so you don't have to worry about it currently. For Colorado, they generally follow the federal treatment, but they do have some specific forms for retirement income. There's no single comprehensive list that I'm aware of, but most state tax department websites have sections on retirement account contributions. The safest approach when you move is to check Colorado's Department of Revenue website or call them directly. States like New York, California, and Massachusetts often have more distinctive rules that differ from federal treatment.

Good point! Also worth mentioning that employer matching contributions don't count toward the employee deferral limit of $20,500 (for 2022). Some people confuse the employee limit with the overall 415(c) limit which includes all contributions.

What about stuff I already bought last year? Can I still claim those expenses even if I don't have all the receipts anymore?

You can absolutely claim expenses from last year even without receipts, though having some documentation is always better. Bank or credit card statements showing the purchases can work as backup. The IRS doesn't require receipts for expenses under $75 (though it's still good practice to keep them). For bigger purchases like a computer or equipment, definitely try to find some proof of purchase. Remember you can only deduct the percentage used for business - so if your laptop is 60% for freelance work and 40% personal, you'd deduct 60% of the cost. Start keeping better records now for this year!

Yes! This is a common misunderstanding. You can file your own tax return AND still be claimed as a dependent on your parents' return if you meet the criteria (which includes them providing more than half your support). The key thing is that if you're claimed as a dependent, you can't claim your own personal exemption. But you still need to file your own return if you meet the income thresholds, which it sounds like you do.