Totally valid point! Real IRS checks have watermarks and security features. The paper should have a slight blue tint and there's usually a watermark visible when held up to light. Also, if you're not expecting a check or the amount seems off, it's another red flag. Scammers count on people being excited about surprise money and not questioning it too carefully.

Is it even worth claiming home office then? I've heard it reduces your mortgage interest deduction and complicates selling your house later because of capital gains implications. Some of my friends say to avoid it completely.

I didn't make any special elections, so I guess it's the default (sole proprietorship)? Is that bad? Should I have chosen S-Corp instead?

For your first year with more expenses than income, the default sole proprietorship treatment is actually perfect! This allows your business losses to directly offset your W-2 income on your personal return. If you had elected S-Corp status, the rules for how losses flow through would be more complicated and potentially less beneficial in this startup phase. As your business becomes profitable, S-Corp status might make sense to save on self-employment taxes, but for now, you're in the ideal structure to maximize the tax benefit of your startup losses. You made the right choice by sticking with the default!

How often do you need to document shareholder meetings if you're the only owner? Is that even necessary for a single-member S Corp? Seems like excessive paperwork.

Yes, it's still necessary even as a single owner! I hold and document quarterly meetings with myself (sounds ridiculous, but it's important) and maintain a corporate minute book. My accountant advised doing this because maintaining the corporate veil is critical - if you're ever challenged, you need to show you're treating the business as a separate entity. The documentation doesn't need to be complex, but should demonstrate you're making business decisions as a corporation rather than as an individual. This includes formally approving major purchases, loans, salary changes, etc. Many single-owner S Corps get sloppy with this paperwork and it can create real problems during an audit.

This is actually a common misconception. S Corp shareholders who own more than 2% can still deduct health insurance premiums on their personal returns (Form 1040) as an adjustment to income, so it ends up being a wash tax-wise in most cases. You just can't deduct it directly on the S Corp return.

Good point about the life estate! My family got caught in that exact situation. Does anyone know if improvements made by the grandmother after transfer would count toward the basis? Like if she paid for a new roof in 2018?

If your grandmother truly gifted the entire property and your aunt is the legal owner, then any improvements made after the transfer would be added to your aunt's basis - but only if your aunt paid for them. If grandmother paid for the roof after no longer owning the house, that would generally be considered a gift of the improvement cost. However, if there was an informal arrangement where grandmother retained some ownership interest (like a life estate), the situation gets more complicated. This is actually why documenting who pays for what becomes really important in family property situations.

Not all quitclaim deeds are treated differently for basis purposes. The type of deed doesn't determine whether it's a gift or not - the consideration (payment) does. A quitclaim just means the grantor isn't guaranteeing they have good title to transfer, but it can still be either a gift or a sale depending on whether money changed hands.

How do you figure out how much you owe for the quarterly payments? I just started doing deliveries this year and am totally lost.

You need to estimate your annual income from deliveries, calculate the taxes you'll owe, and divide by four for each quarterly payment. The simplest approach is to set aside about 30% of your delivery earnings (15.3% for self-employment tax plus your income tax rate). You can use Form 1040-ES to calculate the exact amount, or many tax software programs have quarterly tax calculators. The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year.

That's right - this was all word of mouth with seniors in my community. No app involved, just me picking up groceries and prescriptions for cash payment. No 1099s or any official paperwork.