How many years can you show losses before the IRS considers your business a hobby though? I heard they get suspicious if you're always operating at a loss.

The IRS generally expects you to show a profit in at least 3 of the last 5 tax years to be considered a legitimate business rather than a hobby. If you consistently show losses year after year, that's when they might question whether you have a profit motive. However, for a new business like yours, it's completely normal to have losses or very small profits in the beginning years. They understand businesses take time to become profitable. Just make sure you're operating in a businesslike manner - keep good records, have a separate business bank account, and be working toward profitability.

I've used TurboTax Self-Employed for my small Etsy shop and it works fine, but honestly it's overkill if you just have a few transactions. You might be better off with FreeTaxUSA which is a lot cheaper and handles Schedule C just fine for simple situations.

I hadn't even considered this angle! My situation might actually fall into this gray area - I'm still expected to work set hours and use company equipment. Do you know what the specific tests are that the IRS uses? And if I pursue this, would I likely get fired or face other repercussions?

The IRS primarily looks at three categories: Behavioral Control (do they control how you work?), Financial Control (do they control the business aspects of your work?), and Relationship Type (written contracts, benefits, permanency of relationship). If they control when, where, and how you work, provide your equipment, don't let you work for others, pay you by time rather than project, and the relationship is ongoing rather than project-based, you're likely an employee regardless of what they call you. As for repercussions, legally they can't fire you for questioning your classification - that would be retaliation. But practically speaking, it could create tension. Some people start by having an informal conversation with HR or management before filing anything with the IRS. Documentation is key throughout this process.

Has anyone used Schwab for their solo 401(k)? Their regular investment accounts are great but wondering specifically about their solo 401(k) options compared to Fidelity.

I actually did research Schwab before settling on Fidelity. Their solo 401(k) is solid with no setup or maintenance fees similar to Fidelity. The main differences I found were that Schwab's plan doesn't allow for Roth contributions within the solo 401(k), while Fidelity does. Schwab also requires a bit more paperwork for the initial setup. Investment options are comparable between the two, with both offering good access to low-cost index funds. Schwab's customer service for small business retirement accounts was excellent in my experience during the research phase. If the Roth option isn't important to you, Schwab is definitely worth considering.

Do you have any recommendations for resources I could share? I'm worried about coming across as condescending since we already had that awkward conversation. I'd like to help without making him feel stupid.

The Consumer Financial Protection Bureau has free, straightforward resources that explain tax basics without being condescending. You could also look into whether your company's benefits include any financial wellness tools - many do these days, often through the same providers that handle 401(k) plans. A low-key approach might be sending resources to your whole team rather than singling him out. Something like "Found these helpful tax planning resources as we head toward year-end" could provide the information without embarrassment. The IRS also has surprisingly readable explainers on their website about withholding and how to adjust it.

This is actually me! I know it's not the financially optimal choice, but I deliberately overwithhold because I'm terrible at saving small amounts. Getting that big check once a year lets me make major purchases or pay down debt in meaningful chunks. It's like a forced savings account where I can't access the money until tax time.

Thanks for bringing this up! My situation is exactly like that - main GC but with subcontractors for electrical, windows, and HVAC. Should I be asking each sub directly for their documentation or should everything go through my general contractor?

Ideally everything should go through your general contractor - that's part of what you're paying them for. They should collect all the proper documentation from their subs and provide it to you in an organized way. Make sure to specify exactly what you need (itemized receipts, model numbers, Energy Star certifications). If your GC is resistant or doesn't seem to understand what you need, then you might need to speak directly with the subcontractors. But start by giving your GC a specific list of what documentation you need from each aspect of the project. Most good contractors have dealt with this before and should know what to provide.

What app or system do you use to organize all your digital tax documents? I've got a renovation coming up and want to be prepared.

This happened to my brother too! TurboTax apparently auto-submitted something even though he hadn't finished. The whole system is ridiculous. He ended up having to file an identity theft affidavit just to get his actual return processed.

Yeah, many tax software platforms have automatic submission features that aren't always clearly explained. Some will submit a partial return or an extension if you've entered basic info but haven't completed the process. It's always worth checking with any software you might have used. It's actually a lot more common than people realize. The IRS systems aren't great at distinguishing between a completed return and one that was just initiated with basic information. That's why filing that paper extension is so important - it gives you documentation and time to sort everything out.

Is there any way normal people can access that Practitioner line? Or do you need some kind of credentials?