How's the reporting feature? I need to be able to generate reports for specific time periods or clients.

The reporting is actually one of its strongest features. You can generate reports by client, project, time period, expense category - pretty much any way you want to slice the data. I run quarterly P&L reports for my own tax planning, but also generate client-specific expense reports when I need to justify certain pass-through costs. They've also added a dashboard feature that gives you a real-time view of outstanding invoices, expenses by category, and profitability by client. I check it weekly to make sure I'm staying on track with my financial goals.

I used Everlance for about 6 months. It's decent for mileage tracking but pretty basic for everything else. The automatic trip detection was hit or miss for me - sometimes it would record random trips when I was just sitting at my desk! The receipt scanning is okay but not great for complex receipts. If your needs are simple and mainly mileage-focused it might work, but I switched to something more comprehensive.

Thanks for the insight! Sounds like it might not be robust enough for what I need. I've got a lot of different expense types beyond just mileage.

I had the same issue with Fidelity. Their explanation is technically correct - the distributing plan doesn't always have visibility into your tax basis. But it's super unhelpful. I ended up using the full amount as taxable on my return (Form 8606 helped sort it out) and didn't have any issues. If you're using tax software, just override the default and enter the full amount as taxable.

Does anyone know how to attach an explanation to an e-filed return? Is there a specific form for this or is it just an attachment you add?

Most tax software has an option to include a statement or explanation with your e-filed return. In TurboTax, look for something like "Miscellaneous Forms" or "Statements" in the forms search. In H&R Block software, it's under "Miscellaneous Forms" as well. If you can't find it, you can also use Form 8275 "Disclosure Statement" for more complex situations, though that might be overkill for this issue. The key is making sure you properly report the correct taxable amount and documenting your good-faith effort to comply with tax laws despite receiving incorrect forms.

15 Wait, so I might need to amend my 2022 return? I already filed it last year and reported the contribution to my Traditional IRA, but the conversion didn't happen until 2023. Do I really need to go back and change something from last year's filing?

7 No, you likely don't need to amend your 2022 return. If you correctly reported the 2022 Traditional IRA contribution on your 2022 return (on Form 8606 showing it as non-deductible), then you're fine for that year. The conversion that occurred in 2023 (even of 2022 contributions) gets reported on your 2023 return. The key is making sure your 2022 Form 8606 established your basis correctly, and then your 2023 Form 8606 shows the conversion. TurboTax should handle this if you input everything correctly in the IRA/retirement sections.

22 I tried using that feature but got confused when it asked about recharacterizations vs conversions. It seemed to treat them as completely different things, but in my mind they're related. Did you find it actually worked correctly for your situation?

This is so helpful! So basically if I have a single-member LLC, the IRS treats me exactly the same as if I just had a sole proprietorship? What's the advantage of multi-member then? My wife and I are thinking of starting a business together.

That's right - for tax purposes, a single-member LLC is treated exactly like a sole proprietorship. You file Schedule C with your personal return, and the LLC is completely "invisible" to the IRS. For you and your wife, it depends on your state. In community property states, a husband and wife can elect to treat their LLC as a disregarded entity (essentially a sole proprietorship) instead of a partnership, which simplifies filing. In non-community property states, a husband-wife LLC typically files as a partnership, which means a separate tax return (Form 1065) and Schedule K-1s. The partnership route involves more paperwork but can sometimes offer more flexibility in how income and expenses are allocated between owners.

You actually don't need an LLC to deduct legitimate business expenses. You can deduct the business portion of your computer, internet, home office space, and business travel on Schedule C as a sole proprietor. The LLC won't change what you can deduct - you just need to make sure they're ordinary and necessary expenses for your business.

Thanks for mentioning the first-time penalty abatement - I had no idea that was even a thing! Is that something I'd need to specifically request or would they automatically check if I'm eligible?

You definitely need to specifically request first-time penalty abatement - they won't offer it automatically. When you call to set up your payment plan or after you receive your first notice with penalties, you can request it then. The magic words are "I'd like to request first-time penalty abatement under the IRS First-Time Abatement administrative waiver." You'll need to have a clean compliance history for the past 3 years (filed all required returns and had no significant penalties) to qualify. It can save you a good chunk of money since it typically waives the failure-to-pay penalty, which adds up over time. It doesn't waive interest though, just the penalties.

The IRS doesn't typically send confirmation emails when they process returns. If you filed through tax software, the software company usually sends a confirmation when the IRS accepts the return, but that's different from it being fully processed. You'll need to check "Where's My Refund" on the IRS website or your account in the online portal to see the status once their systems update.

Thanks for the info! I did get the acceptance email from my tax software but wasn't sure if that meant it was fully processed or just received. I'll keep checking the online portal.