I use a fillable PDF that they can complete digitally. It's set up so they can't submit it if required questions are unanswered. I also color-code sections based on complexity - green for simple questions, yellow for ones that might need thought, and red for complex items we'll definitely discuss during our meeting. The pre-filled approach for returning clients has been the biggest time-saver. I just send last year's completed form and say "please review and note any changes for this year" - gets much better response rates than starting from scratch each time.

Do you have them complete it digitally or on paper?

We've incorporated key Schedule B items into our engagement letters for partnerships. We specifically include language about foreign activities, ownership, and listed transactions. It doesn't replace getting the specific answers, but it does create another layer of documentation and client awareness.

This is really scaring me. I did sign checks but my partner handled the accountant communications. I trusted him to manage that part while I focused on operations. Are you saying I could be on the hook for the entire amount?

Unfortunately, yes - having check signing authority is one of the major factors the IRS considers when determining who is a "responsible person" for payroll taxes. The IRS doesn't care about your internal agreements regarding who was supposed to handle what - they look at who had the ability to ensure the taxes were paid. That said, this doesn't mean all hope is lost. You should immediately gather documentation showing your partner's role in financial decisions. Emails, texts, meeting notes - anything showing he was primarily responsible for tax matters. While this won't necessarily eliminate your liability, it might help distribute the burden appropriately between partners.

This 100%. I spent months arguing with the IRS before getting a transcript that showed they had applied our Q4 payment to the wrong tax year. The notice amounts don't always tell the full story.

Do these CTR reports trigger IRS audits? I'm getting a large gift from my parents in Canada next month and now I'm worried this will flag me for extra scrutiny.

CTRs themselves don't automatically trigger audits. They're filed with FinCEN (Financial Crimes Enforcement Network), not directly with the IRS. These reports are mainly used to detect patterns of money laundering or other financial crimes. The IRS may have access to this information, but receiving a legitimate gift that's properly documented is not going to raise red flags. Just make sure you have documentation showing the source of the funds and the gift intent. If the amount is under $100,000 from an individual in a single year, you don't even have a reporting requirement as the recipient.

Yes! I use Wise all the time for family in Germany. The exchange rates are WAY better than bank-to-bank transfers and the fees are transparent. For a $25k transfer, you'd probably save hundreds compared to traditional bank wires.

Thanks for confirming! I'll definitely look into that. Did you run into any issues with Wise transfers being treated differently for tax/reporting purposes than traditional bank wires?

That's a really good point I hadn't considered at all. So would it be better to have two separate LLCs in that case? Would that substantially increase my paperwork/costs?

Yes, from a liability protection standpoint, two separate LLCs would offer better protection. If something happens in your courier business, the game development assets would be sheltered in the separate LLC. It does increase some paperwork and costs. You'd pay two state filing fees (usually $50-$150 per LLC depending on your state), potentially two annual report fees, and would need to maintain separate books, bank accounts, and records for each entity. If you're a single-member LLC filing as a pass-through entity, the tax filing isn't substantially more complicated - you'd just have two Schedule Cs instead of one. A middle ground some people choose is starting with one LLC, then separating into two once the second business (game development) actually starts generating some revenue or when the assets become valuable enough to justify the extra protection.

That's such a smart approach! How complicated was it to set up the DBAs? And did you need separate bank accounts for each one?

Thanks for sharing your experience! Do you think it's necessary to actually list every single item individually in my records, or would it be acceptable to just categorize them? Like "March freebie batch - $0" rather than "blue lamp - $0, red vase - $0" etc.

Categorizing is usually fine for low-value items. I personally do batch entries like "Weekend Estate Cleanout Items - $0" with a rough count of items. For anything worth over $50 when sold, I track those individually. The key is having enough detail that you could explain your inventory system if questioned. The IRS is mostly concerned that you're not hiding sales or falsely inflating expenses, not that you have a museum-level catalog of every pencil and paperclip you've picked up for free.

That's not correct. If you're selling products (as opposed to just services), you need to check "Yes" to the inventory question on Schedule C, which then requires you to complete the COGS section. The fact that you acquired inventory for free doesn't change this requirement - those items still count as inventory with a zero cost basis. Trying to avoid the COGS section by incorrectly answering the inventory question would be misrepresenting your business operations and could create problems. The proper approach is to complete the COGS section accurately, even if many of your entries show zero cost.