No, I never got a 5498 showing my original contribution to the traditional IRA. Maybe that's part of the problem? I contributed $6,000 to the traditional IRA in January and converted it a few weeks later. Would TurboTax be confused because it doesn't see the original contribution form?

That's definitely the issue! The 5498 for traditional contributions typically comes really late (like May or June), long after tax filing season. So you need to manually enter your non-deductible contribution in TurboTax. Look for the section in TurboTax about "IRA Contributions" and make sure you've entered your $6,000 contribution as non-deductible to a traditional IRA. Then when you enter the conversion, TurboTax will understand that only the $103 above your contribution amount is taxable. Without that first step, TurboTax thinks the entire conversion amount is taxable!

I don't think I have any other IRA accounts... but now you've got me worried. How would I even check this? Is there a way to see all retirement accounts tied to my SSN?

You can check your credit report sometimes - it might show old accounts. Also check with previous employers to see if you had any 401ks that might have been auto-rolled to IRAs. The pro-rata rule is brutal and catches a ton of people doing backdoor Roths!

Thank you so much for this list! I've been deducting my equipment and software, but I completely forgot about tracking mileage to shoots. Do you know if there's a good app for tracking business miles? And can I retroactively claim mileage from earlier this year if I didn't track it at the time?

There are several good mileage tracking apps - MileIQ, Everlance, and Stride are popular ones. Most have free versions with limited trips and paid versions for more frequent drivers. For past mileage, you can create a log retroactively, but you'll need to provide reasonable documentation. Look through your calendar, emails, or invoices to find dates of shoots. Then use Google Maps to determine the mileage for each trip. Keep this log with addresses, dates, purpose of trips, and miles driven. It's not ideal, but it's better than losing the deduction entirely. Going forward, I'd strongly recommend using an automatic tracking app.

This is so important! I had to renegotiate my lease when my landlord found out. Also worth checking your city's zoning laws - some municipalities have restrictions on home-based businesses, especially if clients come to your location.

You can actually file a 1040-X (amended return) for free directly on the IRS website now through their Free File Fillable Forms if you want to avoid the FreeTaxUSA fee. It's a bit more work since you need to know what you're doing, but definitely possible.

Thank you for explaining this! Does this mean when I file taxes I need to report that full $47,500 cost basis amount on my forms? Or just the actual profits I've made when I've sold back to USD?

You need to report all transactions where you disposed of cryptocurrency - either by selling it for USD or trading it for another crypto. For each transaction, you'll report both the proceeds (what you received) and the cost basis (what you paid for it originally). If you use tax software or Form 8949, you'll list each transaction separately. So yes, the total cost basis across all your transactions might add up to that $47,500 figure, but your taxable gains will only be the difference between your total proceeds and total cost basis. If you've only made $650 in actual profit, that's all you'll pay taxes on - not the full cost basis amount. This is why good record-keeping is essential with crypto.

I used CoinTracker last year and it was ok but missed some DeFi transactions. Had to manually input a bunch of stuff. Haven't tried Koinly though.

I've used both. Koinly was better for me because it handled my NFT transactions properly. CoinTracker kept treating my NFT trades as regular crypto and messed up the cost basis calculations. But it depends on what kind of crypto activity you have.

Thanks for sharing your experience! I hadn't even considered the QBI deduction. Do you remember how complicated the process was to switch from S to C? And now you're switching back? Did you use a specific service or accountant to help with the transition?

The conversion process itself wasn't too difficult - it's basically filing Form 8832 to elect C-corp status. The real complications came afterward with the new tax reporting requirements and accounting changes. I worked with my accountant who specializes in small business taxation. If you're considering a change, I'd definitely recommend working with a specialist rather than doing it yourself. There are timing considerations and potential tax implications that aren't obvious. For example, after you revoke S-corp status, you generally can't re-elect it for 5 years without IRS permission, which is why I'm having to go through a more complex process to switch back.

I did this calculation recently for a similar situation. Here's a simplified breakdown: S-corp: 60k business income passes through. Assuming a reasonable salary of 35k (subject to payroll taxes) and 25k as distribution (no SE tax). The 60k is taxed at personal rates, but with QBI deduction on qualified income. Approx total tax: $12-14k depending on deductions. C-corp: Corporation pays 21% on 60k = $12.6k. Then any money taken out as dividends gets taxed again at 15% (assuming qualified dividends). So if you took all remaining $47.4k as dividends, that's another $7.1k in tax. Total: $19.7k. This is simplified and excludes other factors, but illustrates why S-corps often work better for smaller businesses where owners need to take most profits out.