Thanks for bringing this up! My tracking spreadsheet just has deposits and withdrawals with dates, but not broken down by actual playing sessions. If I play multiple times in one day, do I need to track each individual session or can I just track by day?

Each distinct playing session should be tracked separately, even if they occur on the same day. The IRS considers a session to end when you stop playing a particular game for a significant period. For online gambling, a good rule of thumb is that if you log out or stop playing for several hours, that ends a session. If you play blackjack for an hour, take a break for several hours, then play again, those would be two separate sessions. Some tax professionals recommend documenting the start and end times of each online gambling session to make this clear. The more detailed your records, the better position you'll be in if questions ever come up.

This is true! The IRS has reporting requirements for banks too. Any deposit over $10k gets automatically reported, and they also look for patterns of smaller deposits that might be trying to avoid that threshold. Plus with the new reporting for payment apps like Venmo and PayPal, there's a lot more visibility into money movement than people realize.

I've heard about cost segregation but wasn't sure if it applied to smaller commercial properties. Mine is only about 15,000 sq ft. Is there a minimum size where it makes financial sense? Also, does the fact that I'm getting it significantly below market value affect how cost segregation would work?

There's no specific minimum size where cost segregation makes sense - it's more about the potential tax savings versus the cost of the study. For a 15,000 sq ft property, it's definitely worth considering, especially if you're doing significant renovations. The below-market purchase price doesn't negatively impact cost segregation benefits. In fact, it might actually make the percentage benefit greater. Cost segregation works on your actual basis in the property (purchase price plus improvements), so while your basis might be lower than market value, the percentage of that basis that can be accelerated might be higher due to the renovation component. When you're putting significant renovation dollars in, those improvements often contain many items that qualify for 5-7 year depreciation.

I did something similar on my last building. Which specific energy credits did you claim? I used the 179D deduction but heard there were others that might stack.

What's the advantage of doing this instead of just adjusting your W-4 though? It seems like you're giving up interest you could be earning on that money by essentially giving yourself a tax bill.

The main advantage is simplicity, especially if your second income fluctuates. When my side gig earnings vary month to month, it's easier to just save a percentage than constantly update withholdings. You're right about potentially earning interest, but with a high-yield savings account, I'm still earning something on that money until tax time. The peace of mind of knowing I've got the tax bill covered is worth more to me than the small amount of extra interest I might get. Plus, I can adjust my "savings rate" if I think I'm putting too much aside.

Any chance you'd be willing to share a template of that spreadsheet? I'm terrible at creating those from scratch but that sounds super useful.

I like the dedicated credit card idea! Question though - how do you handle cash expenses? That's where I always mess up since there's no digital trail.

For cash expenses, I immediately take a photo of the receipt with my phone and add it to my digital system. I try to make this a habit right after making the purchase. If it's a business expense, I'll quickly note what it was for in my photo album so I don't forget the purpose later. I also keep a small zippered pouch in my car specifically for collecting any cash receipts I might get while out. Then once a week when I'm updating my spreadsheet, I go through that pouch, photograph anything I missed, and then file or discard the physical receipts. The key is having consistent touchpoints with your system rather than letting things pile up.

I tried that approach with H&R Block last year and found it limiting. Does TurboTax let you categorize receipts in detail? Like can you tag business expenses by project or client? My main issue is sorting through hundreds of business purchases at year end.

Thanks for the heads up! I did double-check the bank details, but I'll verify them one more time. And yes, there was a fee that was added to the total balance. I opted for the direct debit option to keep things simple for my grandparents - they won't have to remember to make the payment each month.

Sounds like you've got it covered then! The direct debit option is definitely the way to go - not only is the setup fee lower, but it also ensures they won't accidentally miss a payment. One last tip: if your grandparents ever need to change the bank account information for the direct debits, do it at least 7-10 business days before the next scheduled payment to make sure it processes correctly.

This is actually bad advice. You should select a payment option that indicates you're not paying with the return, but don't select "mail a check" if you're not going to mail one. There are specific options for "I'll pay directly to the IRS" or similar that are more appropriate and won't potentially flag your account for a missed check payment.