16 Do you have a link to this? I tried searching but came up with several different resources and I'm not sure which one you're referring to.

7 Sorry I should have included the link! It's called "Tax Procedure" by Morgan and is available through the University of Minnesota Scholarship Repository. Just Google "Morgan Tax Procedure Minnesota" and it should be the first result. The direct PDF is a bit hard to link, but that search should get you there. The most recent edition covers all the TCJA changes and has excellent citations if you want to dive deeper into specific sections of the tax code.

12 Bloomberg's materials are extremely comprehensive but probably not where you want to start if you're new to tax law. They're really designed for practicing tax attorneys and CPAs who already have a strong foundation. I'd recommend starting with something more accessible to build fundamentals, then using Bloomberg as a reference resource when you need deep dives into specific topics.

Wait, can you really deduct car repairs if you use your car for both personal and business? How does that work with the standard mileage deduction? I thought it was one or the other?

You're absolutely right about the standard mileage rate vs. actual expenses - it's one or the other. If you take the standard mileage rate (which is 67 cents per mile for 2024), that's meant to cover gas, insurance, repairs, depreciation, etc. If your car costs are really high, you can instead choose to deduct actual expenses, but you'll need to track everything and then deduct the business percentage. For most people, especially with older vehicles, the standard mileage rate is simpler and often more beneficial. Just make sure you're keeping a detailed mileage log either way!

This information is outdated. The IRS eliminated Form Schedule C-EZ after the 2019 tax year. All self-employed individuals now use the regular Schedule C, regardless of income amount or business complexity. The good news is that most tax software makes filling out Schedule C pretty straightforward, even for simple situations. Just answer the questions the software asks, and it will complete the form properly.

Thanks for the tip! I actually went back and checked my W-2 and you're right - the retirement plan box is checked but I definitely didn't select that in TurboTax. I didn't even notice that option when going through the questions. Do you remember where in TurboTax I need to go to fix this?

You should be able to find it by going back to the W-2 entry section in TurboTax. Look for a section that says something like "Does your employer offer a retirement plan?" or there might be a specific checkbox when entering your W-2 information. If you're not seeing it there, try looking in the "Deductions & Credits" section under retirement savings options. Sometimes TurboTax splits these questions into different sections which can cause these kinds of mismatches. Once you get the information entered correctly to match your W-2, the paper filing requirement might disappear.

This is a good point. I ran into this with New York one year because I'd moved mid-year and the address discrepancy triggered a paper filing requirement. Double check all your personal info matches what the IRS has on previous returns or communications.

Thanks for mentioning the SEP IRA option! Do you know what the contribution limits are compared to the Solo 401k? And is it true there's less paperwork involved? The Form 5500 requirement for Solo 401ks once you hit $250k sounds like a potential headache.

For a SEP IRA, you can contribute up to 25% of your net self-employment income with a maximum of $66,000 for 2023. With a Solo 401k, you can contribute $22,500 as an employee plus that same 25% of income as the employer contribution, still capped at $66,000 combined. The paperwork difference is significant. With a SEP, there's no annual filing requirement regardless of account size - just set it up once and make contributions. Solo 401ks require Form 5500-EZ filing once assets exceed $250,000, which isn't super complicated but is an extra annual task. For many small business owners, the simplicity of a SEP outweighs the potential for slightly higher contributions with a Solo 401k.

Did you have to start running payroll for yourself to contribute to the Solo 401k? That's the part that confuses me with my LLC.

Thank you for sharing your experience! That's really reassuring. Did you use any specific tax software to file your amended return or did you work with a professional? I'm trying to figure out the best way to handle this correctly.

I used TurboTax to prepare the amended return since that's what I'd used for my original filing. It walks you through the process pretty well. I just entered the additional income and it recalculated everything. For peace of mind, I did have a tax preparer review it before submitting just to make sure I did it right. It was worth the small fee to have a professional double-check my work. If your situation is fairly straightforward (just missing income), you can probably handle it yourself, but having someone review it isn't a bad idea.

This isn't great advice. While it's true the IRS prefers to collect rather than prosecute, deliberately not reporting income is tax evasion. Your cousin was lucky. The IRS can and does pursue criminal charges in some cases, especially when they can prove intent.