What about if I drive a lot but also had a major repair? I did about 20,000 business miles last year but also had to replace my engine for $7,000. Which method would be better for me?

For 20,000 business miles at the standard rate, you'd get about $13,400 in deductions (20,000 × $0.67). To determine if actual expenses are better, you need to add up everything: the $7,000 engine replacement plus all your gas, insurance, maintenance, repairs, and depreciation for the year. If your total actual expenses exceed $13,400, then the actual expense method would give you a better deduction. But remember, if you choose actual expenses in the first year you use the vehicle for business, you're generally stuck with that method for the life of the vehicle.

OMG when you put it that way ($32 per mile) it makes the error even more obvious! I went back and checked everything and found the problem. When entering my mileage, I also had "actual expenses" checked in a different section. Once I unchecked that and just used standard mileage, the number went from $128,439 down to $2,680. Huge difference! My refund is smaller now but at least I won't be getting audited for claiming I spent more on my van than it's actually worth 😅 Thanks everyone for the help!

That's really smart! Do you have any specific tips on how to document all those different responsibilities? Like do you keep a time log or something?

Oh that's a good point about the calendar year requirement. My business tends to be seasonal with a lot of income at the end of the year, so that might actually work out well for planning purposes. Do you happen to know if I'd need to start taking a salary immediately after forming the S-Corp? Or could I wait until I've built up some reserves in the business account first?

You should start taking a reasonable salary as soon as the S-Corp election is effective. The IRS looks suspiciously at S-Corps that distribute profits without paying any salary, as that appears to be avoiding payroll taxes. That said, you don't necessarily need to take a salary with every single payment that comes in. Many S-Corp owners set up quarterly or monthly payroll for themselves, allowing some cash to accumulate in the business account before processing payroll. Just make sure that by the end of the tax year, you've paid yourself a reasonable salary relative to the profit the business generated. Your payroll schedule should be consistent and documented as part of your business practices.

That's actually a really good point. I did pay with my credit card, so I could probably dispute the charge. Do you know what kind of documentation I'd need to provide to the credit card company? Would screenshots of my unanswered emails be enough?

Screenshots of emails, chat transcripts, and dates/times of attempted communications would be perfect documentation. Most credit card companies have a fairly straightforward dispute process - you'll typically need to fill out a form explaining that you paid for services that weren't delivered despite multiple attempts to resolve the issue. The key is demonstrating that you made reasonable efforts to work with the merchant first. Include specific details like "Sent emails on March 5, 12, and 19 with no response" and "Initiated customer service chat on March 25 which was terminated by representative without resolution." Credit card companies generally side with customers in cases where services weren't provided, especially when you have documentation showing the company was unresponsive.

That's actually genius. Do you remember which manager you contacted? I'm having similar issues with them right now.

This is a great suggestion I hadn't thought of! Do you know if these local print shops usually carry the forms year-round or just during tax season? I'd like to get prepared earlier next year.

Most print shops that specialize in business services carry them year-round, though their stock might be limited outside of tax season. I've purchased them as late as October and as early as November for the following year. If you want to be prepared early, I'd suggest calling local print shops around October/November when they typically get their new tax year forms in stock. Many will even hold a small quantity for you if you call ahead. Just be sure to specify you need Quickbooks-compatible W2 forms when asking, as there are different formats.

Does that service also handle the filing with SSA and state agencies, or do you still have to do that manually? I've been looking at online options but wasn't sure if they're comprehensive.

That's an important point I hadn't considered. I'm not their representative payee (their mom is, though she doesn't live with us), but I do provide housing, food, clothes, etc. If I receive tax benefits from claiming them, should I be documenting how I spend that money specifically on them?

Since you're not the representative payee, you have more flexibility in how you use tax benefits you receive from claiming the children. The money from tax credits like the Child Tax Credit is yours to use as you see fit - the IRS doesn't impose restrictions on how you spend it. However, it's still a good practice to document how you support the children generally, especially if there's ever a question about whether they qualify as your dependents. Keep receipts for major expenses you cover for them, document that they live with you full-time, and maintain records of any financial support you provide. This creates a clear paper trail that shows you meet the requirements to claim them.

Do you need the biological parent to sign anything formally stating they're not claiming the children? I've heard conflicting things about Form 8332 being required in these situations.