That's super helpful, thanks! Our platform charges a 2.5% fee for each transaction, so that could add up over the year. Do we need to keep any special documentation to prove those fees if we get audited?

Yes, definitely keep documentation! Save monthly statements from your payment platform that show both the gross rent collected and the fees deducted. Many platforms provide year-end summaries that break down these amounts clearly. I also recommend creating a simple spreadsheet tracking each payment, the fee charged, and the net amount received. Having this detailed record will make tax preparation much easier and provide solid documentation if the IRS ever questions the discrepancy between your 1099-K amount and what you reported on Schedule E.

Can you explain more about this allocation? We're in a similar situation with a duplex and I've been guessing at percentages.

Do you know if there's any way to track it after it shows the amount but before it shows funded? That in-between waiting is killing me!

Unfortunately there's not really a way to track it during that in-between phase. TPG doesn't give updates until they actually receive the money from the IRS. The IRS "Where's My Refund" tool might show it as sent even while TPG still shows it as pending. The only way to get more detailed information during that waiting period would be to access your IRS transcript online or call the IRS directly. The transcript will show the exact date the IRS scheduled your refund to be sent, which is typically about 1-2 days before TPG receives it.

This literally just happened to me! It showed my amount for 4 days, went back to unknown, then funded the next day. Nearly had a heart attack thinking my refund disappeared 😭

Thanks for this advice! I do have the original invoice somewhere in my files. When you removed the laptop from your fixed asset schedule, did you need to fill out any specific form beyond the Form 4797 that others mentioned?

No additional IRS forms are needed beyond Form 4797 for reporting the sale. The fixed asset schedule update is just for your own business bookkeeping - it's an internal document that tracks all your business assets, their purchase dates, depreciation method, and current status. You'll want to mark the laptop as "disposed" with the date and sale amount in your accounting system. If you use QuickBooks or similar software, there should be an asset disposal function that handles this automatically and creates the proper journal entries. This keeps your business balance sheet accurate and prevents confusion if you're ever audited.

For a 100% bonus-depreciated business asset like your laptop, you'll report it on Form 4797, Part III (Gain From Disposition of Property Under Sections 1245, 1250, etc.). This is because the gain from selling depreciable business equipment is considered "Section 1245 property" gain by the IRS. The entire $850 would be reported in this section as ordinary income, not as a capital gain, because it represents recaptured depreciation. If you're using tax software, it should guide you through this process once you indicate you're selling business equipment that was previously depreciated.

Good point. I once had an employer who withheld federal but completely missed setting up state withholding. Ended up owing $2,300 to my state at tax time. It was a nightmare.

Thanks for bringing up the research resources! Which one would you recommend for someone just starting out? I'm trying to be careful with startup costs but also don't want to skimp on essential tools. Also could you elaborate on the preparer vs advisor distinction? I thought the EA would cover both, but sounds like there's more to consider.

For someone just starting out, I'd recommend Thomson Reuters Checkpoint Edge. It's more affordable than some others and has a user-friendly interface that's easier for beginners. They also offer a somewhat limited version called Checkpoint Basic that might be sufficient for your first year or two. Regarding preparer vs advisor: While the EA credential qualifies you for both roles legally, they're functionally different. As a preparer, you're documenting what has already happened - reporting prior year transactions correctly. As an advisor, you're guiding future decisions and strategies. The latter carries more risk because you're making recommendations that impact future outcomes. Many new EAs get into trouble by casually giving planning advice without proper documentation or engagement letters. Start by mastering preparation, then gradually move into advisory services as you gain experience. When you do start offering advisory services, make sure you have separate engagement letters and appropriate insurance coverage.

What kind of prices should someone expect to pay for these insurance policies? I'm considering the same career path and trying to budget startup costs.