Thanks for the heads-up about documentation. What kind of log did you keep? Like a daily journal of work hours or something more detailed? I'm worried now because I haven't been tracking anything except the square footage percentage.

Nothing super formal for the log - just a simple spreadsheet where I tracked dates and hours when I used the office for business purposes. I also kept my business calendar that showed client meetings (virtual ones held in my office). The auditor seemed most interested in proving the space was used exclusively for business, not occasionally as a guest room or for other purposes. The square footage calculation is important, but having dated photos of your dedicated office setup throughout the year can help too. The auditor told me many people claim home offices that are really just the kitchen table or a corner of the living room, which doesn't qualify as "exclusive" use.

This is the clearest explanation I've seen! Question: does internet service count as direct or indirect if I use it throughout the house but need it for business?

Oh crap, I didn't even think about state requirements! I'm in California - does anyone know if I need to file something separate for my LLC at the state level?

California requires an automatic 6-month extension for filing your state personal income tax return, so you don't need to file a separate extension form for that. However, you still need to pay any estimated tax you owe by the original due date. For your LLC specifically, California requires an annual LLC tax of $800, which is due by the 15th day of the 4th month of your taxable year (April 15 for calendar-year taxpayers). This payment isn't extended by your personal extension, so make sure you've paid that already if it applies to you.

I've been using QuickBooks Self-Employed for my single-member LLC and it's been great for tracking everything. It even has a tax estimation feature that helps you set aside the right amount each quarter.

7 I tried using that estimator but got confused halfway through. It asked for projected deductions and I had no idea what to put. Do you just guess? Or is there a way to figure out what deductions they'll have for this year?

11 For the deductions section, you can use last year's deductions as a starting point if your situation hasn't changed much. If your parents take the standard deduction (which most people do now with the higher amounts), you can just select that option without itemizing. If they do itemize, have them look at Schedule A from last year's return and use those figures as estimates, adjusting for any known changes (like if they paid off their mortgage or expect higher medical expenses this year).

16 Wait, so even if they pay everything they owe by the tax deadline, they can still get penalties if they didn't pay enough during the year?? That seems really unfair!

Good idea about checking emails! I just did a search through my inbox for "tax return" and "1040" and found an email from April 2022 that has my 2021 return attached, but nothing for 2022 or 2023. I'm going to try reaching out to coworkers who might know what software our tax preparer used.

Glad that helped with at least one year! Another thing to try is looking at your bank statements from when you paid to have your taxes done. The charge might list the name of the tax software, not just the preparer's business name. Also, if you received tax refunds for those years, check your bank deposits around tax time - the deposit details sometimes include information about which service processed your return.

This happened to me too! Found our returns in my husband's email (he had forwarded them to himself from his accountant and then completely forgot). Always check with your spouse first before going through the hassle of IRS requests.

My wife and I have been searching everywhere! We looked through all our devices, cloud storage, and email accounts. I even found some older tax documents from 2020, but nothing for 2022 or 2023. I'm starting to think our tax preparer never actually gave us copies, which is frustrating. I've called our mortgage lender, and they confirmed they need the actual 1040 forms, not just transcripts. They need to verify some specific deductions that apparently don't show up on the transcript. Going to try the IRS Form 4506 route and see if I can get expedited processing.

This is super helpful info! Do you know if I should include any specific form or attachment to this year's return to document the correction? Or just keep records in my personal files?

You don't need to file a specific form for small corrections if you're not doing the formal Form 3115 method change. However, tax professionals generally recommend attaching a simple statement to your return that explains the correction. Keep more detailed records in your personal files showing calculations of the correct basis, the amount of excess depreciation previously taken, and how you're adjusting going forward. If you use tax software, there's usually a way to include a PDF attachment or statement with your e-filed return. This creates a record within the IRS system that you've disclosed the adjustment, which helps demonstrate good faith compliance.

Yes, it does matter what type of asset you're correcting. Building depreciation errors generally have more significant long-term impacts because residential buildings are depreciated over 27.5 years, while appliances and furniture are typically 5-7 year properties. For shorter-lived assets like appliances, a basis correction is less critical since you'll fully depreciate them sooner anyway. With buildings, the correction affects many more tax years. Also, the IRS tends to scrutinize building depreciation more closely during audits because the dollar amounts are typically larger and extend over decades.

Thanks for explaining that difference! Makes sense that they'd care more about the building since it's spread over so many years. My issue is with some kitchen appliances I replaced, so sounds like it's less of a big deal.