What about the LLC protection itself? Does it actually do anything for you besides potential tax benefits? Like protecting personal assets if a trade somehow went catastrophically wrong?

The LLC provides some asset protection, but it's limited for trading activities. It mainly protects against business creditors, but since brokerages require personal guarantees, the protection for trading losses is minimal. The main benefit was being able to establish a separate business entity for tax purposes. For catastrophic trading scenarios, the LLC wouldn't protect me from losses on trades I authorized. Where it does help is separating my trading assets from personal assets for general liability purposes. I still maintain separate accounts, separate records, and never commingle personal and business funds, which strengthens both the liability protection and the tax treatment as a business.

Does making the mark-to-market election mean ALL your investments have to be treated that way? I have some long-term holdings I definitely don't want treated as ordinary income when I eventually sell.

Thank you for this info! I definitely don't fall into any of those categories. I'm just a regular employee at a marketing company. This confirms the form shouldn't be there. I'll call my tax preparer tomorrow to get this fixed.

You're welcome! When you call your preparer, just be very clear that you understand Form 2106 is only for those specific categories of workers after the TCJA changes in 2017. Sometimes preparers are using outdated knowledge or software templates. Also, make sure they know they need to file a Form 1040-X (Amended Return) to correct this issue - not just "remove it from their system" since the return has already been submitted. Good luck!

This is actually really good advice. Superseding returns are less well-known but can be much simpler than amendments in many cases. You just need to file before the due date (including extensions).

Thank you for mentioning this! I was wondering about the documentation part. Do you recommend keeping these records for the standard 3 years like regular tax returns?

I actually recommend keeping extension documentation for at least 6 years, even though the standard recommendation for most tax records is 3 years. The reason is that extension issues can sometimes take longer to surface. Plus, these documents don't take up much space digitally. I create a tax folder for each year with subfolders for "Extension" and "Final Return" and keep all confirmation numbers, screenshots, and payment records organized there. It's saved me more than once when questions came up years later.

I switched from TurboTax to FreeTaxUSA two years ago and haven't looked back. They handle K-1s just fine in my experience (I get one from an S-Corp). Their interface for recording extension payments is actually more straightforward than TurboTax too - it's right in the "Payments" section and clearly labeled. Federal filing is free and state is only around $15. For extensions, they guide you through the same Form 4868 process.

What counts as a "legitimate reason" for not filing? Would extreme financial hardship qualify? I lost my job in 2023 and just couldn't deal with knowing I'd owe taxes I couldn't pay.

The IRS considers things like serious illness, death in the immediate family, natural disasters, or unavoidable absence (like military deployment). Unfortunately, financial hardship alone typically doesn't qualify as reasonable cause for not filing, though it can help with payment arrangements. If you've had a good filing history before this (filed and paid on time for the past 3 years), you might still qualify for First Time Penalty Abatement regardless of your reason. It's worth asking about when you contact them.

You need to get the right version of the software for each specific tax year. So for 2023 you'd need the 2023 version, not the current 2025 one. Most tax software companies sell previous year versions, but sometimes they cost more than the current year.

I tried using TurboTax for back taxes and it was kind of a hassle. You have to buy each year separately and they charge more for previous years. I ended up using FreeTaxUSA instead which was way cheaper for multiple years of back taxes.

This is really helpful, thanks! Is there any way to check for the "approved" status, or do they only tell you once the refund is actually sent? The IRS tracker just shows "accepted" with no further details.

The "Where's My Refund" tool on the IRS website or app will update to show "approved" status once they reach that stage. It will then give you an actual refund date. Some people never see the "approved" status and just go straight to "refund sent" if the processing happens quickly. If you filed electronically with direct deposit and have a simple return, you might see your refund in your account before the tracker even updates. The tool sometimes lags behind the actual processing by a day or two. But if you're at 21+ days since acceptance with no update, that's when you might want to call and check if there's an issue.

Credit Karma (now Cash App Taxes) is reliable. I've used them for 3 years with no issues. Processing time has nothing to do with which software you used - it depends on your return complexity and IRS workload. Check the IRS "Where's My Refund" tool or IRS2Go app for the most current status. If it's only been 3 days since acceptance, just give it time. Most refunds come within 21 days.