Thanks for this suggestion! I've heard about the S-Corp approach but wasn't sure if it was worth the extra paperwork. Do you use a payroll service to handle the salary part? And roughly how much does the additional tax filing complexity cost you each year?

I use Gusto for payroll which costs about $45/month plus $6/month per person (just me). It's super easy and handles all the tax filings and payments automatically. They even do the year-end W-2s and everything. For the additional tax filing complexity, my accountant charges about $900 to prepare both my personal return and the S-Corp return, which is about $400 more than when I was just a sole proprietor. But I'm saving approximately $12,000 in self-employment taxes annually, so it's definitely worth it. Plus the potential QBI benefits depending on your specific situation. Just make sure you talk to a good accountant before making the switch because there are some situations where it might not be advantageous.

This is good advice. I'd add that for someone making $320k, you might also look into a defined benefit plan in addition to a Solo 401k. They're more complex and require an actuary, but you can potentially sock away $100k+ per year pre-tax if you're over 40. Really helps with QBI qualification too.

Thank you so much! This breakdown is super helpful. Quick follow-up though - for the actual amount of withholding, should I be using what was initially withheld ($78k) or the net amount after they already got that partial refund through the T2062 process?

You should use the net amount after the partial refund. So if $78k was initially withheld but $22k was already refunded based on the T2062 adjustment, you'd report $56k on line 43700 as the withholding tax amount. The CRA system should already have a record of both the initial withholding and the T2062 adjustment, but I always recommend including a brief note with the return explaining these amounts to avoid any confusion during processing.

For non-residents, you don't need to file a separate provincial tax return. The federal T1-NR handles both federal and provincial taxation. Non-residents pay a flat 25% federal tax on taxable Canadian property, with no separate provincial component. Just make sure you're correctly identifying the property's location on the return since this affects CRA's internal processing, but you won't need to complete any provincial-specific forms for a non-resident property sale.

That's really practical advice, thank you! Do you happen to have a link to these donation value guides? And what level of detail do you go into for categories? Like do you just say "men's shirts" or do you break it down further into "men's t-shirts" vs "men's dress shirts"?

Salvation Army's valuation guide is here: https://satruck.org/Home/DonationValueGuide and Goodwill has one but it varies slightly by region. I definitely recommend breaking categories down to a reasonable level - not just "men's shirts" but "men's t-shirts" vs "men's dress shirts" vs "men's polos" since they have different values. Same with women's clothing, children's items, etc. For household goods, I separate by room (kitchen, bathroom, decor). The key is finding the balance between being thorough without making it impossibly detailed. Taking photos of sorted piles with your phone works great as backup documentation. I've been through two minor IRS inquiries about my donations over the years and this system held up both times.

This is why I barely claim any donations anymore. The documentation requirements are insane and it's not worth the risk. I donate tons of stuff but usually just claim a token amount like $500 for the year. Peace of mind is worth more than the tax savings to me.

Thanks so much for breaking down those method codes! That makes much more sense now. So if I understand correctly, my desk and MacBook were essentially "fully depreciated" for federal purposes in the first year because of the 100% bonus, but for California they're still on their regular depreciation schedules? When I enter these as existing assets in FreeTaxUSA, do I need to enter different prior depreciation amounts for federal vs state? Or does the software handle that difference automatically?

Yes, you've got it exactly right! For federal purposes, your desk and MacBook were fully depreciated in the first year thanks to 100% bonus depreciation available in 2022. But for California, they're following their normal depreciation schedules over 7 and 5 years respectively. FreeTaxUSA should handle the federal vs state difference automatically once you input the correct information. You'll want to enter the assets with their original acquisition dates, costs, and depreciation methods. For "prior depreciation," enter the cumulative federal depreciation taken to date (which would be the full amount for the desk and MacBook, and the partial amount for the iPhone). The software will then apply the correct state adjustments automatically. If you want to double-check the calculations, the state return should include a specific form showing the depreciation differences between federal and California.

This is super important! I messed up my taxes last year because I didn't realize the rates change throughout the depreciation period. Is there an easy calculator anywhere that shows what the percentage should be for each year?

Thank you for sharing your experience! I'm pretty sure I didn't take the advance after thinking about it more. So Monday is most likely then? That would be awesome if so!

Based on my experience with Venmo, Monday is most likely. They're pretty consistent with the 2-day early deposit for government payments. I've noticed they usually process them in the morning too, so you might even wake up to it on Monday. Just keep in mind that in very rare cases, the IRS might have delays on their end that can push things back, but with a confirmed DDD, you're usually good to go for that 2-day early timeline.

You can tell by looking at how you paid for your tax preparation. If you chose to have the fees taken out of your refund, that's usually a sign you took some kind of advance or refund transfer product. Also check your tax prep receipt - it should list if you took an advance.