Good point! In NY we have that stupid S-corp franchise tax that adds up. What's the California situation like?

In California, S-corporations pay a 1.5% tax on net income with a minimum tax of $800, while C-corporations pay a flat 8.84% tax rate. For larger businesses with significant profits, this difference can be substantial - though you need to factor in the additional personal income tax on passed-through S-corp profits. The analysis really depends on how much profit you're retaining in the business versus distributing to shareholders. In my experience, the math favors S-corps for businesses with high distribution rates but can swing toward C-corps when reinvesting heavily.

Our accountant mentioned this too! Also something about being able to establish a medical reimbursement plan as a C-corp that you cant do with an S? Not 100% on the details tho.

That's a great point about documentation - I hadn't considered how much more scrutiny a luxury vehicle might get. Do you think it matters if I use actual expenses vs. standard mileage rate when it comes to audit risk? And were there specific record-keeping issues the IRS focused on during your audit?

In my experience, using actual expenses (like you'd need to do for depreciation) definitely increased the scrutiny compared to standard mileage rate. The IRS agent specifically told me that luxury vehicles using actual expense method are flagged more frequently. During the audit, they focused heavily on three things: 1) Contemporaneous mileage logs (they wanted to see that I recorded trips when they happened, not recreated later), 2) Documentation of business purpose for each trip, and 3) Evidence that I had another vehicle for personal use. They were very skeptical of my claim that the Mercedes was 100% business when I didn't have another car in my name. My advice: keep a dedicated app or logbook in the car, document every single business trip with purpose and mileage, take periodic odometer photos, and keep all maintenance records showing the mileage progression. If you're claiming 100% business use, they'll want to see how you handle personal transportation.

Those limits seem low - is that for all vehicles or just luxury ones? I thought there were special rules for trucks and SUVs that let you deduct a lot more.

For donor-advised funds, is there a minimum amount that makes sense to start with? And do you recommend any particular providers?

Most major investment firms like Fidelity, Vanguard, and Schwab offer donor-advised funds with minimums around $5,000 to open and $500-1,000 for additional contributions. I personally use Fidelity Charitable because their platform is user-friendly and their fees are reasonable. The amount that "makes sense" depends on your tax situation, but generally, it's most beneficial when you're bunching multiple years of charitable contributions into a single tax year to exceed the standard deduction threshold. For someone at your income level, contributing $10,000+ would typically provide meaningful tax benefits, especially if you're already itemizing deductions.

I'm a physician who went the real estate route. The tax benefits are real - depreciation, mortgage interest, and expense deductions. But be cautious about passive losses - at your income level, you may not be able to deduct those against your W2 income unless you qualify as a real estate professional (which is tough with a full-time medical career). Consider syndications or REITs if you want the benefits without active management. Just do your due diligence - there are many questionable deals out there.

Thanks for the insight! I was worried about the time commitment. REITs sound more my speed since I barely have time for hobbies as it is. Any particular types of REITs you'd recommend looking into first?

I used TurboTax for 3 years of unfiled 1099 taxes last year. It worked ok but you have to buy each year separately which adds up fast. They don't make it super clear how to find the previous year versions either - you have to specifically search for "TurboTax 2019" etc. on their site. The business version is what you need for 1099s, which is their most expensive tier.

Thanks for the info! That's helpful to know about having to buy each year separately. Did you find the business version was worth it in terms of finding deductions for your 1099 income? I'm trying to decide if the higher cost is justified compared to cheaper options.

This is really scaring me. I did sign checks but my partner handled the accountant communications. I trusted him to manage that part while I focused on operations. Are you saying I could be on the hook for the entire amount?

Unfortunately, yes - having check signing authority is one of the major factors the IRS considers when determining who is a "responsible person" for payroll taxes. The IRS doesn't care about your internal agreements regarding who was supposed to handle what - they look at who had the ability to ensure the taxes were paid. That said, this doesn't mean all hope is lost. You should immediately gather documentation showing your partner's role in financial decisions. Emails, texts, meeting notes - anything showing he was primarily responsible for tax matters. While this won't necessarily eliminate your liability, it might help distribute the burden appropriately between partners.

This 100%. I spent months arguing with the IRS before getting a transcript that showed they had applied our Q4 payment to the wrong tax year. The notice amounts don't always tell the full story.