How do you track your mileage? Do you use an app or just write it down? I always forget to log my trips and then try to recreate it later which is probably not ideal for documentation.

I use the MileIQ app on my phone. It automatically tracks all my driving and then I just swipe left for personal trips and right for business trips at the end of each day. Takes seconds and creates an IRS-compliant log automatically. For those who prefer manual tracking, keep a small notebook in your car and jot down the odometer reading at the start and end of each trip, along with the date and purpose. The key is consistency - the IRS wants to see a complete log, not just estimates or recreated records.

I did one last year and yes, the timing rules are EXTREMELY strict. You have 45 days from selling your property to identify potential replacement properties in writing, and 180 days total to complete the purchase. NO EXCEPTIONS. Also, you MUST use a qualified intermediary to hold the funds - you can't touch the money yourself or it blows up the whole exchange. And the replacement property has to be of equal or greater value to defer all the gain. We almost messed up because we didn't realize you have to identify specific properties within that 45-day window.

Can you share more about how your multi-entity structure works? We're considering doing something similar but worried about the complexity and potential issues with IRS.

It's not a perfect solution, but we created a separate entity that holds our intellectual property and handles R&D activities. This allows us to better isolate the Section 174 expenses and manage the tax implications more effectively. The operational entity pays the R&D entity for development services. This approach does have significant complexity and costs in terms of legal structure, transfer pricing considerations, and ongoing compliance. You need good tax and legal advisors to set it up properly. The structure works better for established companies than very early startups due to the overhead involved.

Don't do it! We looked into this extensively. Moving overseas for Section 174 reasons actually backfires because foreign R&D must be amortized over 15 years instead of 5 years for domestic R&D. The cash flow impact is even worse.

I use TurboTax for my rental properties. When you get to the Schedule E section, there's a field specifically for insurance. What I do is calculate the prorated amount for the tax year (like others have suggested) and enter just that amount. Then I keep a separate spreadsheet tracking my prepaid expenses so I know what to enter next year. The software doesn't have a specific way to track prepaid expenses across tax years, so you have to do that part yourself. In your case, you'd enter $1,385 for 2022 (the $990 + $395 calculation).

9 Would employees still have the correct amounts withheld from their paychecks in this situation? Or would the withholding also be messed up?

22 Yes, the withholding in the paychecks would typically still be correct. The issue was just in how the W-2 forms were generated at the end of the year. The software calculated and withheld the proper amounts throughout the year, but had a bug when transferring that data to the actual W-2 form. In our case, employees had the right amounts withheld for Social Security and Medicare from each paycheck, but those totals didn't show up in boxes 3 and 5 on some W-2s. We had to issue corrected W-2c forms once we discovered the problem.

6 That sounds risky. Wouldn't you have to file an amended return if your employer sends a corrected W-2 later?

I'm a graphic designer, so I spend 8+ hours a day at the computer. My thoracic outlet syndrome definitely flares up from all the computer work - that's actually how I developed it. The massage therapy helps me continue working without severe pain. Do you think that would qualify as a business expense? That would be amazing if so!

Yes, that situation has a much stronger case for being a legitimate business expense! Since your condition is directly aggravated by your work activities (extended computer use for graphic design) and the massage therapy allows you to continue working, you can make a strong argument for it being "ordinary and necessary" for your business. Keep detailed records showing the connection between your work and the need for treatment. Have your doctor document that the massage therapy is specifically treating a condition caused or worsened by your work activities. This documentation is crucial if you're ever audited. Also track how the treatment directly enables you to continue your business activities. This approach could save you significantly more than the medical expense deduction route since it directly reduces your self-employment income and tax.

Yeah but you can only set up an HSA if you have a high-deductible health plan. Not everyone qualifies. And FSA is use-it-or-lose-it which is super risky if you're not sure exactly what medical expenses you'll have.