That's really good advice. I think I have most of my contribution records in old emails, but should I also request official documentation from my financial institution to be safe?

Absolutely get official documentation if you can. Year-end statements are great because they often summarize annual contributions. Some institutions also provide specific tax forms or contribution confirmations. If they offer any kind of contribution history report, definitely request that. Email confirmations are good supplementary evidence, but official statements directly from the institution carry more weight if there's ever a question. The more documentation you have, the better, especially for older contributions that might be harder to verify years later.

I tried that with Vanguard last year and they refused to change the code. They said their policy is to use code 1 for all early distributions and it's up to the taxpayer to claim any exceptions on their tax return. Super annoying but apparently common practice.

How detailed do you get with tracking? Do you need to show specific clients that came from specific ads? I'm not very organized with this stuff.

You don't need to get super granular with connecting specific clients to specific ad campaigns, but having general data is helpful. I use Facebook's conversion tracking pixel on my website and then keep a simple spreadsheet that shows monthly ad spend, number of leads generated, and clients that resulted. The key is showing that your marketing expenses have a legitimate business purpose and aren't personal. Even basic tracking is better than nothing. When I started, I just asked new clients "how did you find me?" and kept notes. Now I use more sophisticated tools, but both approaches work for establishing the business connection.

The receipts are most important, but I also take screenshots of my active campaigns and save them in a folder. My accountant said receipts prove the expense, but screenshots of the ads help prove they were for business if questioned.

I hadn't even thought about state taxes or the LLC angle. Do you know if forming an LLC changes how depreciation works? And would I need to file a separate business tax return if I create an LLC?

A single-member LLC is typically treated as a "disregarded entity" for tax purposes, so you'd still report everything on your personal return using Schedule E. The depreciation works the same way regardless of whether you have an LLC or not. You generally don't need to file a separate business return for a single-member LLC used for rental property. However, if you elect to have your LLC taxed as an S-corp (which some people do to potentially save on self-employment taxes), then you would file a separate return. But for most small landlords with one property, keeping it simple with a disregarded LLC is usually the way to go.

I used TurboTax Premier last year for my rental and it worked fine. It walks you through all the Schedule E stuff and helps calculate depreciation. Just make sure you keep really good records of your expenses throughout the year. The one time I got confused, I used their live help feature and the tax expert cleared things up quickly.

That's really good advice! Would you recommend asking them any specific questions to gauge their knowledge about medical deductions? I wouldn't even know how to tell if they're giving me good answers since I don't know much about this stuff myself.

Ask them specifically about the 7.5% AGI threshold for medical expenses and how they would help determine if you should itemize. A knowledgeable preparer will explain that medical expenses are only deductible for the amount exceeding 7.5% of your adjusted gross income, and they'll want to know if you have other potential deductions that could make itemizing worthwhile. You could also ask what types of medical expenses are deductible that people commonly miss. They should mention things like mileage to medical appointments, lodging while receiving medical care away from home, home modifications for medical purposes, or certain insurance premiums. If they only mention obvious things like doctor bills, they might not have specialized knowledge.

Thats true, my local HR Block has an enrolled agent who specializes in medical deductions. Shes way better than the seasonal people they hire and not much more expensive. I've used her for 3 years now.

I used TurboTax last year to claim my father-in-law who gets SSDI. It asks you to enter their income including social security benefits. The key is making sure you know exactly how much is SSDI vs SSI because you'll need to enter the SSDI amount when it asks for Social Security benefits. TurboTax then correctly applies the gross income test.

Thanks for sharing your experience! Did TurboTax specifically ask you to separate SSI from SSDI, or did you just need to know that information in advance?

Did you have to go into an IRS office or was it handled by mail? I'm terrified of audits.