Wait, seriously? So if I buy $5000 of Bitcoin and it goes up to $5500 by the time I pay my supplier, I have to pay capital gains tax on that $500 increase? Even though I'm just using it to pay for inventory?

That's exactly right. The IRS views crypto as property, not currency. So when you use crypto to pay for business expenses, you're essentially "selling" your crypto for its fair market value and then using that value to pay your supplier. In your example, you'd have a $500 capital gain on the crypto transaction, but you'd also have a $5500 business expense deduction. So you're still coming out ahead tax-wise, but you do need to report both aspects of the transaction. This is why good record-keeping is extra important with crypto payments - you need to track both the business expense side and the crypto disposal side.

Does FBAR apply to crypto held on foreign exchanges? I've heard conflicting things about this.

Are you sure about that 3-year deadline? I thought if you're owed a refund, there's no penalty for filing late and you can do it anytime?

Yes, I'm 100% certain about the 3-year deadline for claiming refunds. The IRS gives you three years from the original filing deadline to submit a late return and still get your refund. After that window closes, any refund you were entitled to becomes government property - you lose it completely. This is different from owing taxes, where there's no deadline to file (though penalties and interest keep accumulating). But for refunds, it's a use-it-or-lose-it situation with a strict 3-year limit. Since 2022 taxes were originally due in April 2023, you have until April 2026 to claim any refund for that year.

That doesn't sound right. Most states only tax you for the portion of the year you were a resident. Did you try filing as a part-year resident?

Thanks for mentioning Form 8283. My donation was actually just a wire transfer though - it wasn't a non-cash donation. Would I still need that form? And what about the appraisal requirement?

For a cash donation (like your wire transfer), you won't need Form 8283 or an appraisal - those are only for non-cash donations like property, stocks, artwork, etc. For your cash donation, you'll need a receipt or acknowledgment letter from the organization that includes: the organization's name, the amount donated, the date of the donation, and a statement that no goods or services were provided in exchange for the donation. Since your donation is over $250, this written acknowledgment is absolutely required by the IRS.

TurboTax works fine but you have to manually enter the charity as "Other" and then fill in all the details yourself. The software won't verify if the organization is actually eligible for deduction though - that research is on you.

This is so incredibly helpful and encouraging! I've been worried that my deafness would be a major obstacle, but you've made me see how it could actually be structured as an advantage. Would you mind sharing what transcription app you use for those video calls? And did you mention your hearing status upfront in your marketing or just your communication preferences?

I use Otter.ai for most transcription needs - it works really well for video calls and integrates with Zoom. I've also had good experiences with Microsoft's transcription tools which are built into Teams if your clients prefer that platform. I don't explicitly mention being hard of hearing in my initial marketing materials. Instead, I focus on the benefits of my communication style - "comprehensive written documentation," "efficient digital workflows," and "secure client portal communications." However, I am open about it once I'm in direct communication with potential clients. I frame it positively: "I've developed a streamlined communication system that ensures nothing gets missed and all advice is documented for your records." Most clients actually appreciate this approach, especially when they realize they can send questions at 10pm and get a thoughtful written response instead of playing phone tag.

Do most self-employed CPAs offer payment plans for clients? I'm wondering if that's something I should build into my business model from the start.

Wait, so I need to file both Form 1098 AND Form 1099-INT? That seems redundant. Couldn't I just file one of them? And regarding the amortization - our agreement does specify an interest rate (5%), but not exactly how much of each payment is principal vs interest. Does that mean I need to create an amortization table?

Yes, you may need to file both forms as they serve different purposes. Form 1098 reports mortgage interest that the borrower has paid to you, which they can potentially deduct. Form 1099-INT reports interest you've paid to someone else. However, in your specific case, since this is mortgage interest being received by you (not interest you're paying out), you likely only need Form 1098, not 1099-INT. I apologize for the confusion. Since your agreement specifies a 5% interest rate but doesn't break down each payment, you should definitely create an amortization table. This will help you properly track how much of each payment is interest versus principal reduction. You need this to accurately report your interest income and to provide correct information to your family member for their potential deduction. Most spreadsheet programs have templates for creating these tables.

This is a really good point about installment sales! I did a seller-financed deal last year and completely missed filing Form 6252. Had to file an amended return. The property was actually a rental I sold to a tenant, so I had depreciation recapture to deal with too. That's a whole other can of worms!