This is great advice but what about cash transactions? I paid some of my business expenses in cash and have literally zero proof. Is there any way to claim those or am I just out of luck?

For cash transactions, you're in a tougher spot, but not hopeless. Try to find any indirect evidence - ATM withdrawal records from your bank statements that align with when you think you made purchases, any notes or calendar entries about what you were buying or why. The key is reasonableness - if you can show a pattern (like you regularly withdrew $200 in cash every month for business supplies), that's better than nothing. Just be honest and consistent with your reconstruction, and only claim what you're confident you actually spent. And in the future, either keep receipts for cash purchases (even taking a quick photo with your phone works) or use a credit/debit card for better tracking.

This is reassuring to hear! Was there anything specific that triggered your audit? I'm trying to figure out what to avoid so I don't get flagged...

Can you explain more about these phase-outs? I've heard about QBI but my accountant said I probably can't use it because of my income level (around $225k).

The phase-outs start at $170,050 for single filers and $340,100 for joint filers (for 2022 tax year, slightly higher for 2023). Above those thresholds, the deduction starts to phase out for specified service businesses (legal, health, consulting, financial services, etc.). For non-service businesses, instead of phasing out completely, the deduction becomes limited based on W-2 wages paid and qualified property. This is where it gets tricky - sometimes paying yourself MORE in W-2 wages actually increases your QBI deduction if you're over the threshold. That's why personalized analysis is so important.

If you have an S-Corp, health insurance premiums paid for a >2% shareholder (which you would be) must be reported as income on your W-2, but then you get to deduct them on your personal return. It's a wash tax-wise, but requires the proper paperwork. For an LLC taxed as a sole proprietorship, you can take the self-employed health insurance deduction directly on your personal return without running it through payroll.

This is true but dangerous advice without context. Even if you're under the threshold, you might still want to file if you had any taxes withheld from paychecks because that's the only way to get a refund of that money. Also, certain credits like the Earned Income Credit require filing to receive them.

Does TaxAct specifically handle the nominee distribution situation for inherited savings bonds? I've been using TurboTax but couldn't find this feature. Does it also file the 1096 form that needs to accompany the 1099-INTs?

Yes, TaxAct has a specific module for handling nominee distributions, including from savings bonds. When you indicate you received interest that partially belongs to someone else, it walks you through reporting your portion on your return and then helps you prepare the 1099-INTs for the other recipients. It also handles the 1096 form automatically as part of the e-filing process. If you choose to e-file these information returns, you don't need to worry about the red forms at all since everything is submitted electronically. TurboTax might have this feature too, but it's sometimes in their higher-tier packages.

I tried using the FIRE system last year and found it incredibly confusing. It's not designed for casual users or one-time filers. You need to follow very specific file format requirements and testing procedures. I ended up just paying a tax professional to handle it for me.

Be really careful with home office deductions though - it's supposedly one of the biggest audit triggers if not done right. Don't you need to have a room that's ONLY used for business? Like not a shared space at all?

You're absolutely right about being careful. The space needs to be used "regularly and exclusively" for business, but it doesn't have to be an entire room. It can be a clearly defined part of a room, like a desk area in your living room that's only used for business activities. The key is making sure you're running a legitimate business with the intention of making a profit, not just a hobby. Keep detailed records of all business activities, expenses, and income. Take photos of your workspace too. I've been doing this for 3 years now and while I haven't been audited, I make sure I could defend every deduction if needed.

Doesn't being an authorized user on any card build credit though? Like couldn't you just add him to your regular personal credit card? I don't see how this is a tax thing at all.