What kinds of documentation do you recommend keeping for large medical expenses? My insurance company's explanation of benefits doesn't always match what I actually paid, and I'm worried about getting audited.

Documentation is crucial for medical deductions. Keep all receipts showing actual payment (not just bills or statements), explanation of benefits from insurance showing what wasn't covered, and bank/credit card statements proving payment. If there's a discrepancy between EOBs and what you paid, keep records explaining the difference. For unusual medical expenses (special equipment, home modifications, travel for treatment), get a letter from your doctor stating these were medically necessary. The IRS looks closely at large medical deductions, so documentation is your best defense. Organize everything by date and provider, and keep a spreadsheet summarizing all expenses. This preparation makes the process much smoother whether you use H&R Block or a CPA.

I've done both. Used H&R Block for years then switched to a CPA last year for a complicated medical situation with my special needs child. The CPA found almost $2,300 more in deductions than I would have gotten at H&R Block. She knew about specialized medical deductions for adaptive equipment and certain therapies that H&R Block missed in previous years.

Thanks for this info! I actually did opt out already (mentioned in my update), but I wasn't sure if it would actually work or how long it would take. Good to know someone else has successfully done this too. Did opting out cause any delays or issues with your refund?

Opting out didn't cause any delays with my refund at all. The whole process was pretty smooth. My return was accepted about a week before I accidentally opted in for the PIN, then I opted out about 3 days later. The refund came exactly when the "Where's My Refund" tool originally estimated. Just make sure you keep an eye on your account next January to confirm you don't automatically receive a new IP PIN for the 2025 filing season. The system should recognize that you've opted out, but it never hurts to double-check before you file.

Really? That's reassuring! What about for next year though? Will they need to use the IP PIN next year or can they just use a self-selected one again if they opted out of the IP PIN program?

Thanks for this perspective! Could you clarify what counts as "reasonable documentation" for small cash transactions? And how worried should I be about the home office deduction? I've heard mixed things about whether it increases audit risk.

For small cash transactions, a simple log or journal is sufficient - date, amount, purpose, and from whom if applicable. The IRS doesn't expect small business owners to provide receipts for every $5 transaction, but they do expect you to have a system. Apps that track expenses are great for this. The home office deduction has lost much of its audit trigger reputation in recent years, especially since so many more people work from home now. Just be honest about the square footage and exclusive use. The simplified option ($5 per square foot up to 300 sq ft) is very audit-friendly since it's standardized. If you're legitimately using the space exclusively for business, take the deduction - it's yours by right.

What's your method for the "reasonable monthly allowance" part? Do you just estimate an average or do you have some system to make sure it's accurate enough?

That's a really interesting approach I hadn't thought of. Do you typically find that the equity accounts in QuickBooks accurately reflect true tax basis? I've seen some companies where the books don't properly track things like Section 179 adjustments or other tax-specific items.

You're right that QuickBooks equity accounts won't perfectly match tax basis. They're just a starting point. The biggest discrepancies usually come from 179 deductions, depreciation differences, and non-deductible expenses. Look for a reconciliation schedule in the prior preparer's workpapers that bridges book to tax. If that doesn't exist, you can build one by comparing Schedule M-1 adjustments across years. The equity accounts give you the structure, then you layer on the tax adjustments. It's still work, but often less than starting from scratch with just K-1s.

I've used these materials and they're excellent. The basis worksheet is particularly helpful for new preparers. Just note that they don't fully address some of the more complex situations like multiple classes of stock or special allocations.

Thanks for mentioning Form 3921! I do have that form and have been keeping it with my tax documents. One question though - when reporting the sale, do I need to reference this form or attach anything special to my return? Or do I just use it to determine my cost basis when filling out Schedule D?

You don't need to attach Form 3921 to your return or reference it specifically. It's primarily for your records to help you accurately report the transaction. You'll use the information from it to determine your cost basis when filling out Schedule D. When you sell, your brokerage will report the sale on Form 1099-B, but often they don't have your correct cost basis for ISO shares, so you may need to make an adjustment. That's where your Form 3921 comes in handy - it has the correct information for your cost basis (what you paid when exercising).

I used TurboTax Premier last year for my ISO sales and it worked fine. There's a specific section for stock options and it walks you through the process. Just make sure you have all your documentation ready (exercise price, date of exercise, sale price, etc). The key is entering the correct cost basis.