Isn't there a risk of getting audited if you claim too many expenses? I'm a new subcontractor and nervous about deducting too much.

There's always a small audit risk with any business deductions, but it's not about claiming "too many" expenses - it's about claiming legitimate business expenses and having proper documentation. Keep good records of everything - receipts, logs, payment statements. The IRS understands that businesses have expenses. As long as they're legitimate and you can back them up if questioned, you shouldn't be worried. It's your right to take all legal deductions you're entitled to! Just don't make things up or inflate numbers, and you'll be fine.

I've been using Stride for the past couple years. It's free and lets you track mileage with GPS plus all your other expenses. You can take photos of receipts right in the app. Really helpful at tax time because you can categorize everything properly for Schedule C.

What if my tax preparer was a local guy who's now retired? He did my taxes for years but closed his business last fall. Do preparers have to transfer their records when they close or am I just out of luck?

That's definitely a tough situation. When preparers retire, they're supposed to notify clients about what will happen with their records. Many transfer them to another preparer who takes over their business, or maintain limited access to records for situations exactly like this. If you know his name, try searching online to see if there's any information about who took over his clients. You could also check with other local tax offices - sometimes they absorb the clients and records from retiring preparers in the area.

How did you make an appointment? When I called the IRS appointment line it said the wait was over 3 weeks for my local office. Did you just walk in or is there a faster way to get seen?

7 Wait really? That's important to know since I've moved twice since 2020. Do I need to update my address with the IRS before sending the old return?

15 Yes, you should definitely update your address with the IRS before filing your old return. You can do this by completing Form 8822 (Change of Address) and mailing it in before you send your tax return. This ensures your refund check will go to the right place. If you've already sent in your return with an old address, you can still submit Form 8822 afterward, or you can call the IRS directly to update your address. The IRS will usually forward tax refund checks for up to one year if you have mail forwarding set up with USPS, but it's much better to make sure they have your current address on file.

12 Unfortunately, yes. For 2019 taxes, the deadline to claim a refund was April 18, 2023 (three years from the original due date). The IRS is very strict about this three-year rule for refunds - once that window closes, any unclaimed refund money goes to the U.S. Treasury, and you can't get it back.

23 That's smart but what about online orders? I do most of my shopping on Amazon and often mix personal and business items in the same order to save on shipping.

11 For online orders, especially Amazon, I've found a couple workable solutions. First, if you have Amazon Business, you can actually mark certain items as business purchases within a single order and it will generate separate receipt documentation for those items. If you don't have that, another approach is to maintain separate accounts - one for business and one for personal. Yes, you might occasionally pay extra shipping, but the time saved in accounting and the clarity it provides is often worth it. Some business credit cards also provide spending reports that can help categorize your purchases after the fact.

16 Dedicated business card was the best decision I ever made for my side hustle! I use Chase Ink and it automatically categorizes everything in their reporting portal. Only downside is you still need to split those mixed receipt purchases somehow.

I'm not entirely sure of their business structure, but that's definitely something I'll look into. How complicated was the paperwork for this approach? Did you need specialized legal help?

The paperwork is definitely more complex than a straightforward asset purchase. We needed both our tax attorney and accountant involved to structure it properly. The election itself is made on Form 8023, but the agreement needs very specific language to support it. The biggest challenge was agreeing on the asset allocation with the seller since this impacts the tax consequences for both sides. We ended up allocating more value to assets that gave us better depreciation/amortization treatment while minimizing their gain recognition. It took about 6 weeks to finalize all the details, but the tax savings made it worthwhile.

Great point. If bankruptcy is filed within 90 days of any payment or transfer, it could potentially be clawed back as a preferential transfer. I'd recommend doing a solvency analysis as part of your due diligence.