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Former H&R Block employee here. Just wanted to add that there's a middle ground between the "do it all in front of you" approach and the "take everything and come back later" approach. Many independent tax pros (including some CPAs) will do an initial meeting to collect docs, then work on it, then schedule a review meeting where they walk you through everything they did and answer questions before filing. That way you get the benefit of their focused attention when preparing it AND you still get to see and understand what they did before it gets submitted. Just ask about their process when you're interviewing potential CPAs!
This is super helpful! That middle ground approach sounds perfect for what I'm looking for. Do most CPAs offer this option if you specifically ask for it?
Most CPAs are actually happy to offer this approach if you specifically request it. It's often their preferred method too since it gives them time to work thoroughly without rushing while still providing you with good service and explanation. Just be clear about what you want when you first contact them. I'd recommend saying something like: "I'd like to schedule an initial meeting to provide my documents, then have you prepare the return, and finally meet again so you can explain everything before filing." Many will already have this exact process in place, but being specific helps ensure you get what you're looking for.
One thing nobody mentioned - CPAs tend to be way more expensive than H&R Block. I switched last year and paid almost triple what I used to pay. For me it was worth it because the CPA found deductions I never knew about that more than covered the difference, but just be prepared for sticker shock!
That's a really good point! I paid about $450 for a CPA last year versus the $150 I was paying at H&R Block. But my CPA found over $2,000 in deductions I would have missed, so definitely worth it in my case. Price really depends on how complicated your return is.
I've been living in Washington state for years and honestly the community property thing isn't that bad once you get used to it. The 50/50 split actually helped us when my wife started making way more than me - evened out our tax brackets. Pro tip: keep really good records of what property/assets you had BEFORE marriage because that stays separate property. Made that mistake our first year filing and it was a nightmare sorting it out.
Do you know if common property rules still apply if you're legally married but have a prenup? Our agreement specifically states our incomes remain separate, but I'm not sure if the IRS cares about that for Form 8958 purposes.
Yes, the IRS does actually recognize prenups for tax purposes in community property states, but the rules are very specific. Your prenup needs to explicitly outline how income and assets should be treated (not just a general "our incomes are separate" statement). You'll still need to fill out Form 8958, but you would allocate income according to your prenup rather than the standard 50/50 split. However, make sure your prenup complies with your state's requirements for it to be valid - some states have very specific rules about prenups overriding community property laws.
random question but does anyone know if crypto gains count as community property? bought bitcoin before marriage but sold during. tax software is giving me weird results when i split it 50/50 vs claiming it all myself
Generally, if you bought it before marriage, the original investment stays your separate property. However, any appreciation during marriage is typically considered community property in most community property states. So you'd need to establish the value at the time of marriage and then split the gains from that point forward.
Former accountant here - one thing to keep in mind is that even if you don't receive all your 1099-NECs, you're still legally obligated to report all your income. The IRS matches the 1099s they receive against what you report, so if you underreport, that's a red flag. I recommend keeping a simple spreadsheet throughout the year tracking payments from each company. That way, if a 1099 never arrives or has an incorrect amount, you still have your own records to reference. This helps avoid the last-minute scramble when tax time comes around.
Thanks for the advice! I do keep track of all my payments in a spreadsheet, but I was worried about what happens if my numbers don't match what's on the 1099s. Like what if I think a company paid me $7,500 but their 1099 says $8,000? Who is the IRS going to believe?
The IRS tends to go with what's reported on official tax documents like 1099s, but that doesn't mean you're stuck with incorrect information. If you receive a 1099 with an error, contact the issuer immediately and request a corrected form. They should issue a corrected 1099-NEC, which they'll also send to the IRS. If they refuse to correct it or you can't get it resolved before the filing deadline, you should still report your accurate income based on your records. On your tax return, you'd report the full amount shown on the incorrect 1099 to avoid automatic matching issues, but then make an adjustment to correct it. A tax professional can help you document this properly with your supporting evidence.
Just a heads up - I'm also a content creator and last year one of my sponsors sent my 1099 to my OLD mailing address even though they had my updated info for payments. When I called them they said their payment system and tax form system were separate and didn't communicate with each other š So definitely email all your sponsors NOW to confirm they have your correct address. It's such a pain but better than scrambling at the last minute. I also take screenshots of all my income transactions throughout the year just in case there are discrepancies.
Something nobody's mentioned yet - even with zero sales, you might need to file other forms depending on your state. For example, in California, LLCs have to file a Form 568 and pay an annual $800 franchise tax even if you had no activity. Check your state's requirements for LLCs. Some states require annual reports or have minimum taxes regardless of whether you had any income. That's separate from your federal filing requirements.
Oh that's a good point! I'm in Minnesota - do you know if there are similar requirements here? I paid the initial filing fee but wasn't aware of any annual requirements.
In Minnesota, you do have an annual filing requirement - you need to file an Annual Renewal with the Secretary of State by December 31st each year. The good news is there's no fee for the annual renewal in Minnesota (unlike California's painful $800 minimum), but you must file it or your LLC could be administratively dissolved. You can do this online through the Minnesota Secretary of State website. It's pretty straightforward - just updating your registered agent and address information. This is separate from your tax filing requirements.
Make sure you keep all your receipts organized! I messed up my first year with my LLC by not properly tracking expenses, and it was a nightmare come tax time. I recommend setting up a simple spreadsheet now with columns for date, vendor, amount, expense category, and payment method. Add all your 2024 expenses and keep it updated going forward. This will be super helpful when you file taxes next year and actually have some income to offset those expenses against.
Kara Yoshida
Wait, so all moving expenses aren't deductible now? I moved last year for a new job that was 300+ miles away. My tax guy said I could deduct it?? Now I'm worried I'm gonna get audited.
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Khalid Howes
ā¢If you're not active-duty military, then no, moving expenses haven't been deductible since 2018 due to the Tax Cuts and Jobs Act. This suspension runs through 2025. If your tax preparer deducted moving expenses on your 2024 return and you're not active-duty military, you might want to consider filing an amended return to correct this. It's better to fix it before the IRS notices, as penalties and interest can add up.
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QuantumQuester
Has your friend considered taking the Section 195 startup cost deduction? The IRS allows you to deduct up to $5,000 of business startup costs in the first year (subject to limitations if total startup costs exceed $50,000), with the remainder amortized over 15 years. Some of his expenses might qualify if they're directly related to investigating or setting up the business.
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Yara Nassar
ā¢Section 195 doesn't cover moving expenses though, right? I thought it was more for things like market research, analyzing potential locations, legal fees for setting up the business structure, etc.
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