Thank you for the encouraging words and practical tips! I do work from home so the home office deduction sounds perfect. For the mileage - does that include driving to meet clients or pick up supplies? I haven't been tracking that at all.

Yes! Mileage includes ANY driving for business purposes - client meetings, picking up supplies, going to the post office for business mail, driving to the bank to deposit business checks, etc. Basically anything except your regular commute (which you don't have if you work from home!). Start tracking immediately for 2024 - there are free apps like MileIQ that make it super easy. For 2023, you can reconstruct a reasonable estimate using your calendar, email confirmations, receipts from supply stores, etc. Just be realistic with your estimates in case of an audit.

Wait I'm confused about the math. If the standard deduction is like $20k for Head of Household, and she only made $10,500, how does she owe any taxes at all? Isn't the first $20k tax-free?

Are you sure about this? I've read conflicting info online and don't want my payment to get misapplied. Would "Amount Owed on Notice" be more appropriate than "Tax Due on Return" since this is from a notice?

I've paid three different CP notices this way over the years and never had any issues. The key is making sure you enter the correct tax year and form number along with it. However, "Amount Owed on Notice" would also work fine. The most important thing is that you include your SSN, the correct tax year (2018), and the form number referenced on your notice. The payment system will attach the payment to your account regardless of which of these two options you select. The IRS cares more about identifying YOU correctly than the specific reason code you choose from their dropdown.

The IRS generally doesn't report to credit bureaus directly, but tax liens used to show up on credit reports. However, since 2018, the three major credit bureaus no longer include tax liens on credit reports as part of their National Consumer Assistance Plan. That said, you should still address it ASAP. If you can't pay in full, set up a payment plan on the IRS website under "Pay" and then "Payment Plans." This shows good faith and stops most aggressive collection actions.

Does this step-up in basis apply even if the property is held in an LLC? My tax guy told me it might not work the same way.

The step-up in basis generally applies regardless of whether the property is in an LLC or not, as long as it's what's called a "disregarded entity" or a pass-through LLC for tax purposes. If you have a single-member LLC or a multi-member LLC that files as a partnership, the step-up should still apply. Where your tax guy might be cautious is if you have an LLC that's elected to be taxed as a corporation. In that case, the rules get more complicated and the step-up might not apply in the same way. The ownership is of the corporate shares, not directly of the real estate.

Wait but didn't you also make money on the property appreciation itself? Seems like you're only looking at one piece of the puzzle.

But doesn't this mess up your book value in Quickbooks for future years? If you don't depreciate it at all in Quickbooks, won't your financial statements show an asset that should be fully depreciated?

That's a really good point about the book value. In January of the following year (2023), after you've filed your taxes, you should go back to Quickbooks and add a manual depreciation entry that matches what you took on your tax return. This way, your financial statements will reflect the proper book value going forward. Think of it as keeping two separate depreciation tracks - tax depreciation (handled in TurboTax) and book depreciation (which you'll update in Quickbooks after filing). The key is to not have any depreciation in Quickbooks during the import process to avoid duplication.

Is there any chance Congress extends the 100% bonus depreciation? I've heard rumors they might keep it at 100% to help small businesses, but haven't seen anything official.

There's always a possibility that Congress could extend the 100% bonus depreciation, but I wouldn't count on it. While there have been some discussions about extending certain business tax benefits, nothing concrete has been proposed regarding bonus depreciation specifically. The phased reduction (100% to 80% to 60%, etc.) was built into the original Tax Cuts and Jobs Act legislation with the specific intent of gradually reducing the benefit. For planning purposes, it's safer to assume the reduction will continue as scheduled unless you hear official news about an extension. If you have planned asset purchases and can move them up to qualify for the higher percentage, that's the more conservative approach.

That's a really helpful perspective I hadn't considered. Our son is financially responsible, but this might be valuable info for friends in different situations. Does a Spendthrift Trust still avoid probate like a regular living trust?

Yes, a properly structured Spendthrift Trust still avoids probate just like a regular living trust would. The main difference is just the added protection and control over how and when distributions are made. Many people don't realize that these specialized trusts can be created for reasons other than disability - sometimes it's just about protecting someone from their own financial decisions or from predatory relationships. The important thing is that they offer the same probate-avoidance benefits while adding an extra layer of protection.

Did adding your daughter trigger a property tax reassessment in your county? In our area, parent-child transfers get an exclusion from reassessment, but only if you file the right paperwork within a certain timeframe.

No reassessment in my case, but that's because I filed for the parent-child exclusion with our county assessor's office. You have to file Form BOE-58-AH (at least in our county) within 3 years of the transfer to claim the exclusion. If you miss that window, they can reassess the property to current market value, which would have increased my property taxes by about 400% given how long I've owned my home! Definitely check your local rules and don't miss any deadlines.