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Have you considered the Voluntary Disclosure Program? My father-in-law was in a somewhat similar situation. The IRS has procedures for people who want to come clean about unfiled returns. Since your dad has passed away, they might be more lenient, especially if there's no evidence of intentional fraud. We ended up only having to file 6 years back and negotiated a reasonable payment plan for what was owed.
I hadn't heard of this program. Would this still apply even though he passed away? And how did you handle estimating income when there were no clear records?
Yes, it still applies for deceased taxpayers when the estate representative initiates the disclosure. The program essentially acknowledges that you're coming forward voluntarily before any IRS enforcement action. For estimating income, we used industry standard profit margins for his type of business, looked at his living expenses and assets acquired during those years, and made reasonable estimates. We documented our methodology carefully and explained the cash-only nature of his business. The IRS was actually surprisingly reasonable once they understood we were making a good faith effort. For some years, we used Form 8275 (Disclosure Statement) to explain our estimation methods. The key was being transparent about how we arrived at the figures rather than just putting random numbers.
Just wondering... did your dad own the house he lived in? If so, did he have a mortgage or was it paid off? Sometimes property records and mortgage info can give some clues about income, at least at the time he acquired the property.
He did own his house - bought it in the late 90s and paid it off around 2003 according to what he told me. But I can't find any mortgage paperwork. That's a good idea about property records though, I should check with the county assessor's office to see what they have. That might at least give me some baseline for what he was earning back when he qualified for the mortgage.
Hey just want to throw out there that if you can't find software that supports Form 8915-e yet, paper filing really isn't as bad as people say. I had to paper file last year for a different reason and it only took about 6 weeks to process which was way better than I expected.
No way! I paper filed in February and I'm STILL waiting for my refund. The IRS is a disaster right now. E-file if you possibly can.
Just checked with my CPA and they confirmed that UltraTax CS (Thomson Reuters) has Form 8915-e available now. If you need this form urgently, might be worth paying a professional who uses one of these higher-end software packages that get priority updates.
Have you considered doing it yourself instead? I switched from paying $800+ to using tax software for my S Corp about two years ago. There's definitely a learning curve, but once you understand the forms (which it sounds like you already do), it's not that complicated for a simple structure like yours. I use TaxAct Business which costs around $110 for federal + state 1120S. First year took me about 6-7 hours, second year was down to about 3 hours. Considering I was saving $700+, that's a pretty good hourly rate for my time. The software walks you through everything and has built-in error checking. Since you're already organizing everything line-by-line, you're doing half the work anyway.
Does the software handle the reasonable compensation requirements and QBI calculations properly? I tried doing my own S Corp return once and ended up with a notice from the IRS about my salary being too low relative to distributions. Cost me way more than what I saved on preparation.
The software does have warnings about reasonable compensation if your salary seems too low compared to distributions, but it doesn't give specific guidance on what's "reasonable" - that's still on you to research and determine. For QBI, it does the calculations automatically once you enter all the required information. The wizard asks you questions about your business type and aggregation elections to determine eligibility. It's actually handled really well. You're right that getting those aspects wrong can be costly - I spent extra time researching those specific areas before filing. There are also some good YouTube tutorials specifically on S Corp tax prep using the major software packages that helped me avoid common mistakes.
Just want to point out something others haven't mentioned - those national chains often have staff with varying levels of experience. If you're paying on the lower end ($600), you're likely getting a newer preparer who's basically following a script and entering data. If you're paying closer to $1500, you should be getting a more experienced preparer who's doing more analysis. My advice? If you really want to stick with a professional, find a small local CPA firm that specializes in small businesses. They'll often charge similar to what you're paying now but provide WAY more value - actual tax planning, mid-year check-ins, business advice, etc. The national chains are basically factories during tax season with huge staff turnover.
That makes a lot of sense about the experience levels. I think I'm actually going to look into a local firm based on your suggestion. I'm realizing now I've been evaluating purely on price rather than value. I don't mind paying the same amount if I'm getting actual business advice along with the tax prep. Do you think it's too late to switch for this tax season, or should I wait until next year?
9 One specific recommendation - make sure you're tracking these common notary-specific deductions: 1. E&O insurance (essential for signing agents) 2. Your notary commission fee 3. Surety bond costs 4. Notary stamp/seal and journal 5. Mileage to and from signings (this adds up fast!) 6. Printer, paper, and ink for printing loan documents 7. Background screening fees 8. Professional association memberships 9. Continuing education costs Many new notaries miss these deductions and end up overpaying on taxes. Also look into whether your state allows you to charge separate travel fees vs. notary fees, as they might be treated differently for tax purposes.
2 Do you know if I can deduct the initial cost of my certification course and background check? I spent almost $500 getting certified and wasn't sure if that counts since it was before I actually started working as a signing agent.
9 Yes, you can absolutely deduct the initial certification costs and background check fees! Those are considered start-up costs for your business, and the IRS allows you to either deduct them in the first year (up to $5,000) or amortize larger start-up costs over 15 years. Even though you paid for them before earning your first dollar as a notary, they're directly related to your business and completely deductible. Just make sure you keep the receipts and documentation showing these were required steps to become a signing agent.
12 A tip nobody told me when I started as a notary signing agent: consider making an S-Corp election after you start making decent money (like $40k+ annually). I wasted thousands in unnecessary self-employment taxes my first two years before figuring this out.
5 Can you explain more about this S-Corp thing? I've heard people mention it but don't really understand why it would save on taxes or when it makes sense.
Matthew Sanchez
Have you looked into if your health insurance qualifies as an HDHP (High Deductible Health Plan)? If it does, you might be eligible to contribute to an HSA which gives you a tax deduction for the contributions. For 2025, married couples can contribute up to $8,050! This is separate from how you handle the stipend income. Also, don't forget to check if you qualify for the Premium Tax Credit. Even with the stipend, if your income is within certain ranges and you bought your insurance through the marketplace, you might be eligible.
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Ella Thompson
ā¢We have an HDHP with an HSA that we max out, but I'm confused about how the employer stipend affects the Premium Tax Credit. Our plan isn't through the marketplace - does that automatically disqualify us?
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Matthew Sanchez
ā¢Yes, that's a key point I should have clarified - to qualify for the Premium Tax Credit, you must purchase your health insurance through the Health Insurance Marketplace (Healthcare.gov or your state's exchange). If you bought your insurance privately outside the marketplace, you won't be eligible for the Premium Tax Credit regardless of your income. For your HSA, you're making a smart move by maxing it out! The stipend doesn't affect your HSA contribution limits at all. You'll still get the full tax deduction for your HSA contributions even while receiving the stipend, which is one of the few "double benefits" allowed in the tax code.
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JacksonHarris
Has anyone used TurboTax to handle this kind of situation with private health insurance and employer stipends? Did it ask the right questions to handle everything correctly?
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Jeremiah Brown
ā¢I used TurboTax last year with a similar situation. It did ask about health insurance and whether I received any stipends, but I found it confusing. I had to manually make sure the stipend was included as income (mine was on my W-2 already). The medical expense deduction part worked fine though - it walked through itemizing and the 7.5% AGI threshold clearly.
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Royal_GM_Mark
ā¢I tried freetaxusa instead of TT and it handled my health insurance stipend situation perfectly. It specifically asked if I received any benefits for health insurance and guided me through reporting it correctly. Much cheaper than TT too!
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