Does FreeTaxUSA have good support if you have questions? I'm always nervous about doing it myself in case I mess something up.

Their support is pretty decent - you can email them questions and they usually respond within a day. If you need immediate help, their knowledge base is really comprehensive and has answers to most common questions. For basic stuff like W-2s and simple 1099 work, it's very straightforward. The software walks you through everything step by step. I've been using it for 5 years with no issues, even when my tax situation got more complicated with rental property.

Thank you for confirming what I suspected! I actually called H&R Block's customer service line and complained about the lack of upfront pricing, and they agreed to reduce my fee to $199. Still more than I wanted to pay, but better than $349. Definitely doing it myself next year with one of the options you all suggested.

Do you have a specific mileage tracking app you recommend? And for the home office thing - is that still beneficial if we have an LLC? Does each partner get to claim their own home office or just one of us?

I personally use MileIQ, but there are several good ones like Everlance or Stride. Just make sure it logs your starting/ending points and lets you categorize trips. For the home office deduction, yes, it's still beneficial with an LLC since the LLC income passes through to your personal returns. Each partner can potentially claim their own home office deduction if they each use space in their respective homes exclusively for managing the rental business. The key word is "exclusively" - the space can't be used for anything else. The deduction would be proportional to your ownership percentage in the LLC.

Honestly, TurboTax is awful for complex situations like rental properties with partners. I switched to H&R Block's premium version and it walks you through the partnership stuff MUCH better. You'll enter the partnership info on Form 1065, which generates K-1s, then each partner enters their K-1 info on their personal returns.

Thanks so much for mentioning this! What kind of records specifically did you need to keep that you weren't keeping? I'm trying to understand how much additional paperwork I'll be taking on if I make the switch.

For the operating agreement, you need formal corporate bylaws that outline how the business operates. You'll need to hold annual shareholder meetings (even if you're the only shareholder) and keep written minutes of those meetings documenting major business decisions. You'll also need to file Form 1120-S (the S-Corp tax return) annually, plus provide K-1 forms to all shareholders showing their share of profits. You must maintain completely separate finances - separate bank accounts, credit cards, and clear documentation of all money moving between you personally and the business. My big mistake was taking money from the business without properly documenting whether it was salary or distributions. The IRS sees this as co-mingling funds and can use it to invalidate your S-Corp status.

Yes, you can have multiple business activities under one S-Corp. The key is proper accounting and record-keeping to track income and expenses for each activity. You'll report everything on one tax return but you may need to use different business codes and complete certain schedules to properly categorize the different revenue streams.

Do you meet with your CPA in person or is it all virtual? I've been thinking about using someone out of state because they're cheaper than local options but wondered if that creates any issues.

I started with in-person meetings pre-pandemic, but we've been completely virtual for the past two years and it works great. I upload all my documents to her secure portal, we have a video call to discuss any questions, and then she prepares everything. For your situation, using someone out of state can work fine for federal taxes, but just make sure they're familiar with your state's tax laws if you have state income tax. My CPA specializes in my state's property tax rules which is helpful for my rental, but if you don't have special state circumstances, location probably doesn't matter much.

Those tax prep chains are so hit or miss. My parents got a great preparer at Jackson Hewitt for years but when that person left, the new person missed tons of stuff. I think it really depends on the individual preparer's experience more than the company.

Exactly! I think that's the problem - these big chains hire seasonal workers, give them minimal training, and then put them to work. Some might be great if they happen to have background knowledge, but many just follow the software prompts. My CPA actually takes continuing education courses every year to stay current on tax laws and asks me thoughtful questions about my situation that the H&R Block person never considered. She caught that I could deduct some medical expenses and home office deductions that were completely missed before.

Wait seriously? I thought you only report what you actually received after the app's commission. Is that really how it works? Now I'm even more confused about this 1099-K stuff.

Yes, that's exactly how it works. The 1099-K reports the gross amount processed through the platform, before they take their cut. So if passengers paid $10,000 total and the app took $2,000 as their commission, your 1099-K will show $10,000. You then report that full $10,000 as your gross receipts on Schedule C, but you also get to deduct the $2,000 in fees as a business expense on the same form. The net effect is the same - you're only taxed on the $8,000 you actually received - but the reporting has to be done this way.

I use MileIQ and it's pretty automatic - just swipe drives as business or personal. Around $60/year but worth it for the deduction. Stride is free but more manual. Both export nice reports for your 1099-K related driving work.