Thanks for pointing that out. I held most of these coins for over a year, but some of the DeFi stuff was shorter term. Do I need to separate those out specifically on different forms, or just calculate different rates?

You'll report them separately on your Schedule D and Form 8949. You'll use different sections of Form 8949 - Part I for short-term transactions and Part II for long-term. Each transaction gets reported individually with its purchase date, sale date, proceeds, and cost basis. This is where good record keeping becomes really important, as you need to know the specific purchase and sale dates for each position. If you're using tax software, it will guide you through this process and calculate the appropriate tax for each category.

Using $0 cost basis is the nuclear option though - definitely a last resort! I'd exhaust every possible method to reconstruct your basis before going that route. Bank statements, credit card statements, emails from exchanges confirming purchases - anything can help establish at least some basis.

Thanks for this insight! Do you think it's reasonable to negotiate a rate increase after I've completed a certain number of returns or after a specific time period?

Absolutely! That's a very common arrangement. You could propose starting at a lower rate while training (maybe $30-35/hour), then bump up to $40-45 after you've successfully completed 10-15 S Corp returns or after the first month, whichever comes first. Just make sure to get this agreement in writing before you start. Many CPAs will happily agree to this structure since they expect you'll become more valuable as you gain experience with their specific clients and processes. It also gives you a built-in opportunity to revisit compensation without having to initiate an awkward conversation later.

Good point. When I subcontracted, the CPA provided access to their Drake software through a remote login, but I had to use my own computer and internet. Some may expect you to have your own ProSeries or UltraTax license which would be crazy expensive for a subcontractor.

How do you qualify for that 20% deduction? Is there a minimum income requirement? I just started my LLC mid-year and only made about $24k so far.

There's no minimum income requirement for the QBI deduction, so your $24k of LLC income would qualify! The calculation gets complicated if your total taxable income (from all sources) exceeds $170,050 for single filers or $340,100 for married filing jointly (2023 thresholds), but below those thresholds it's pretty straightforward - you get 20% of your qualified business income as a deduction. Just make sure you're tracking your business expenses properly on Schedule C first, as the QBI deduction is based on your net business income after expenses. TurboTax should walk you through this calculation after you enter your Schedule C information.

At what income level did you find S-Corp election worthwhile? I've heard you need to make enough to offset the extra accounting costs and payroll requirements.

14 Would that still work if it's been more than 2-3 years? I thought there was some deadline for removing excess contributions without penalties.

5 You're right that there's a deadline for removing excess contributions without the 6% penalty - it's typically by the tax filing deadline plus extensions (around October 15th) for the year of the contribution. Since the OP's situation involves contributions from 2020-2022, they would likely still owe the 6% penalty for each year the excess remained in the account. However, most IRA providers can still process the removal of excess contributions even after this deadline. The benefit is that removing the excess now stops the 6% penalty from continuing to apply to future years.

2 This is terrible advice. The IRS receives direct reporting of IRA contributions from financial institutions. If their systems flag a mismatch between your reported income and Roth eligibility, it'll trigger an automated notice. Besides, the penalties compound the longer you wait. Better to fix it proactively than risk bigger headaches down the road.

What supporting documents did you need to include? I'm not sure what to attach with mine.

It depends on what you're amending! For my situation, I was adding some dividend income I missed, so I included the corrected 1099-DIV form. Generally, you should include any documents that support the specific changes you're making. If you're changing income, include the corrected income statement. If you're adding a deduction, include receipts or documentation of those expenses. If you're changing filing status, include documentation that supports that change. The IRS instructions for Form 1040-X have a good section on what to attach. If you're not sure, include more documentation rather than less - better to give them everything they might need than to have them request additional info later.

Omg thank you so much for this insider perspective! That's honestly such a relief to hear. I've been losing sleep over this and its good to know I'm not on some automatic audit list. I'll make sure to be super clear about why I'm filing the amendment and include everything they might need!