That's really helpful advice about the approach. I'll definitely try framing it as helping them be compliant rather than accusing them of anything shady. Did you have to talk to your direct manager or did you go to HR/payroll directly?

I started with my direct manager who then connected me with our payroll person. In smaller companies, going directly to whoever handles payroll can be more efficient. The payroll person was actually relieved because she had inherited the system from someone else and wasn't sure if it was correct. She made the change starting with the next pay period.

Yeah, that's what makes this suspicious. POS systems and payroll software typically have separate classifications for tips vs. employer-provided benefits. Someone would have had to deliberately choose to classify these meal vouchers as tips. At my restaurant, our meal credits show up as "non-monetary compensation" on our pay stubs, definitely not as tips.

Would this still apply for 2022 taxes? I was unemployed for most of 2021 but also for part of 2022, so wondering if I can use this for next year's filing too.

Unfortunately, the lookback provision was only available for tax years 2020 and 2021 as a temporary COVID relief measure. For your 2022 taxes (which you'll file in 2023), you'll need to use your actual 2022 earned income to calculate your EITC. If you're concerned about a lower EITC for 2022, focus on documenting all eligible earned income you did have during the year, and look into other credits you might qualify for like the Child Tax Credit if you have dependents.

In TurboTax, you need to go to the Deductions & Credits section, then look for "Income that qualifies for certain credits." There should be a question about whether you want to use your 2019 earned income. It's easy to miss if you're clicking through quickly!

What about insurance? The rental companies always try to sell that additional coverage. Is that deductible as part of the rental expense if I use the actual expense method?

Yes, the additional insurance or coverage options you purchase from rental companies would be considered part of your actual rental expenses, so they would be deductible based on your business-use percentage for that specific rental period. Some business owners overlook this, but if you consistently purchase the additional coverage, it can add up to a significant deduction over the course of a year with weekly rentals. Just make sure the insurance expense is clearly itemized on your rental receipts so it's properly documented.

The luxury auto limits still apply to rentals but in a different way. Since you're deducting actual expenses rather than depreciation, you don't run into the same depreciation caps. However, the IRS can still question whether extravagant or luxury vehicle rentals are "ordinary and necessary" business expenses. In your case, since you mentioned you're renting basic economy cars, this shouldn't be an issue. The IRS is mainly concerned with preventing businesses from fully deducting high-end luxury vehicles. Using standard economy rentals for legitimate business purposes shouldn't trigger any special limitations beyond the normal business-use percentage rules.

12 How does the interest work though? Like if I'm paying interest to my own account, isn't that just moving money from one pocket to another?

7 The interest works in your favor actually. When you pay interest on a 401k loan, that interest goes back into your own account. So yes, you're essentially paying yourself, which is much better than paying interest to a bank or credit card company. The interest rate is typically prime rate plus 1-2%, so around 6-8% currently. This money gets added to your 401k balance, so in a way, it forces you to contribute a bit extra to your retirement. The only real "cost" is the potential investment growth you miss out on for the money while it's out of your account.

9 Do medical bills count for avoiding the penalty? I have some medical debt I'm trying to clear.

Do you think age plays a factor in this preference? I wonder if older clients prefer the phone calls while younger ones prefer digital communication. Maybe tax preparers should note communication preferences in their systems?

Age might be a factor for some, but I think it's more about personality and individual preferences than a strict generational divide. I'm in my 50s and strongly prefer text/email, while my 28-year-old daughter likes talking on the phone for business matters. I think you hit the nail on the head with your second point - tax preparers should definitely ask clients about their preferred contact method and make a note in their system. A simple field in the client database would solve this whole issue. Good communication is about respecting how people want to be communicated with.

I feel exactly the same way! My tax situation is complicated with rental properties and self-employment, and I always need that nudge to start gathering documents. My preparer sends one email in January and then one phone call in February if I haven't scheduled yet. Perfect system.