20 Good point about the house allocation. How would you recommend splitting this up on tax forms? Should the house be completely separate from the business assets?

2 I'd recommend separating the house value from the business assets when determining what portion of expenses (like mortgage interest and property taxes) are deductible business expenses. One approach is to determine the house's value as a percentage of the total property value, then allocate that percentage as personal use. The house doesn't need to be completely separate - the LLC can still own the entire property. You just need to properly allocate expenses between business and personal use. If you're not paying market-rate rent to the LLC for your personal use, there could be imputed income or other tax consequences to consider, so that's something to discuss with a tax professional familiar with your specific situation.

19 Yes, cattle operations typically qualify as farming activities under IRS rules. This means you might be eligible for things like farm income averaging, which can help reduce your tax burden in profitable years. Even in loss years, farm activities have some specific rules that can be advantageous.

When I was in that situation, I entered the income and withholding from my previous job in the "already withheld" section. There should be fields for income already earned and tax already withheld this year. Then for your current job, you enter the expected income for the remainder of the year.

Thanks, that makes a lot of sense! I didn't notice that section on the calculator. I'll enter my previous job's details there and then just focus on projecting the new job's income for the rest of the year. Hopefully that gives me more accurate withholding recommendations.

Have you tried using tax software to do a mid-year projection instead? I use TurboTax and just input our estimated full-year numbers around June to see if we're on track. It seems more accurate than the IRS calculator for complex situations.

Can you explain what you mean about S-Corps and "reasonable compensation issues"? My construction business is an LLC but I elected S-Corp status for tax purposes and now I'm confused about how this would work.

With an S-Corp, you need to pay yourself a reasonable salary before taking distributions. If the LLC pays for your education, it could be considered either a business expense or potentially a fringe benefit to you as an employee-owner. If it's clearly related to your current business functions and helps you perform your job better, it can be treated as a normal business expense. However, if the education would qualify you for a new trade or significantly different position, the IRS might view it as a taxable fringe benefit to you personally, which complicates things from a tax perspective.

Is this still true? I thought they changed some of these rules with the Tax Cuts and Jobs Act in 2017? My accountant told me the rules got more flexible.

Is there a deadline to file if you're just trying to get a refund but aren't required to file? Like if I didn't file for 2022 but had withholding, can I still get that money back?

Yes, there's definitely a deadline. You have 3 years from the original due date to file a return and claim a refund. For 2022 returns (which were due April 18, 2023), you have until April 18, 2026 to file and claim any refund you're owed. If you miss that 3-year window, you lose the refund completely - the money becomes property of the U.S. Treasury. So if you had withholding for 2022, you should definitely file before April 2026 to get that money back.

The IRS Free File is actually really good for simple tax situations. If you made under $73,000, you can use it. I used it last year for my W-2 income and it was straightforward. Just go to IRS.gov and search "Free File." Don't go directly to TurboTax's website if you want the free version - go through the IRS Free File portal to make sure you actually get the completely free version. TurboTax's website often upsells you to paid versions even if you qualify for free filing.

I'm not sure a 1031 exchange would work in my situation. Don't those only apply when you're selling one investment property and buying another? I'm not selling my home, just temporarily renting it out. And I'm not buying the hotel, just staying there temporarily.

You're absolutely right, and I apologize for the confusion. A 1031 exchange wouldn't apply in your situation since you're not selling property. It requires a sale of one investment property and purchase of another "like-kind" property. What might be more applicable in your case is to carefully track all legitimate rental expenses to offset as much of the income as possible - property tax portions, insurance, maintenance, depreciation during the rental period, etc. Those are definitely deductible against your rental income.

Careful with that approach. The IRS can recharacterize arrangements if they appear to be structured mainly to avoid taxes. If the market rate is $2,000 but you charge $1,000 and call the rest a "gift," that could potentially raise flags.