Wouldn't using an LLC mean losing the mortgage interest deduction? I thought you could only deduct mortgage interest on your primary residence if you personally own it, not if it's owned by an LLC?

You're right to question this - an LLC typically would cause you to lose the mortgage interest deduction for a personal residence. What we actually did was create a partnership agreement rather than a full LLC (I simplified in my original comment). The partnership agreement gives us similar protections in terms of clearly defining ownership and responsibilities, but allows the property to remain in our personal names for tax purposes. This way we each get to deduct our portion of the mortgage interest while having clear documentation of our arrangement. Tax rules around entity structures can get complicated, so definitely consult with a tax professional before going this route.

I don't think that's correct. The annual gift tax exclusion is $17,000 per person for 2023 (probably higher for 2025), and it's only an issue if you exceed that amount. Plus, you'd have to file a gift tax return but probably wouldn't owe any actual tax unless you've used up your lifetime exemption, which is over $12 million.

This is a really good point. My brother ignored the state notice after resolving the federal one and ended up with state penalties that were worse than the federal ones.

That's really helpful, thanks! If I tell them I'm waiting on more documentation, do you know approximately how much extra time they typically give?

In my experience, they usually give an additional 30 days if you ask for an extension and explain why. Be very specific about what documents you're waiting for and when you expect to receive them. I included a line in my response letter that said "I am awaiting final documentation from XYZ Casino which they have confirmed will be sent by [specific date]. I respectfully request an extension until [date + 1 week] to provide this final documentation." They approved my extension request without any issues. The key is being specific rather than vague about what you're waiting for and when it will arrive.

How much did TaxAct charge for each prior year? And did you have any issues with the 2017 filing from the accountant?

TaxAct charged around $60-70 per year for their business editions when I used them, though prices may have changed. I found it reasonable considering the alternatives. For the 2017 return, the accountant charged me $350, which was actually less than I expected. There weren't any issues with the filing itself, but they discovered I had been calculating depreciation incorrectly on some equipment, which affected the subsequent years. This meant I had to make some adjustments to my 2018-2020 returns as well. If you have depreciating assets, make sure you're tracking them consistently across all tax years - that's something the software won't necessarily flag for you.

UltraTax is professional-grade software used mostly by accounting firms, not really meant for individuals. For DIY, stick with TaxAct, TaxSlayer or H&R Block's prior year versions as others suggested. Much more user-friendly and way cheaper.

Can you explain more about the mega backdoor Roth through an S corp? My accountant mentioned this but didn't explain how it actually works with the S corp structure specifically.

Sure thing. The key is setting up your Solo 401k plan with the right provisions. Your plan needs to specifically allow for both after-tax contributions (beyond the normal $22,500 employee limit) and in-plan Roth conversions. With an S corp, you wear two hats - employee and employer. As employee, you contribute up to the standard limit ($22,500 for 2023, plus catch-up if over 50). As employer, your S corp can contribute up to 25% of your W-2 wages. Then, if your plan allows it, you can make additional after-tax contributions up to the total annual limit ($66,000 for 2023 combining all sources), then immediately convert those after-tax dollars to Roth. This gives you way more Roth conversion potential than just the standard backdoor Roth IRA.

Does your S corp pay for these directly, or do you pay personally and get reimbursed? I've heard conflicting advice on the best approach.

Thanks for the suggestion! I just dug up my final paystub and compared it to my W-2. The reimbursements don't appear to be included in my W-2 Box 1 amount, which I guess means they were handled correctly as non-taxable. That's a huge relief! Do you think I should still try to get some kind of documentation from the employer stating it was an Accountable Plan for my records? I'm always nervous about potential audits.

That's great news! If the reimbursements weren't included in your W-2 Box 1 wages, then your employer definitely treated them as non-taxable reimbursements under an Accountable Plan. While it's not strictly necessary, it never hurts to have additional documentation. If you can get a simple statement from your former employer confirming their reimbursement system meets the Accountable Plan requirements, it would be good to keep with your tax records. However, the fact that they didn't include these amounts in your taxable income already indicates they considered their plan to be an Accountable Plan. For extra peace of mind, keep any emails or documents you have related to their reimbursement policy, even if they're just instructions on how to use the system. These can help demonstrate the business purpose and accountability requirements if questions ever arise.

This is a really important point! When I worked as a healthcare contractor, my agency just lumped all my reimbursements into my 1099-NEC, which meant I had to pay taxes on them initially. I had to file Schedule C and deduct the business expenses myself. Cost me a bunch in self-employment taxes I shouldn't have had to pay.