But wouldn't waiting to submit the 433-A just delay the whole process more? My revenue officer keeps pressuring me to submit mine ASAP and I'm in a similar situation with wanting to consolidate vehicles.

If your revenue officer is already involved and pressuring you for the 433-A, communication becomes key. I'd recommend being upfront with them about your vehicle plans before making any changes. Explain that you're planning to consolidate vehicles to reduce overall expenses and improve reliability, not to hide assets. In my experience, most ROs appreciate transparency and would rather you be honest about upcoming changes than submit information that will be immediately outdated. You could even ask if they prefer you to submit the 433-A with current information and an addendum explaining the planned vehicle changes, or if they'd prefer you complete the transactions first. This proactive approach usually works better than trying to time things without their knowledge.

Yes, I actually did this successfully. The key was showing that the monthly expenses for the 2 newer vehicles were actually LOWER than maintaining the 4 older ones (repair costs, insurance, etc). I provided 2 years of maintenance receipts for the old cars to prove they were money pits.

What about shared resources like washing equipment, reception area, etc.? Does that muddy the waters at all? Our salon has these common areas that everyone uses.

Shared resources are perfectly fine and actually very common in these arrangements. Think of it like renting an apartment that includes shared laundry facilities or a common lobby. The rental agreement should specify what shared resources are included in the rent payment. As long as those common areas are available to all renters without the owner controlling when or how they're used, it doesn't impact independence. Just make sure the agreement clearly separates the rental payment from any control over how you conduct your business.

Thanks for sharing your experience. I didn't even think about checking state-specific regulations. I'll definitely look into that. Did your salon owner do anything special with the rental agreements or business structure after going through that lawsuit?

After the lawsuit scare, our owner got much more formal with everything. She had a lawyer create a standardized booth rental agreement that explicitly stated we were not employees and had no expectation of benefits or protection under employment laws. She also required all of us to provide proof of our business registration and insurance policies annually. One smart thing she did was create a separate LLC that owned the building, and then her grooming business just rented space there like the rest of us. That extra layer of separation made it super clear that the relationship was landlord/tenant rather than employer/worker. The owner also stopped providing any supplies at all - even things like shampoo and cleaning products had to be purchased individually or through a cost-sharing agreement between groomers. It was slightly less convenient but much cleaner from a business separation standpoint.

Does anyone know if you can deduct mileage when you're carrying passengers (like other band members) to gigs? We usually carpool in my van since I'm the one with all the gear space, but I wasn't sure if having others with me affects the deduction.

Yes, you can absolutely deduct business mileage even when carpooling with band members! The key is that the primary purpose of the trip must be business-related, which going to a paid gig certainly is. Having passengers doesn't reduce or eliminate your deduction. In fact, if you're the designated driver for your band and regularly transport equipment and band members, make sure you're also tracking any parking fees and tolls, as these are deductible in addition to your mileage. Just keep good records of dates, locations, and the business purpose of each trip.

I've done this with my $9000 cello. My accountant recommended depreciation rather than Section 179 since I use it for both W-2 and 1099 work. We calculated that I use it about 65% for self-employed gigs and teaching, so I'm depreciating that portion over 7 years. Makes my tax situation more stable than taking one huge deduction in a single year.

We did file our returns, just haven't been able to pay what we owe. But that's good advice for anyone reading who might be afraid to file! Does anyone know if we should adjust our W-4 withholding for this year to prevent owing more next year?

Yes, absolutely adjust your W-4 forms with both of your employers immediately! If you've been underwithholding for 2 years, you're likely still underwithholding now, which means you're digging a deeper hole. You can use the IRS Tax Withholding Estimator on their website to figure out exactly how to fill out your W-4. Also, when you get on a payment plan for your back taxes, make sure you don't miss any payments and that you stay current on this year's taxes. The IRS will cancel your payment arrangement if you fall behind on current taxes or miss payments on your plan.

DON'T DO IT!! Those companies charge thousands of dollars for services you can do yourself for free or at low cost. I paid $3,000 to one of those places and all they did was put me on an installment plan I could have set up myself online. Total ripoff!

Wait this is amazing! We definitely qualify based on those requirements. Does this mean we could potentially reduce our payroll tax burden instead of waiting until we're profitable to use the credits? Our payroll taxes are a huge expense right now.

Yes, that's exactly what it means! Instead of the R&D credit just carrying forward until you have income tax liability, you can use up to $250,000 of it immediately against the employer portion of Social Security taxes (the 6.2% you pay on employee wages). This is particularly valuable for startups and small businesses that are still in growth mode and not yet profitable. You'll claim the credit quarterly when you file your Form 941 payroll tax returns. The election has to be made on a timely filed tax return (including extensions), so make sure your tax preparer knows you want to make this election when they prepare your business return.

This is super important. We got audited last year and the IRS disallowed almost half our claimed R&D expenses because our documentation wasn't specific enough about the technological uncertainties we were trying to resolve. Make sure you have detailed lab notes, design documents, and meeting minutes that clearly show the experimentation process.