Technically you can file as soon as the season opens IF you have all your documents. But employers aren't required to send W-2s until January 31st. So unless your employer sends them early, you'll need to wait. Don't file without all your documents! I made that mistake once and had to file an amendment, which was a huge pain.

Thanks for clarifying! I'll wait till I have everything then. Don't want to deal with amendments or worse, getting audited for missing information.

I filed early last year too and got my refund in 2 weeks with direct deposit. But I have a super simple return with just one W-2 and standard deduction. I think complexity matters more than when you file.

This is super helpful! I hadn't even thought ahead to resolution options yet. Any tips on documentation needed for the Offer in Compromise? I suspect my client will have significant tax debt once we figure out all the unfiled years.

For the OIC, you'll need comprehensive financial documentation - recent bank statements (3 months), pay stubs, vehicle registrations, property records, investment accounts, retirement accounts, credit card statements, loan statements, and monthly expense documentation. The IRS Form 433-A (individual) or 433-B (business) will be required. The key is accurately documenting your client's collection potential. This includes liquid assets, equity in property, and future income potential minus allowable expenses. If your client has few assets and limited income, that strengthens the OIC position. Make sure to fully document any hardship conditions or special circumstances that would justify accepting less than the full amount owed.

Streamlined procedures only apply to international situations with unreported foreign assets/income. If this is purely domestic, it wouldn't qualify. Regular voluntary disclosure through filing the required back returns is the way to go.

Does this step-up in basis apply even if the property is held in an LLC? My tax guy told me it might not work the same way.

The step-up in basis generally applies regardless of whether the property is in an LLC or not, as long as it's what's called a "disregarded entity" or a pass-through LLC for tax purposes. If you have a single-member LLC or a multi-member LLC that files as a partnership, the step-up should still apply. Where your tax guy might be cautious is if you have an LLC that's elected to be taxed as a corporation. In that case, the rules get more complicated and the step-up might not apply in the same way. The ownership is of the corporate shares, not directly of the real estate.

Wait but didn't you also make money on the property appreciation itself? Seems like you're only looking at one piece of the puzzle.

But doesn't this mess up your book value in Quickbooks for future years? If you don't depreciate it at all in Quickbooks, won't your financial statements show an asset that should be fully depreciated?

That's a really good point about the book value. In January of the following year (2023), after you've filed your taxes, you should go back to Quickbooks and add a manual depreciation entry that matches what you took on your tax return. This way, your financial statements will reflect the proper book value going forward. Think of it as keeping two separate depreciation tracks - tax depreciation (handled in TurboTax) and book depreciation (which you'll update in Quickbooks after filing). The key is to not have any depreciation in Quickbooks during the import process to avoid duplication.

Is there any chance Congress extends the 100% bonus depreciation? I've heard rumors they might keep it at 100% to help small businesses, but haven't seen anything official.

There's always a possibility that Congress could extend the 100% bonus depreciation, but I wouldn't count on it. While there have been some discussions about extending certain business tax benefits, nothing concrete has been proposed regarding bonus depreciation specifically. The phased reduction (100% to 80% to 60%, etc.) was built into the original Tax Cuts and Jobs Act legislation with the specific intent of gradually reducing the benefit. For planning purposes, it's safer to assume the reduction will continue as scheduled unless you hear official news about an extension. If you have planned asset purchases and can move them up to qualify for the higher percentage, that's the more conservative approach.

This is really helpful advice. Do you know if TurboTax can help me calculate how much I should be paying quarterly? Or should I just put aside 30% of everything I make to be safe?

TurboTax can give you estimated quarterly payment vouchers based on your previous year's income, but since your situation has changed, it might not be accurate. For simplicity, I'd recommend setting aside 30% of every payment you receive in a separate savings account dedicated to taxes. Then each quarter, calculate your actual tax obligation more precisely (or use a tax calculator online) and make your payment. Whatever is left in the account after your quarterlies can go toward retirement savings or other goals. This approach gives you a buffer and prevents nasty surprises.

This! I'm in California and they're even stricter about estimated payments than the feds. And their penalties are no joke either.