Have you had any issues with Wave at tax time? I tried it last year and my accountant complained that the reports weren't detailed enough for some of the deductions we wanted to take. Did you add any paid features to make it work better?

I did have some limitations with Wave during my first tax season, particularly around categorizing certain business expenses properly. I ended up using their paid receipt scanning feature ($8/month) which helped tremendously with organization and made my accountant much happier. For detailed job costing and tracking profitability by service type, Wave definitely has limitations. I supplement with a simple spreadsheet for that analysis. The payroll integration with OnPay has been flawless though - all my quarterly filings have gone through without issues and the reports are accepted by my accountant without complaints.

I switched from QuickBooks to Xero last year for my pool service company (5 employees) and it's been excellent. The inventory tracking is better for tracking chemicals and supplies, and the mobile app is way more user-friendly for entering expenses on the go. Their project tracking feature works well for tracking costs by customer property too.

Thanks for sharing your experience! That's helpful to know about the mobile app and project tracking - both would be really useful for my lawn care business. How was the transition from QuickBooks? Did you lose any historical data in the switch?

Oh wow, I hadn't even considered local taxes! I know I'll be working in Chicago for about a month - does anyone know if they have special local tax requirements? This is getting more complicated than I expected.

Chicago doesn't have a city income tax like some other major cities, so you're safe there. You'll just need to deal with Illinois state income tax for the period you're working in Chicago. However, if your contract takes you to New York City, Philadelphia, San Francisco, or certain cities in Ohio or Michigan (among others), you'll need to account for local income taxes as well. It's definitely worth researching each location before you go. Some cities have very low thresholds - Philadelphia, for instance, starts taxing non-residents from day one of working there.

The fees vary wildly by state. When I registered my LLC in Nevada, Colorado and Texas last year, the initial registration fees were around $150-200 per state. But then many states also have annual report fees or franchise taxes. California is notoriously expensive with their $800 minimum franchise tax regardless of whether you make any money there.

Thanks for the insight! So just to be clear, since the GoFundMe was specifically to help with flood damage repairs and donors didn't get anything in return, I probably don't need to report it as income? Do I need to keep any specific documentation besides the withdrawal statements from my bank?

That's correct - funds received as gifts to help with your personal hardship (like flood damage) with no goods or services provided to donors would generally be considered non-taxable gifts. The IRS doesn't require you to report gifts you receive on your tax return. I would recommend keeping documentation that clearly shows the purpose of the GoFundMe campaign (screenshots of the campaign page would be ideal), records of the deposits to your bank account, and documentation of how you used the funds for flood repairs (receipts, invoices, etc.). While this might seem excessive, having this documentation will make things much easier if questions ever arise.

Actually the $600 threshold has been delayed AGAIN for 2023 tax year too! They're still using the $20,000/200 transactions threshold. The $600 threshold keeps getting pushed back because of all the confusion it would cause.

Thanks for this tip. I just checked the IRS website and there's definitely no record of my 2022 return. I didn't know I needed to specifically check the IRS site after filing through TaxAct - I thought the "completed" status meant everything was done. Do you know if TaxAct has any responsibility here since their interface was misleading?

Unfortunately, if you read the fine print in TaxAct's terms of service, they probably have language that places the responsibility on you to verify successful transmission. Most tax software companies include clauses stating they're not liable for transmission failures or penalties. You might still have recourse though. Check if your TaxAct account shows any specific error codes related to your 2022 return. Sometimes there are failed submission codes that can help prove you attempted to file but their system had an issue. Also, print out your complete 2022 return from TaxAct to show it was completed on time, which will help with your penalty abatement request to the IRS.

Did the Taxpayer Advocate actually answer the phone when your sister called? I've tried calling them multiple times and always get a message saying they're too busy and to call back another time.

My friend tried to catch up on his taxes and ended up owing way more in penalties than actual taxes. Is there any way to avoid that or at least reduce those penalties?

How do you get your IRS transcripts? Do you have to call them or can you get them online?