9 Did you need a lawyer to set up your LLC? I've heard it can be expensive and complicated with annual fees. Is it really worth it for a smaller content creator account?

17 I didn't use a lawyer - I just went through my state's business filing website and did it myself. The filing fee was around $100 in my state, and yes, there are annual fees to maintain it (varies by state). Whether it's worth it depends on your situation. If you're making significant income or have privacy concerns, it can be valuable. For me, having business transactions under my LLC name rather than my personal name was important. Plus, it makes tax deductions cleaner since business expenses are clearly separated from personal ones. If you're just starting out with minimal earnings, maybe wait until your revenue justifies it.

2 Did you need to file any additional forms when you made the switch? I've heard some people say you need to do a "final" filing under your SSN before switching to the EIN, but that doesn't make sense to me since it's all just me either way.

Do you think it would be better to just take the whole cost as a business expense? Like can't I just say it's 100% for the dog sitting since that's what ruined it? The living room is where all the dogs hang out during the day.

I wouldn't recommend claiming 100% business use if you actually use it for personal purposes too. The IRS specifically looks for people trying to deduct personal expenses as business ones. If you're honestly using it almost entirely for the business, you might be able to justify a higher percentage like 90%, but you should be truthful about any personal use. Better to take a slightly smaller legitimate deduction than risk problems with an audit by overreaching.

That approach doesn't actually change the tax treatment. Whether you use a business account or personal funds later reimbursed, the deductibility still depends on the business use percentage. The IRS cares about the actual use of the item, not which account you used to buy it.

Oh man, another form I need to worry about? Is Form 5471 something I can handle myself or is this definitely something I should have my accountant prepare? And are there any specific schedules within Form 5471 that relate to Subpart F income reporting?

I strongly recommend having your accountant prepare Form 5471. It's one of the most complex IRS forms with multiple schedules and detailed reporting requirements. Schedule I specifically reports Subpart F income and is where you'll need to break down those passive investment earnings. Schedule J tracks your E&P balances which affect future distributions. And don't forget Schedule P for tracking previously taxed earnings. Even experienced accountants sometimes struggle with this form, so it's definitely not something I'd suggest handling yourself, especially with the significant penalties for errors or omissions.

Does making a 962 election make sense if most of the foreign income is already NOT Subpart F (like the consulting income mentioned)? Seems like it might create more complications than benefits in that case.

How would I know if the basis wasn't reported? Is there something specific to look for on the form? Because I think this might be exactly my issue.

Look at your 1099-B form from your brokerage - there should be a column that indicates whether the cost basis was reported to the IRS. Sometimes there's a checkbox, other times it might say "Covered" versus "Noncovered" transactions, or it might explicitly state "Cost basis not reported to IRS" for certain transactions. Noncovered securities (typically those acquired before certain dates or transferred from other brokerages) don't have their cost basis automatically reported to the IRS, so the IRS only sees the sale proceeds. In those cases, they might assume your entire proceeds are gains unless you properly report the cost basis on Form 8949.

Will the IRS just cancel the debt if I can show the broker's forms match what I reported? Or will I need to prove something more?

Would it also be smart for OP to get something in writing from the relatives stating it's a gift with no strings attached? Or would that actually look worse to the IRS since it shows they discussed the tax implications?

That's a thoughtful question. I don't think a formal gift letter is necessary for smaller amounts like this, and you're right that it might actually draw more attention to the arrangement. For larger gifts (especially those approaching the annual gift tax exclusion amount), having a simple gift letter is common practice and wouldn't raise eyebrows. But for a $375 gift, normal documentation like a check or bank transfer record showing it came from the relatives to you personally should be sufficient. The key is making sure there's nothing in writing that indicates a requirement to donate the money.

I used FreeTaxUSA and they handled this fine too. They specifically had a help article about this exact scenario that explained it's legitimate as long as you have full control of the money before donating it. Definitely cheaper than TaxAct or TurboTax if you're looking to save some money.