Do you think the CPA could get in trouble if OP reports him to the state board? My tax guy messed up some stuff too and I'm wondering if I should report him.

Yes, CPAs are licensed professionals who can face disciplinary action from their state boards for substandard work. The severity depends on whether this was a simple mistake or represents a pattern of incompetence. Before formal reporting, I'd recommend clearly documenting the errors in writing and giving the CPA an opportunity to correct the issues or adjust their fee. Most licensing boards want to see that you attempted to resolve the issue directly first. If they're dismissive or refuse to acknowledge clear errors (like taxing unrealized gains), then reporting becomes more appropriate. Make sure you keep copies of all communications and the incorrect tax documents to support your complaint.

I tried a couple different options but ended up using Koinly for tracking all the transactions and calculating the gains/losses. It was pretty intuitive for importing from different exchanges. Then I just took those totals and put them into FreeTaxUSA for the actual filing. The whole process was definitely time-consuming upfront but now that I understand it, next year should be much easier. I also created a detailed spreadsheet where I documented everything so I have backup records. The most annoying part was figuring out the staking rewards since they count as income at the fair market value when received. The tax software I used makes it pretty clear where to report everything.

This is really interesting! Do you know if he does these showcase projects in his own home or just for select customers? And does he still write off the full cost or just a portion?

He typically does these for customers, not in his own home. The key is that there's a clear business purpose that's documented - he has customers sign a marketing release allowing him to photograph, film and show the project to potential clients. He even hosts small open houses where prospective clients can see the finished work. His accountant categorizes these as marketing expenses, but only the portion that's discounted. So if a $10,000 job is done for $6,000, he can write off $4,000 as a marketing expense. He's very careful to document everything and has a written business policy about these showcase projects. I still think your own home would be much trickier to justify, but talking to a tax pro about a formal "demonstration project" policy might be worth exploring.

The mileage tracking is so crucial. I neglected this my first year and probably lost thousands in deductions. Do you know what the rate per mile is for 2025? And does MileIQ work automatically or do you have to remember to turn it on?

That's actually really good advice and something I've been considering. Did you have trouble separating your finances from the joint account holder? I'm worried that if I pull my money out suddenly it might look suspicious for tax purposes.

When I separated my finances from my dad's joint account, I opened a new account first, then gradually moved over my direct deposits and auto-payments over a period of about a month. That way there wasn't a sudden large withdrawal that could raise flags. I also kept really clear records of which money was mine versus his in the joint account, and made sure I only took my portion. For your situation, since the deposit is clearly your mom's settlement, you should have no problem leaving that untouched while taking your pre-existing balance.

This is the right answer! Keep the money separate from the beginning. My parents did this with some inheritance money and it made everything so much cleaner for taxes. Just make sure both names are on the new account.

But if you warn them, won't they just hide the evidence better? I had a former friend who was doing something similar and when someone in our group warned him, he just got more sophisticated about hiding it. Sometimes people need to learn consequences the hard way.

That's a fair concern. If someone is determined to commit fraud, a warning might just make them better at concealing it. However, sometimes people genuinely don't realize the severity of what they're doing - they might see it as "bending the rules" rather than committing a federal offense. If you think your cousin might be receptive, a gentle approach might work: "Hey, I'm concerned about what you told me about your taxes. Those penalties can be really serious." But if they've shown they don't care about the rules or might become defensive, then you're right that a direct confrontation might not help the situation.

Is there any way to find out what happened after you submit a tip? Like do they tell you if they investigated or collected more tax? I reported an employer a few years ago who was paying people under the table but never heard anything about what happened.

Is there any simple way to handle this retroactively? We're in a similar situation where one partner did 80% of the work this year but we have a 50/50 split. Tax filing deadline is approaching fast.

Unfortunately, retroactive special allocations are problematic. The IRS generally requires that allocations be established in advance of the economic activity. Making changes after the fact often raises red flags. Your best option at this point might be to ensure your operating agreement is updated for future projects, while accepting the default 50/50 allocation for the current tax year. Another possibility, depending on your specific situation, is to consider guaranteed payments to the partner who did more work - this is essentially a payment before profits are calculated. However, this has different tax implications and should be discussed with your tax professional before implementation.

I did it last year with my 2-person LLC. We used a template from our legal service subscription and then had it reviewed by our accountant (much cheaper than having them draft it from scratch). The key elements were: 1) Special allocation provisions that meet the substantial economic effect test 2) Clear tracking of capital accounts 3) Language about how profits from specific projects can be allocated differently Cost us about $400 total for the review and filing the amendment. You definitely don't need to pay $1,500 unless your situation is extremely complex.