Did you find the new accountant through a referral or did you just search online? I'm thinking I might need to do the same thing but I'm not sure how to find someone reliable.

I got a referral from a coworker who also does freelance work on the side. Personal referrals are definitely the way to go if possible since online reviews for tax professionals can be hard to trust. If you don't have any personal referrals, I'd recommend looking for an Enrolled Agent (EA) rather than just any tax preparer. They're specifically licensed by the IRS and tend to be more knowledgeable about tax code than the seasonal preparers at big chain tax services. Local small business associations sometimes have lists of reputable tax pros who work with self-employed individuals.

QBI is so confusing! My accountant says I don't qualify because my business is a "specified service business" (I'm a consultant) and my income is too high. Is there a simple way to know if I should be getting this?

22 Do credit card fees really add up to that much though? And even if they do, isn't it illegal to deduct those from reported contractor payments? I thought the 1099 was supposed to show the gross amount paid.

5 Credit card fees typically run 2-3%, so no, they wouldn't account for a $4,800 discrepancy unless your brother earned well over $150,000 from this one shop. You're absolutely right that the 1099-NEC should show the gross amount paid to the contractor before any fees. What sometimes happens (incorrectly) is that salon owners might deduct booth rental fees or product charges before calculating the 1099 amount. This is incorrect - those should be handled separately, and the 1099 should reflect the total payments made to the contractor.

1 Thank you all for the advice! I'm showing my brother this thread tonight. He does keep pretty good records with a booking app that tracks all his appointments and payments, plus he has his bank statements showing deposits. I think we'll start with a formal written request for a corrected 1099-NEC, and if that doesn't work, he'll report the full income anyway and keep all his documentation ready. And maybe check out some of these services you've all recommended to make sure he's handling everything correctly!

Thanks for the insider perspective! If I do decide to just prep this year's return, can I still benefit from their expertise without paying for the full package? I'm worried that if I don't get the multi-year review, I might miss something important from previous years.

You absolutely can benefit from their expertise on just this year's return. A good tax professional will naturally flag any concerning items they notice while preparing your current return, even without doing a formal review of previous years. If they spot something that looks like it might have been an issue in prior years, they'll mention it to you. Then you can decide whether it's worth paying for a more thorough review of those specific past returns. This more targeted approach often saves money while still addressing the most important issues.

I used H&R Block's premium service for a similar situation (RSUs and multiple states) and it was a disaster. They missed several deductions and didn't properly account for the double taxation issues between states. Had to file an amended return with a real CPA later. Would not recommend for truly complex situations.

Thanks for the cost breakdown! That's super helpful. Do most of these professionals offer free consultations? I'd like to chat with a few before deciding.

Most reputable tax professionals do offer free initial consultations, usually lasting 15-30 minutes. This gives you a chance to explain your situation and see if they're a good fit, while they can give you a more accurate price estimate based on your specific needs. When you schedule these consultations, come prepared with a list of questions about their experience with multi-state taxation and small business equipment deductions. Also ask about their communication style and availability throughout the year - you want someone who's accessible for questions, not just at tax time. The right professional should feel like a partner in your business, not just a once-a-year service.

I second this! I use FreshBooks for my small business and it makes everything so much cleaner. I upload receipts throughout the year and when tax time comes, I just export everything and send to my EA. She charges me less because the data is already organized.

This is a great point! I've always found the "don't give the government an interest-free loan" advice to be overblown. With today's savings account rates, the interest you'd earn on that money throughout the year is minimal compared to the stress of potentially owing at tax time. For most W-2 workers, a small refund is actually good peace of mind.

Exactly! I calculated it out and even with a $2,400 refund (which is what I typically get), at 4% interest I'm only "losing" about $50-60 over the course of a year. That's well worth the peace of mind of not having to worry about owing money. Plus, I've gotten much better at immediately putting my refund into my Roth IRA each year so it starts working for me right away rather than getting spent.

Is there an income threshold where this starts to happen? My partner and I both make around $85k and are thinking about getting married next year. Would we be affected by this?