The guy is just some local tax preparer - not a CPA or EA as far as I know. He was recommended by a friend who said he "gets great refunds for everyone." Should have been a red flag right there! Do I still use those same forms to report him even if he's not credentialed?

Yes, absolutely use those same forms even though he's not credentialed. The IRS needs to know about all tax preparers who engage in misconduct, regardless of their credentials. Form 14157 is specifically designed to report any tax preparer who violates tax laws or engages in unethical practices. The fact he's known for "getting great refunds for everyone" is definitely concerning and suggests a pattern of improper deductions. Make sure you mention that in your report, as it indicates this may not be an isolated incident. The IRS may look into his other clients' returns if they suspect a pattern of fraudulent activity.

Wait the IRS actually called your brother? I thought they only communicate through mail. Was it legit? I always heard to be super careful about scam calls claiming to be the IRS.

One of my kids did work a summer job and made about $3,800 last year. How would that change things? Should they file their own return? Would I still claim them as a dependent?

Yes, your child should definitely file their own return for that summer job income. The good news is that you can still claim them as a dependent on your return as long as you provided more than half of their support for the year and they meet the other dependent tests. When they file their own return, they'll check the box indicating "Someone can claim you as a dependent." This is actually beneficial because while you still get whatever dependent benefits you qualify for, they may get some of their withholding back if too much was taken from their paychecks. It's not a major tax strategy that will eliminate your $2500 liability, but every bit helps, and it's teaching them about tax responsibility too.

With mortgage interest of $9,200 and property taxes of $4,500, you're at $13,700 just from those two items. Add in state income taxes (up to the SALT limit) and any charitable contributions, and you might exceed the standard deduction ($13,850 for single filers, $20,800 for head of household in 2023). Run the numbers both ways to see which gives you the better result. But remember, even if itemizing only saves you a few hundred dollars over the standard deduction, that's still money in your pocket.

I managed to get through last month but only by calling at exactly 7:00 AM Eastern when they first open. Even then I waited for 1.5 hours on hold. Tuesdays and Thursdays seem to be slightly better than Mondays from my experience.

Thanks for the tip. I'll try calling right when they open on Thursday. Did you end up resolving your issue when you finally got through? I'm still debating whether it's worth the hassle for a small amount or if I should just pay it.

What about things like beauty treatments, fitness expenses, etc for adult content creators? Are those considered legitimate business expenses? My friend says she deducts her hair salon visits but that seems risky.

For beauty treatments, fitness expenses, etc., it really depends on whether they're "ordinary and necessary" for your business. This is somewhat of a gray area and varies by individual circumstances. Hair styling specifically for photo/video shoots can often qualify, but regular maintenance haircuts typically don't. The key is whether these expenses are directly tied to your business rather than personal care. For example, if you're marketing yourself as a fitness model and your workouts are specifically to maintain that brand image, you might have a case for deducting some gym expenses. However, you should maintain very good documentation and consider consulting with a tax professional who specializes in entertainment/performance professions, as these deductions can be audit triggers if not properly substantiated.

I was audited last year after 3 years of content creation. The key was having detailed records of EVERYTHING - all income, all expenses with receipts, dates, descriptions. I used a separate bank account and credit card for all business transactions which helped tremendously. The IRS didn't care about the nature of my work AT ALL. They just wanted to verify my income reporting and expense documentation. Having a mileage log for travel to shoots and a dedicated space for my home office deduction was super important. The audit was stressful but I came through fine because my documentation was solid.

That spreadsheet approach sounds really helpful! Do you have any template or example you could share? Also, does your spreadsheet account for the half-year convention that applies in the first year for most MACRS assets?

I don't have a shareable template, but I can describe how I set it up. I created columns for: Asset Description, Date Acquired, Cost Basis, Recovery Period, and then a row for each year of depreciation showing the percentage and calculated amount. Yes, my spreadsheet definitely accounts for the half-year convention! That's one of the most important aspects of MACRS. For 7-year property, I use the standard MACRS percentages: 14.29% in year 1 (reflecting half-year convention), 24.49% in year 2, 17.49% in year 3, and so on. The spreadsheet automatically applies these percentages to the basis amount.

This is only partially correct. The 50% rule doesn't automatically force you to use ADS. It limits your Section 179 expensing, but you can still use regular MACRS for depreciation. The actual rule is that if business use drops BELOW 50%, then you must switch to ADS.