Has anyone used QuickBooks Self-Employed for tracking expenses and calculating quarterly taxes? I just started using it this year but I'm not sure if it's calculating things correctly for my LLC.

Great question, Omar! As others have mentioned, you'll definitely pay taxes on your net income (profit after expenses), not your gross revenue. This is one of the key benefits of proper business expense tracking. With your numbers ($73k revenue, $26k expenses so far), you're looking at around $47k in net profit before any additional purchases. That equipment you're considering ($1,800 laptop + $2,500 specialized equipment) could potentially save you around $1,300-$1,700 in taxes depending on your tax bracket, assuming you can deduct the full amounts under Section 179. One thing to keep in mind that others touched on - don't forget about self-employment tax! As an LLC taxed as a sole prop, you'll owe 15.3% SE tax on your net profit plus your regular income tax. So if you're in the 22% tax bracket, you're really looking at about 37.3% total tax on that profit. My advice: make those equipment purchases if you genuinely need them for your business, but don't buy stuff just for the tax deduction. A $4,300 purchase to save $1,500 in taxes still costs you $2,800 out of pocket. But if you need the equipment anyway, definitely buy it before December 31st!

Have any of you seen cases where a disregarded entity was incorrectly issued a 1099 under its own EIN rather than the parent's? We did this accidentally last year and now I'm worried about potential penalties or issues when the parent files their return.

This is a really common source of confusion, and you're absolutely right to question this practice. What your client is doing - mixing disregarded entity EINs with parent W-9s - creates unnecessary complications and doesn't align with IRS requirements. The key issue here is that a disregarded entity, by definition, is ignored for federal tax purposes. Even if the disregarded entity has its own EIN (which it might need for state taxes, employment taxes, or banking purposes), for federal information reporting like 1099s, you must use the parent/owner's EIN. Your client should provide clean W-9s with: - Line 1: Disregarded entity name - Line 2: Parent/owner name - Part I: Parent/owner's EIN If they need you to track payments separately by disregarded entity for their internal purposes, that's fine - but the 1099s should still be issued under the parent's EIN. You might want to explain that using the disregarded entity's EIN could create matching problems when the IRS tries to reconcile the 1099s with filed tax returns, since the disregarded entity doesn't file its own return. I'd recommend having them provide corrected W-9s that follow standard IRS guidelines to avoid any compliance issues down the road.

This is such a timely question! I went through an audit two years ago and can confirm that the IRS absolutely accepts both digital and physical receipts. What saved me was having everything organized beforehand. One thing I learned is that the IRS cares more about the completeness of information than the format. Every receipt needs to show: date of transaction, amount paid, description of goods/services, and vendor information. Whether it's a crumpled paper receipt or a PDF email confirmation doesn't matter as long as these details are clear. Regarding third-party verification - they didn't contact any of my vendors during my audit, but my tax preparer warned me that they could if they wanted to. It's more likely to happen with larger deductions or if something seems suspicious. For routine business expenses under a few hundred dollars, they typically just rely on your documentation. My advice: scan or photograph your physical receipts as soon as you get them (while they're still legible), and save digital receipts in a dedicated folder. The thermal paper that many receipts are printed on fades over time, so having a digital backup is crucial even for physical receipts.

This thread has been incredibly helpful! As someone who's been putting off organizing my tax records, I'm realizing I need to get serious about this before tax season hits. One question I haven't seen addressed yet - what about receipts from mobile payment apps like Venmo, PayPal, or Cash App? I use these for a lot of business expenses, especially when paying contractors or splitting costs with business partners. The transaction history shows the amount and date, but often doesn't have detailed descriptions of what was purchased. Should I be taking screenshots of these transactions and adding my own notes about what they were for? Or is the basic transaction record from the app sufficient as long as I can explain the business purpose? Also, for anyone who mentioned using receipt scanning apps - do you scan receipts immediately or do you have a system where you batch them weekly/monthly? I'm trying to figure out the most realistic approach that I'll actually stick to!

Just a warning from someone who's been there... document EVERYTHING no matter which way you go. My parents loaned me $15k a few years back, charged proper interest and everything, but we didn't create a formal loan document. When they got audited for something completely unrelated, the IRS questioned the loan and ended up treating it as a gift. Huge headache for everyone.

I went through something similar when helping my nephew with college expenses. One thing that really helped was creating a simple spreadsheet tracking all payments and ensuring we had clear documentation showing the funds came from different sources (my checking account vs. my spouse's savings account). Also worth noting - if your sister is going through a divorce, make sure the loan doesn't complicate her divorce proceedings. Sometimes large financial transactions during divorce can be scrutinized by the court or the ex-spouse's attorney. You might want to coordinate with her divorce lawyer to make sure the timing and structure won't cause issues. From a practical standpoint, I'd recommend having both loan agreements reference different purposes if possible (like one for living expenses, one for legal fees) to further distinguish them as separate transactions. And definitely keep records of how she uses the money - if she immediately deposits both loans into one account and uses them interchangeably, it could undermine the "separate loan" argument.

Another thing to consider: if your dad itemizes deductions, he may need to reduce the theft loss by 10% of his AGI and $100. But if he can claim it as an investment theft loss on Schedule A (instead of a capital loss), he won't be limited to the $3,000 annual deduction limit for capital losses.

Based on what everyone's shared here, it sounds like your dad has a solid case for claiming this as a theft loss. The key points I'm seeing are: 1. Make sure you have all the SEC documentation proving it was officially declared a Ponzi scheme 2. Use Form 4684 and possibly Form 8949 as mentioned by Ravi 3. The timing matters - claim it in the year the SEC declared it fraudulent, not when he invested 4. Revenue Procedure 2009-20 could be your best friend here - lets you deduct 95% of the loss right away Given that your dad is on a fixed income and this hit him so hard financially, I'd really recommend getting professional help to make sure you maximize the tax benefits. Whether that's a CPA experienced with investment fraud or one of those document analysis services people mentioned, the potential tax savings could be substantial. Also document EVERYTHING - bank statements, original investment paperwork, SEC filings, settlement details. The IRS will want a clear paper trail showing the original investment amount and what was recovered. Hope your dad can get some financial relief from this terrible situation!