Just wanted to chime in as someone who made this exact purchase decision last year for my freelance business. I ended up going with a used Honda Civic (similar to your Corolla idea) and it's been perfect for client visits. A few things I learned that might help: 1. The 60% bonus depreciation for 2025 that Javier mentioned is correct - I made the mistake of using outdated info initially. 2. Keep your business use percentage realistic from the start. I initially estimated 85% business use but after tracking for 6 months, it was actually closer to 65%. The IRS looks closely at this, especially for sole proprietors. 3. If you're financing, make sure to keep all loan documents and payment records. The "placed in service" rule is great - you get the deduction when you start using it, not when it's paid off. 4. Consider the total cost of ownership, not just the tax benefits. My Civic has saved me hundreds in maintenance compared to what a larger vehicle would have cost, even if a heavier vehicle might have had better depreciation rules. One practical tip: I set up automatic mileage tracking from day one and it's been invaluable. Even with an app, I still keep a simple backup log in my glove compartment just in case. The tax benefits are nice, but having reliable transportation for your business is the real win here. Good luck with your decision!

As a CPA who specializes in small business tax issues, I want to emphasize a few key points that haven't been fully covered yet. First, make sure you understand the difference between the actual expense method and the standard mileage rate method for vehicle deductions. If you take bonus depreciation using the actual expense method, you're locked into that method for the life of the vehicle - you can't switch to the standard mileage rate later. For 2025, the standard mileage rate is 70 cents per mile for business use. For an $8,000 vehicle with realistic business use around 65-70%, you might want to run the numbers both ways before committing to depreciation. If you drive 15,000+ business miles per year, the standard mileage rate could actually give you a larger deduction over time. Second, don't forget about the recapture rules if you sell the vehicle. Any depreciation you've claimed gets "recaptured" as ordinary income when you sell, which could create an unexpected tax bill if the vehicle holds its value better than expected. Finally, make sure your business entity type supports these deductions. Sole proprietors, partnerships, and S-corps all have slightly different rules for vehicle depreciation and Section 179 elections. The consensus here about keeping good records and being conservative on business use percentage is spot-on. The IRS scrutinizes vehicle deductions more than almost any other business expense.

I've been using Direct Pay for my quarterly estimated taxes for the past year and a half, and it's been incredibly reliable. Like many others here, I was hesitant to switch from mailing checks after doing it that way for over a decade. What really convinced me was the immediate confirmation - no more lying awake wondering if my check would arrive on time or get lost in the mail. The system is actually quite user-friendly once you get through it the first time. You'll need your SSN, bank routing/account info, and details from your prior year tax return for identity verification. A few tips that have worked well for me: I always submit payments 2-3 days before the deadline (even though you get immediate confirmation, I like the buffer), screenshot the confirmation page AND save the email confirmation, and I've started keeping a simple digital folder with all my payment confirmations for easy reference at tax time. The security verification process using your prior year return information actually made me feel more confident about the system - it's not just basic info that could be easily obtained. And being on the official irs.gov site (not a third party) gave me additional peace of mind. Honestly, the convenience factor alone has been worth it - no more hunting for stamps, printing forms, or rushing to the post office. The time saved and stress eliminated from not worrying about mail delays has made me wonder why I waited so long to make the switch. I'd definitely recommend giving it a try for your next payment!

I've been using Direct Pay for about 6 months now and it's been seamless every time. Like you, I was a long-time paper check sender and was really nervous about making the switch. What finally pushed me over was missing a deadline by one day when my check got delayed during a postal service backup. The verification process is actually pretty reassuring - they ask for specific info from your prior year return that wouldn't be easy for someone else to obtain. I always submit my payments about a week early just to be safe, but honestly the immediate confirmation eliminates all that stress about whether it arrived on time. One thing that really helped my peace of mind was keeping detailed records - I screenshot the confirmation page, save the email they send, and keep everything in a dedicated folder on my computer. Makes tax time so much easier than hunting through old bank statements for cleared checks. The interface walks you through everything step by step, so it's not as intimidating as it seems. You'll need your SSN, bank info, and your prior year return handy for the first payment, but after that it remembers most of your details. Honestly, I wish I'd made the switch years ago. The convenience and immediate peace of mind has been a game changer. I'd say just try it once - you can always go back to checks if you don't like it, but I think you'll find it much less stressful than the mail system.

This is a great comprehensive discussion! I wanted to add one more important consideration that I learned from my own experience with a similar situation. When establishing the fair market value at the date of death, the IRS generally accepts the "alternate valuation date" option, which allows you to use the property value 6 months after the date of death instead of the actual date of death. This can be beneficial if property values declined after the death, as it could potentially give you a lower stepped-up basis and therefore lower capital gains when you sell. However, if you elect the alternate valuation date, you must use it for ALL assets in the estate, not just the properties. Also, I noticed several people mentioned getting appraisals done retroactively. While this works, it's worth noting that the IRS gives more weight to contemporaneous valuations. If your mother has any records like property tax assessments, insurance appraisals, or even real estate agent market analyses from around the time of death, these can be very helpful supporting documentation. One final tip: keep detailed records of any improvements or major repairs made to the properties during the joint ownership period. While regular maintenance doesn't increase basis, capital improvements do, and these can be added to your stepped-up basis calculation.

I wanted to share some additional insights from my recent experience helping my aunt navigate a similar situation after my uncle passed last year. One thing that really helped us was creating a comprehensive timeline of all property-related transactions and improvements from the date of purchase through the date of death. We discovered that the IRS Publication 551 (Basis of Assets) has some excellent worksheets that walk you through the step-up calculation step by step. It's particularly helpful for understanding how to handle things like closing costs from the original purchase, which can be added to your original basis. Also, if your mother is working with multiple tax preparers who are giving conflicting advice, I'd recommend asking each one to provide their reasoning in writing, including specific IRS code references. This helped us identify which preparer actually understood the nuances of spousal step-up rules versus those who were just guessing. One last tip: if the properties have appreciated as much as you mentioned, it might be worth consulting with an estate planning attorney in addition to a tax professional. They can help ensure your mother is taking advantage of all available strategies for minimizing the tax impact, especially if she's planning multiple large transactions (selling both properties and moving to assisted living). The fact that you're being so thorough in researching this shows you're on the right track. Your calculations sound reasonable based on what you've described, but getting professional confirmation with the specific property details will give you the confidence to move forward.

Anyone know if rental income qualifies for QBI? I have a small design business but also rent out a property, and I'm not sure if the rental income can be included in my QBI calculation.

I'm also a freelance graphic designer and went through this same confusion last year! TurboTax's calculation sounds correct based on your income level. At $78,500, you're well below the $170,050 threshold where the "specified service business" restrictions would kick in for single filers. The key thing to understand is that graphic design IS technically a specified service business, but those limitations only matter once you exceed the income thresholds. Below that threshold, you get the full 20% deduction regardless of your business type. I claimed my QBI deduction last year with similar income and had no issues. Just make sure you're reporting everything accurately on Schedule C and that your business expenses are properly documented. The $15,700 deduction (20% of $78,500) is exactly what I'd expect TurboTax to calculate for your situation. One tip: double-check that TurboTax is using your net profit from Schedule C (after business expenses) rather than your gross income for the QBI calculation. That's the most common mistake I see people make.

Has anyone had success with fixing this by switching to a different tax software? I'm having the exact same issue with [popular tax software] but wondering if [competitor] handles Form 8995 better?

I had the exact same problem with my S-corp QBI deduction last month! The issue turned out to be that my software wasn't properly handling the interaction between the SSTB phase-out and the taxable income limitation. Here's what I learned after digging deep into this: With $192k in business income, you're likely above the SSTB phase-out threshold ($196,950 for single filers). If your consulting business qualifies as an SSTB (which it probably does), the software should be phasing out your QBI deduction as your income approaches that threshold. The "incomplete calculation" you're seeing might actually be the software correctly applying a phase-out but not showing you the math. Try looking for a detailed Form 8995-A in your forms list instead of the simple 8995 - that's the form used when you're above the income thresholds or have SSTB income. Also, double-check that you've entered a reasonable salary for yourself as an S-corp owner. The IRS expects S-corp owners to pay themselves W-2 wages, and the QBI calculation depends on having actual W-2 wages reported, not just distributions.