The biggest thing to keep in mind is that the IRS has specific rules about when you can start claiming business expenses. Since your websites are offline and you're still in development mode, you're likely in what the IRS calls the "pre-opening" phase. For startup costs like yours, you generally can't deduct them until you actually begin business operations. However, once you do launch, you can elect to deduct up to $5,000 in startup costs in your first year of business (assuming your total startup costs don't exceed $50,000). My advice? Keep meticulous records of everything you're spending now - those receipts will be gold when you do launch. Consider getting an EIN from the IRS (it's free) and maybe register your business name if you haven't already. These steps help establish that you're serious about this being a business rather than a hobby. The silver lining is that when you do launch, you'll likely be able to claim most of those expenses right away rather than having to spread them over 15 years like some other startup costs.

I went through something similar with my e-commerce startup last year. The key distinction the IRS makes is between "investigatory costs" (researching whether to start a business) and actual "startup costs" (expenses to create the business). From what you've described - building websites, developing products - these sound like legitimate startup costs since you've clearly moved beyond just thinking about starting a business. The $650 you've spent should qualify for the startup cost election once you launch. One thing that helped me was creating a simple spreadsheet tracking not just the expenses, but also the business activities I was doing each month. This helped demonstrate to my tax preparer (and potentially the IRS) that I was actively working toward launching a real business, not just dabbling in a hobby. The fact that you're asking these questions and keeping receipts already puts you ahead of a lot of people! Just make sure when you do launch that you formally elect to deduct those startup costs on your first business tax return.

Just wanted to share my experience as someone who actually went through with the LLC transfer about 6 months ago. I have a 2023 Ford F-150 that I use about 80% for my construction business. The transfer process itself wasn't too bad - my lender (Wells Fargo) actually allowed it without triggering the due-on-sale clause, but I had to provide a lot of documentation about my LLC and get approval first. The insurance increase was real though - went from $180/month to $265/month for commercial coverage. Tax-wise, I can confirm what others have said - you still can only deduct the business percentage of use. The main benefit I've seen is cleaner bookkeeping since all car expenses flow through the business account, and my accountant says it might provide better liability protection if there's ever an accident during business use. But honestly, if I had to do it again, I'd probably keep it personal and just track mileage carefully. The extra insurance costs and paperwork hassle probably outweigh the minor benefits for most people. The tax deduction amount would be exactly the same either way.

Based on all the discussion here, I'm seeing a clear pattern that's making me reconsider my CPA's advice. It sounds like the main "benefits" of LLC ownership are largely psychological - cleaner bookkeeping and potential liability protection - but the practical downsides are very real and measurable. The insurance premium increases alone seem to wipe out any tax advantages, and that's before considering potential loan complications or transfer taxes. What really strikes me is that multiple people have confirmed you get the same business use deduction percentage either way. I think I'm going to stick with personal ownership and focus on bulletproof mileage documentation instead. My business is still pretty new, and adding unnecessary complexity right now doesn't seem worth the minimal benefits. Thanks everyone for sharing your real-world experiences - this has been way more helpful than the generic advice I've been finding elsewhere. Sometimes the simple approach really is the best approach!

Great question about the Rule of 55! I went through this exact situation two years ago when I left my job at 56. A few additional points that might help: First, make absolutely sure your plan allows in-service distributions after separation. Some plans require you to take a full lump sum, while others allow periodic withdrawals. Mine only allowed annual withdrawals, which affected my cash flow planning. Second, consider the tax implications carefully. Since you're planning $45k annually, you might want to spread larger withdrawals across December/January to manage which tax year they fall into, especially if you have other income sources. Also, document everything with your HR department before you leave. I wish I had gotten written confirmation of my separation date and eligibility - it would have saved me headaches later when filing taxes. One last tip: if your company offers a voluntary separation package, make sure the timing doesn't affect your Rule of 55 eligibility. Some packages technically keep you employed longer than you think. With $780k saved, you're in great shape for early retirement! Just make sure to have a solid plan for healthcare coverage - that was my biggest unexpected expense.

This is such valuable information! I'm actually in a similar situation - turning 55 next year and considering early retirement. One thing I want to add based on my research is about the timing of your separation. The key detail many people miss is that you must separate from service during or after the calendar year you turn 55. So if your birthday is in November 2025, you could technically leave in January 2025 and still qualify. But if you leave in December 2024 (before turning 55), you wouldn't qualify even though you're only a few weeks away from 55. Also, regarding your question about documentation from HR - while there's no specific IRS form required, I'd recommend getting a letter confirming your separation date and that it constitutes a complete termination of employment. This can be helpful if the IRS ever questions the distribution on your tax return. One more consideration: if your current employer allows it, you might want to look into whether you can roll any old 401(k)s into your current plan before you leave. This would make more of your retirement savings accessible under the Rule of 55, since it only applies to the plan you're separating from. Good luck with your early retirement planning - sounds like you're well prepared with that savings level!

This sounds incredibly frustrating! I had a very similar experience when my company switched payroll systems earlier this year. The jump from 12% to 18% federal withholding is definitely not normal and almost certainly indicates a data migration error. Based on what you've described and the great advice already shared here, I'd prioritize these steps: 1. **Verify your W-4 information immediately** - Log into the new system and check that your filing status, dependents, and any additional withholding amounts are correct. System migrations often reset these to default "single, no dependents" which would cause exactly the withholding increase you're seeing. 2. **Check your pay frequency** - If they switched from semi-monthly to bi-weekly (or vice versa), this affects how withholding is calculated even with the same annual salary. 3. **Document everything** - Take screenshots of both your old and new paystubs, especially the tax withholding sections. This will be crucial when you contact payroll. 4. **Contact payroll ASAP** - Don't let this drag on for multiple pay periods. The longer you wait, the more you'll overwithhold. Most payroll teams can fix W-4 data errors quickly and may be able to adjust future paychecks to account for the over-withholding. Given that you worked more hours but took home less money, this is definitely a system error that needs immediate attention. You shouldn't have to give the government an interest-free loan while your company figures out their new system!

This is definitely a payroll system migration issue, and you're right to be concerned about the significant jump in withholding! I've seen this happen countless times when companies switch systems. The most likely culprit is that your W-4 information didn't transfer correctly to the new system. During migrations, personal tax information often gets reset to default values - typically "Single" filing status with zero dependents, which would cause exactly the kind of withholding increase you're experiencing (from 12% to 18%). Here's what I'd do immediately: **Check Your W-4 Data**: Log into the new payroll app and verify your filing status, number of dependents, and any additional withholding amounts are correct. Even small changes here can cause dramatic differences in withholding. **Compare Pay Frequencies**: Make sure they didn't change from semi-monthly to bi-weekly or vice versa. This affects how the system calculates your annual income for withholding purposes. **Document Everything**: Take screenshots of both your old and new pay stubs, focusing on the tax withholding breakdown. You'll need this when you contact payroll. **Act Fast**: Don't wait for it to "sort itself out" - contact your payroll department immediately with your documentation. Most can fix W-4 errors quickly and may even adjust your next paycheck to account for the over-withholding. The good news is that this type of issue is usually resolved quickly once payroll knows about it. But the longer you wait, the more you'll be giving the government an interest-free loan until tax season!

Just be careful when adjusting your W4 this way. I did this last year expecting our baby in May, but then had complications and needed extended leave from work. My income ended up being lower than expected which threw off all my careful tax planning. Make sure you account for any unpaid leave you might take after the birth! If you're planning to take unpaid FMLA or other leave, your annual income will be lower than you might be calculating now.

Congratulations on the pregnancy! You're absolutely right that you can update your W4 in January for a baby expected in June. The IRS looks at your tax situation as of December 31st, so as long as your child is born in 2025, you'll qualify for the full child tax credit. One thing I'd suggest is using the IRS W4 calculator on their website to help you figure out the exact adjustment. It's free and walks you through all the scenarios. Just make sure to account for any unpaid parental leave you might take - that reduced income could affect your overall tax situation. Also, don't forget you'll need to get a Social Security number for your baby pretty quickly after birth to claim them on your taxes. The hospital usually provides the paperwork, but it can take a few weeks to process. Good luck with everything!