Has anyone noticed that FreeTaxUSA seems to have more of these weird rejection issues compared to other tax software? I've used them for 3 years and had some kind of strange issue every time, but my friends who use TurboTax never seem to have these problems.

I went through something very similar last year! The "already filed" rejection when nothing was actually filed is super frustrating. Here's what worked for me: First, don't panic about the fraud alert - like others mentioned, this often happens when you start returns with multiple tax services. Even though you deleted your H&R Block account, their system likely created a temporary filing record. Since you've already confirmed with the IRS that nothing is actually filed under your name, you have a few options to avoid the 6-8 week mail processing delay: 1. Try a completely different tax software (TurboTax, TaxSlayer, etc.) - sometimes the rejection is specific to how FreeTaxUSA communicates with the IRS system 2. Call the IRS e-file support line (different from the main number) and ask them to clear any pending filing status records under your SSN 3. Contact FreeTaxUSA support again and specifically ask for a "tier 2" agent who handles e-file rejections - they may have additional options The good news is that you're definitely still getting your refund! It's just a matter of getting the e-file system to accept your return. I ended up switching to a different tax service and was able to e-file successfully, getting my refund in about 2 weeks instead of waiting months for a mailed return.

Just a quick accounting perspective - when you're recording those free assets, make sure you're following proper accounting principles. The journal entry should be: Dr. Fixed Assets (various) $65,000 Cr. Additional Paid-in Capital $65,000 And for the inventory purchased with the loan: Dr. Inventory $275,000 Cr. Due to Shareholder $275,000 This keeps the loan and the contributed assets separate, which will be important for tracking purposes. When you convert to S-Corp, having clean books will make the transition much smoother.

Great question about the accounting entries! For basic bookkeeping purposes, those journal entries are correct and sufficient to get you started. However, you're absolutely right that tracking book-tax differences properly can get more complex. Many small businesses use what's called a "tax provision worksheet" or maintain separate depreciation schedules rather than cluttering up their general ledger with contra accounts. The key is to have a system that lets you easily calculate your tax depreciation vs book depreciation each year. For your situation with the zero-basis assets, I'd recommend setting up a simple spreadsheet that tracks: - Book value and depreciation schedule - Tax basis (zero) and depreciation (none allowed) - Annual book-to-tax adjustment needed This approach keeps your books clean while ensuring you can properly prepare your tax returns. When you convert to S-Corp, your accountant will appreciate having this information organized and readily available. The journal entries Jamal suggested will handle 95% of what you need for day-to-day operations. The more complex tracking can happen outside your main accounting system.

This thread has been incredibly helpful! I'm a small business owner who's been considering acquiring a competitor, and reading through everyone's experiences has given me a much better understanding of what to expect tax-wise. A few key takeaways I'm noting for my own situation: - The 15-year amortization requirement for goodwill/customer lists with no acceleration options - Importance of clearly allocating purchase price in the agreement (goodwill vs non-compete vs other assets) - State tax implications may differ from federal - Integration costs might be immediately deductible vs part of the asset purchase - Need for excellent documentation throughout the process One question I haven't seen addressed - if you're buying a competitor's business but they're staying in a related field (like moving from lawn care to landscaping), how does that affect the non-compete valuation and tax treatment? I'm wondering if the IRS has specific guidelines for partial non-compete situations. Thanks to everyone who shared their real-world experiences. This kind of practical advice is invaluable for those of us navigating business acquisitions for the first time!

This is such a comprehensive thread! As someone who went through a similar acquisition in the restaurant industry last year, I can confirm most of what's been discussed here is spot-on. One additional consideration for Andre - since you mentioned this was essentially buying a client list, make sure you have documentation showing the historical revenue generated by those specific clients. The IRS may want to see that there's actual economic substance behind the $27k valuation, especially if you ever face an audit. In my case, I had to provide customer retention rates, average revenue per customer, and projected future cash flows to justify the purchase price allocation. It was extra paperwork, but having that documentation gave me confidence that my amortization schedule would hold up under scrutiny. Also, consider whether any of those client contracts have termination clauses or are month-to-month. If clients can leave without notice, that might affect how the IRS views the durability of what you purchased, which could impact the valuation discussion with your tax professional. Best of luck with your expanded business - acquiring established client relationships is often one of the smartest investments a small business owner can make!

Has anyone else noticed that the 1098T is often wrong for international students? My university messed up mine last year and included my TA stipend as a "scholarship" even though it was actually employment income reported on a W-2. Double check everything on your form!

I went through something very similar my first year as an international student! One thing that really helped me was creating a detailed spreadsheet tracking ALL my educational expenses - not just tuition. Things like mandatory student fees, required textbooks, lab equipment, and even technology fees can count as qualified educational expenses to offset that scholarship income. Also, definitely document your sponsor arrangement properly. Since you're repaying them the exact amount, this sounds more like an interest-free loan than a scholarship. If you can get something in writing from your sponsor confirming this is a repayment arrangement (even a simple letter), it could change your tax situation significantly. The university might have incorrectly categorized this on your 1098T. One last tip - make sure you're checking if your home country has a tax treaty with the US that might provide benefits for scholarship income. Many international students miss this and end up overpaying. Good luck with your filing!

Could also be worth asking if she's part of a larger firm with specific policies or if she's independent. Different firms have different document retention policies. I've worked with H&R Block before and they never asked for copies of my SSN card, just needed to see it once to verify.

I'm a CPA and I can confirm that requesting copies of SSN cards is NOT standard practice in our industry. We need your SSN to prepare your return, but we don't need physical copies of the cards themselves. The IRS Due Diligence requirements for tax preparers focus on verifying identity through government-issued photo ID (like driver's license) and ensuring the SSN matches the taxpayer, but keeping copies of SSN cards isn't part of these requirements. Her explanation about "security issues" doesn't make sense from a professional standpoint. If someone tries to fraudulently use your SSN, having a copy of your card won't help prevent or resolve that situation. What WOULD help is proper data security practices on her end - encrypted storage, secure client portals, and following IRS Publication 4557 guidelines for data protection. I'd recommend asking her to provide written documentation of her firm's document retention policy and why specifically she needs copies rather than just verification. A legitimate tax professional should be able to explain their practices clearly and provide documentation of their security protocols.