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You absolutely made the right decision! Since H&R Block hasn't filed your return yet, you're completely free to back out without paying their fee. This is actually super common - people realize the cost isn't worth it for what's often pretty straightforward data entry. Here's what I'd do: call them today and simply say "I've decided to file my own taxes this year and won't be using your services." Don't let them pressure you with scare tactics about how "complex" your taxes are - that's just their sales pitch. Stay polite but firm. Also, definitely ask for copies of any information they've already entered during your appointment. Since it's your personal financial data, they should provide it to you, and it'll save you time when you're doing it yourself. The $270 you'll save can go toward something much more useful! Most tax software is under $100 and walks you through everything step by step. You'll probably be surprised at how manageable it actually is once you try it.
This is such solid advice! I've been in a similar situation and can confirm that backing out before filing is totally normal. The key thing is calling them TODAY like you mentioned - don't wait because they might try to do more work on your file which could complicate things. One thing I'd add is to maybe have a friend or family member with you when you call or visit to cancel, especially if you're worried about being pressured. Sometimes having moral support helps you stay firm when they start their "your taxes are too complicated" sales pitch. And honestly, once you do your taxes yourself once, you'll wonder why you ever paid someone hundreds of dollars for it. The software really has gotten incredibly user-friendly over the years!
You're definitely making the smart choice! Since H&R Block hasn't actually filed your return yet, you can absolutely cancel without paying their fee. This happens more often than you'd think - people realize they're about to pay hundreds for what's essentially data entry. Just call them directly and say "I've decided to file my own taxes this year." Don't feel like you need to justify or explain your decision. They'll probably try to convince you that your taxes are "too complicated" but that's just their standard sales approach. Stay polite but firm. One important thing - make sure to ask for copies of any worksheets or information they entered during your appointment. It's your personal financial data and you're entitled to it. This will save you time when you're entering everything into tax software yourself. $270 is a lot of money for most standard returns. You'll probably find that doing it yourself with good tax software is much more straightforward than they made it seem, and you'll save hundreds that can go toward something more valuable!
This is exactly right! I was in a very similar situation last year and was so nervous about canceling, but it turned out to be no big deal at all. The H&R Block office I went to was actually pretty understanding when I called to cancel - they just said "no problem" and that was it. One thing that really helped me feel confident about doing my own taxes was starting with the IRS Free File program first to see if I qualified. Even if you don't qualify for the completely free version, it gives you a good sense of how straightforward the process actually is. Then you can decide if you want to upgrade to paid software for extra features. The amount of money you save really does add up over time. I've been doing my own taxes for two years now and have saved over $500 compared to what I was paying before. That's real money that can go toward an emergency fund or paying down debt!
Does the 1065 instructions specifically address this situation? I'm looking at the 2023 instructions and I don't see clear guidance on partner-to-partner sales...
The 1065 instructions don't have explicit step-by-step guidance for this specific scenario. The general principles are covered in various sections (particularly around partner capital accounts and changes in partner interests), but you often need to refer to broader partnership tax principles and regulations. If you look at Treasury Regulation section 1.741-1, it clarifies that a sale of partnership interest between partners is treated as a sale of a capital asset, with the purchasing partners getting a cost basis in the acquired portion. The partnership itself is mostly just tracking and reporting the changes in ownership percentages and capital accounts.
One thing to keep in mind is the timing of when you recognize the ownership change during the year. You'll need to determine the exact date when the buyout was completed (when ownership officially transferred) to properly allocate the partnership's income, deductions, and credits. For the K-1s, use the "varying interest rule" under Section 706(d) to prorate each partner's share of items based on their ownership percentage during different periods of the year. So if the buyout happened mid-year, Partner D gets 25% allocation up to the buyout date, then 0% after. Partners A & B get 25% allocation before the buyout, then 37.5% after. Also make sure you update Schedule K-1, Part II (Partner's Share of Liabilities) to reflect the new ownership percentages. Partners A & B will need to pick up their additional share of partnership liabilities as part of their outside basis calculation, even though they paid cash for the interest. The partnership agreement should specify how these mid-year changes are handled - whether you use the closing-of-books method or proration method for allocating partnership items. This affects how precisely you need to calculate each partner's share.
This is really helpful detail about the timing aspects. I'm curious about the practical mechanics - when you say "exact date when ownership officially transferred," what documentation should I be looking for to establish this date? Is it when the purchase agreement was signed, when payment was made, or when the partnership agreement was amended to reflect the new ownership percentages? Also, regarding the varying interest rule - do you typically recommend the closing-of-books method or proration method for situations like this? I imagine the closing-of-books method would be more precise but also more complicated to implement.
Has anyone had issues with getting their 1099 from DoorDash? Last year they sent mine super late and it caused all kinds of problems with my filing.
Great question about DoorDash taxes! I've been doing gig work for a couple years now and can share what I've learned. You're absolutely right to set aside 25% - that's actually a smart conservative approach. The key thing to remember is that you'll pay both regular income tax AND self-employment tax (about 15.3%) on your DoorDash earnings, but the self-employment tax only applies to your net profit after deductions. Since you're already tracking mileage with Stride, you're doing the most important thing. That mileage deduction at 65.5 cents per mile will likely be your biggest tax saver. For someone doing DoorDash part-time, the standard mileage rate is almost always better than tracking actual car expenses. One tip I wish someone had told me earlier: you can also deduct things like insulated delivery bags, a phone mount for your car, and even a portion of your phone bill since you need it for the app. Keep receipts for everything! As for quarterly taxes, since you have a W-2 job, you might be able to just increase your withholding there instead of making separate quarterly payments. That's often easier than trying to calculate and send quarterly payments to the IRS. Good luck with saving for that engagement ring! DoorDash can definitely help build up some extra cash when you're strategic about the tax side.
This is really helpful advice! I'm actually in a similar situation - just started DoorDashing a few weeks ago and feeling overwhelmed by all the tax stuff. Quick question about the phone deduction - what percentage of your phone bill do you typically deduct? I use my phone for other things too obviously, so I'm not sure how to calculate what portion is "business use" for DoorDash.
I went through this exact process last year for my single-member LLC and can confirm that Form 2553 alone is sufficient. The IRS has specific guidance stating that for single-member LLCs electing S corp status, Form 2553 handles both the entity classification change AND the S corp election in one step. One thing I learned the hard way - make sure you understand the payroll requirements that kick in once your S corp election is effective. As an S corp, you'll need to pay yourself reasonable compensation through payroll (with all the associated payroll taxes) before taking any distributions. This was a surprise expense I hadn't budgeted for initially. Also, keep detailed records of when you filed Form 2553. The IRS doesn't always send a confirmation letter right away, so having your certified mail receipt or electronic filing confirmation is crucial if any questions come up later. The election becomes effective on the date you specify on the form (assuming it's filed timely), not when the IRS processes it.
This is super helpful! I hadn't considered the payroll requirements aspect at all. Do you happen to know what constitutes "reasonable compensation"? I've heard it should be comparable to what you'd pay someone else to do your job, but I'm wondering how the IRS actually determines if your salary is reasonable or not. Also, did you handle the payroll setup yourself or did you end up hiring a payroll service? I'm trying to budget for all the additional costs that come with S corp status.
Great question about reasonable compensation! The IRS doesn't give a specific formula, but they look at several factors: what you'd pay someone with similar skills and experience to do your job, your company's profitability, the time you spend working in the business, and compensation paid by comparable businesses in your area. A common rule of thumb is to pay yourself at least 60-70% of what the business profits, but it really depends on your industry and role. I ended up researching salary data on sites like Glassdoor and PayScale for similar positions in my area to justify my compensation level. I initially tried handling payroll myself using QuickBooks, but quickly realized the complexity of quarterly payroll tax filings, state requirements, and year-end forms (W-2s, 940, 941, etc.) was more than I wanted to deal with. Switched to Gusto after a few months - costs about $40/month plus $6 per employee (just me), but it handles all the tax filings automatically and provides good records for the IRS. The peace of mind was worth the cost, especially during my first year as an S corp when I was already learning so many new requirements. Budget-wise, expect to add payroll service costs, potential increases in accounting fees, and the employer portion of payroll taxes to your expenses. The tax savings can still make it worthwhile, but definitely factor in these additional costs when deciding if S corp election makes sense for your situation.
This is incredibly detailed - thank you! The 60-70% rule of thumb is really helpful as a starting point. I'm definitely leaning toward using a payroll service like Gusto from the beginning rather than trying to handle it myself. Between learning all the S corp requirements and running my actual business, I don't think I have bandwidth to also become a payroll expert! One follow-up question: did you find that your overall tax savings from S corp status outweighed these additional costs (payroll service, potential accounting fee increases, etc.)? I'm trying to run the numbers to see if it makes financial sense for my situation, but it's hard to estimate some of these ongoing expenses without having gone through it before.
Liam McGuire
I totally feel your pain on the constant refreshing! I went through the same thing last year and learned that most banks process IRS deposits during their overnight batch runs, typically between 12:01 AM and 6:00 AM. Once you see "approved" status on Where's My Refund, it usually means your deposit will hit within 1-3 business days. From my experience with Chase, my refunds have consistently appeared around 3:00 AM. The IRS sends the deposit instructions to banks the evening before, and then each bank processes them according to their own schedule during overnight hours. My advice: set up account alerts in your banking app so you get notified instantly when the deposit hits, then try to stop checking until morning. The obsessive refreshing doesn't make it come any faster (trust me, I tried!), but it definitely increases the anxiety. You're in the home stretch now - approved status is the best news you could get at this point!
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Liv Park
•This is exactly what I needed to hear! I've been driving myself crazy checking every few hours and you're absolutely right that it doesn't make it come any faster. Just set up those deposit alerts on my app - can't believe I never thought of that before. It's really reassuring to know that the 1-3 business days from approved status is pretty standard. I got my approved status yesterday afternoon so hopefully I'll wake up to good news in the next day or two. Thanks for sharing your Chase timeline too - it helps to have specific examples of when these typically hit. Time to put the phone down and try to be patient!
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Tami Morgan
I can totally relate to the refreshing obsession! I've been there multiple times and it's such an anxious feeling. From my experience over the past few years, the IRS typically sends direct deposit batches to banks overnight, and most deposits appear between 2:00 AM and 6:00 AM. Since you're showing "approved" status on Where's My Refund after 10 days of e-filing, you're actually in really good shape! That usually means your deposit is coming within 24-48 hours (business days). The IRS processes these in waves, so once you hit that approved status, you're basically in the final queue. My refunds with Navy Federal have consistently hit around 4:00 AM, but I've noticed it can vary by bank. Some of my friends with larger banks like Wells Fargo or BoA see theirs closer to midnight, while others with smaller credit unions get theirs later in the morning. Definitely set up those mobile alerts if you haven't already - it'll save your sanity and you'll know the instant it hits. The waiting is brutal but you're so close now! Try to avoid checking after 9 PM and just look first thing in the morning.
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Miguel Ramos
•Thanks for sharing your Navy Federal timeline! I'm with a smaller local credit union and I've been wondering if that would make a difference in processing times. It's really helpful to hear that the 2-6 AM window seems pretty consistent across different types of banks. I just hit approved status this morning so based on what you're saying, I might see it as early as tomorrow morning. The mobile alert setup was definitely the right move - already feel less anxious knowing I'll get notified instead of having to constantly check. Really appreciate the reassurance that 10 days to approved is good timing. This community is so helpful for navigating all this tax stress!
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