Can I take standard deduction personally while doing itemized deductions for my single-member LLC? Or are they treated as one entity?

So if I understand correctly, business expenses go on Schedule C to reduce business income, and then AFTER that, I choose standard vs itemized for personal? What if some expenses could be either business or personal? Like if I have a home office, do I put that on Schedule C or would that be an itemized personal deduction?

The business expenses go on Schedule C, which reduces your overall business income before it becomes part of your personal income. Then yes, after that, you decide whether to take the standard deduction or itemize for personal expenses. For expenses that could be either business or personal, the key question is: "Is this primarily for business purposes?" For a home office, if you have a dedicated space used regularly and exclusively for business, that's a legitimate business expense that goes on Schedule C. You'd use Form 8829 to calculate the business portion of your home expenses. It's not part of personal itemized deductions at all - it's a business expense that reduces your Schedule C income.

Does it handle self-employed retirement plan contributions too? Like SEP IRA or Solo 401k? That's where I always get confused on whether they're business or personal deductions.

I'm always skeptical about these tax tools. How does it compare to just using QuickBooks Self-Employed or TurboTax? Does it actually save you money or just time?

It does handle retirement contributions! That was actually one of the most helpful parts for me. It showed me how to maximize my SEP IRA contribution based on my LLC income and explained exactly where each deduction would go on my return. As for how it compares to QuickBooks or TurboTax, I still use TurboTax to file, but taxr.ai is much better at analyzing all my documents upfront and explaining what qualifies as what. It saved me both time and money because it found several legitimate deductions I would have missed. It's more like having a tax pro look over everything before you enter it into your tax software.

Wait, how does this actually work? Does it just dial for you or something? I'm confused how a service can get you through the IRS phone tree faster than doing it yourself.

Yeah right. Nothing can get through to the IRS these days. I've been trying since October to resolve an issue with my business taxes. If this actually works I'll eat my hat.

It doesn't just dial for you - it uses a system that continually redials and navigates the IRS phone tree until it gets a spot in the queue, then it calls you and connects you directly to the IRS agent. It saves you from having to do all the waiting yourself. I was skeptical too, but it works because it basically does the tedious part of constantly redialing when the IRS says they're too busy. Instead of you having to keep calling back, it does it for you until it gets through, then connects you right to the agent. No magic, just automation of the frustrating part.

How do you qualify for that 20% deduction? Is there a minimum income requirement? I just started my LLC mid-year and only made about $24k so far.

There's no minimum income requirement for the QBI deduction, so your $24k of LLC income would qualify! The calculation gets complicated if your total taxable income (from all sources) exceeds $170,050 for single filers or $340,100 for married filing jointly (2023 thresholds), but below those thresholds it's pretty straightforward - you get 20% of your qualified business income as a deduction. Just make sure you're tracking your business expenses properly on Schedule C first, as the QBI deduction is based on your net business income after expenses. TurboTax should walk you through this calculation after you enter your Schedule C information.

At what income level did you find S-Corp election worthwhile? I've heard you need to make enough to offset the extra accounting costs and payroll requirements.