This thread has been incredibly helpful! I was in almost the exact same situation a few months ago - first time using a professional accountant after years of TurboTax, and I got really nervous when they asked me to sign Form 2848. What really helped me was doing some research on the IRS website about what the form actually does. It turns out it's not just normal - it's actually recommended by the IRS when working with tax professionals. The form creates a clear legal framework for your accountant to represent you, which protects both of you. One thing I learned that might be helpful: you can actually request a copy of your signed Form 2848 from the IRS at any time to see exactly what authorizations are on file. This gave me extra peace of mind knowing I could always verify what my accountant was authorized to do. Your instinct to be cautious is spot on, especially after that sketchy experience with the banking passwords. But based on everything I've learned, signing a properly completed Form 2848 with a reputable accountant is actually the professional way to handle the relationship. Good luck with your taxes!

Just wanted to add my perspective as someone who works in tax preparation - the Form 2848 (Power of Attorney) is absolutely standard and nothing to worry about! In fact, most reputable accounting firms will require it before they can effectively represent you. The key things to remember: - It's limited ONLY to tax matters with the IRS - You control exactly what years and forms are covered - You can revoke it anytime with a simple form (2848-R) - It actually protects both you and your accountant by clearly defining the relationship What I always tell my clients is to read through it carefully and ask questions about anything that's unclear. A good accountant will be happy to explain every section. Since this is your first year working together, limiting it to just 2024 tax matters is perfectly reasonable. You were absolutely right to be suspicious of that previous accountant wanting banking passwords - that's never appropriate and suggests someone who doesn't follow proper professional standards. The fact that your current accountant is using the official IRS form is actually a good sign that they know what they're doing! Don't feel bad about being cautious - it shows you're a responsible taxpayer who takes these things seriously.

I had this exact same question last year and it really tripped me up too! What finally clicked for me was realizing this is basically the IRS asking: "Are you financially independent or not?" Here's how I figured it out: 1. Add up ALL your living expenses for the year (rent, food, utilities, car, insurance, etc.) 2. Compare that total to what YOU earned from working 3. If your job income covers more than 50% of those expenses = answer "No" 4. If your job income covers less than 50% = answer "Yes" The tricky part is that "support you received" includes everything - your own earnings AND any help from others (family money, loans, scholarships, etc.). But they're only asking if your EARNED income specifically is less than half of that total support. From your description, it sounds like you're paying your own way with your job, so you'd likely answer "No" - meaning your earned income is NOT less than half your support because you're supporting yourself. The wording is definitely confusing, but once you realize it's just checking if you're self-sufficient through work income, it makes more sense!

I just want to thank everyone for all these helpful explanations! As someone who was completely lost on this question, reading through all your responses has been incredibly enlightening. The key insight that finally made it click for me was when someone explained it as the IRS essentially asking "Are you financially independent?" That reframes the confusing wording in a way that actually makes sense. For anyone else struggling with this: - If you're working and paying most of your own bills with your paycheck = answer "No" - If someone else (parents, family) is covering most of your living costs = answer "Yes" The double negative in the question wording ("Is your earned income LESS than half...") definitely makes it trickier than it needs to be, but once you understand what they're really asking, it's much clearer. Thanks again to everyone who shared their experiences and explanations - this community is amazing for helping each other navigate these confusing tax situations!

Has anyone used any particular tax software that handles this 941 deduction well for small business owners? I tried using TurboTax Small Business last year and it was super confusing with my payroll taxes.

Great question! I just went through this exact situation with my LLC last year. Yes, the employer portion of your 941 payroll taxes is definitely deductible on Schedule C. Here's what I learned: You can deduct the employer's share of Social Security (6.2%), Medicare (1.45%), FUTA, and any state unemployment taxes you paid. For your $2,100 in quarterly taxes, a good chunk of that should be deductible - just make sure you're only counting the employer portion, not the employee withholdings. I put mine on Line 23 "Taxes and licenses" on Schedule C. One thing that helped me was creating a simple spreadsheet to track the employer vs employee portions each quarter, since the 941 form shows everything together. Your payroll service should be able to give you a breakdown if you don't already have one. Also, don't forget about any state payroll taxes you paid - those are deductible too if they're the employer portion. Just keep good records of all your payroll tax payments and forms in case the IRS ever asks for documentation.

Don't forget about local taxes too! Some cities and counties have their own income taxes that you need to withhold for employees working there. I completely missed this for my employee in Ohio and had to deal with penalties. New York City, Philadelphia, San Francisco, and many Ohio and Pennsylvania municipalities have local income taxes. It's not enough to just register with the state - you need to check if there are local tax obligations too.

This is incredibly helpful information! I had no idea about the local tax requirements - that's definitely something I need to research for my remote employees. One thing I'm curious about is timing. If I have employees who started working remotely in different states earlier this year, but I haven't set up the state withholdings yet, what's the best way to handle catching up? Do I need to go back and calculate what should have been withheld from previous paychecks and make up those payments to the states? Or is there a way to just start fresh from the current payroll period going forward? I'm worried I might already be behind on some compliance requirements and want to make sure I handle this correctly to avoid penalties.

This thread has been incredibly helpful! I'm dealing with a similar situation with my first rental property purchase from last month. One thing I'd add based on my research is that the IRS Publication 527 (Residential Rental Property) specifically addresses this "placed in service" concept. What I found particularly useful was the distinction between startup costs (which may need to be amortized over 15 years) versus ordinary repair expenses (which can be deducted immediately). For example, if you're fixing existing issues to make the property rentable, those are generally repairs. But if you're adding new features or significantly upgrading systems, those would be improvements. I've been keeping a detailed spreadsheet categorizing each expense and the reason for it (e.g., "Fixed leaky faucet in kitchen - necessary for property to be rentable" vs "Upgraded to granite countertops - improvement"). This level of documentation should help support my position if there are ever any questions. The timeline approach that several people mentioned here is spot-on. I started my "available for rent" marketing about 2 weeks after purchase, even though I knew I'd need another month of repairs. Having that documented intent to rent seems to be the key factor in establishing when the property is considered "in service.

I've been following this discussion as someone who just went through a similar situation with my rental property purchase earlier this year. One thing that really helped me was understanding that the IRS actually has different rules for different types of pre-rental expenses, and it's not just a simple "before vs. after" distinction. What I learned from my tax attorney is that there are essentially three categories of pre-rental expenses: 1. **Ordinary repairs to make property rentable** - These can usually be deducted immediately if you can show active rental preparation 2. **Capital improvements** - Must be depreciated over 27.5 years regardless of timing 3. **Business startup costs** - May qualify for immediate deduction up to $5,000 with remaining amounts amortized over 15 years For your $3,700 in repairs, the key question isn't just timing but also whether these expenses fall into category 1 or 2. Fixing roof leaks and patching drywall to restore the property to rentable condition would typically be category 1 (immediately deductible), while something like installing a new HVAC system would be category 2 (must be depreciated). The documentation strategies everyone mentioned here are crucial, but also consider getting a second opinion from a CPA who specializes in rental properties. Some general practice accountants tend to be overly conservative on rental property issues because they don't deal with them as frequently. I ended up saving about $1,800 in taxes by properly categorizing my pre-rental expenses instead of capitalizing everything my original accountant suggested.