This whole thread has been incredibly helpful! I've been putting off doing my taxes because I was so confused about this "other income" section. Based on everyone's responses, it sounds like I need to be more systematic about this. I have a few different situations: I sold my old textbooks for about $320 (definitely less than I paid for them originally), got a $100 referral bonus from my bank, and made $180 helping my neighbor build a deck. From what I'm reading here, the textbook sales don't need to be reported since I sold at a loss, but the bank referral bonus and the deck work should go in "other income." One question though - should I put each item on a separate line with descriptions, or can I combine them? Like "Bank referral bonus $100, Construction work $180" all on line 8z? The forms don't seem super clear about whether you need to itemize each source separately or if you can group similar things together.

This has been such a helpful thread! I'm a tax preparer and I see people struggle with the "other income" section constantly. A few additional things to keep in mind: 1. **Timing matters** - Report income in the year you received it, not when you earned it. So if you did work in December 2023 but got paid in January 2024, that goes on your 2024 return. 2. **Keep records** - Even for small amounts, keep documentation. Bank statements, PayPal records, Venmo transactions, etc. The IRS can ask for proof of any income you report (or don't report). 3. **State taxes** - Don't forget that most states will also want to know about this "other income" if you have to file a state return. 4. **Form 1099-MISC threshold** - If any single payer gave you $600+ during the year, they should have sent you a 1099-MISC. If you didn't get one but should have, you still need to report the income. The key is being honest and thorough. The IRS would rather see you report questionable small amounts than find out later you didn't report something you should have. When in doubt, report it with a clear description!

Does anyone know if you can apply NOL carryforwards when using tax software like TurboTax or do you need an accountant? I'm trying to save money since I'm still in startup mode but don't want to miss out on using my losses from last year.

Just want to add my experience as someone who went through this recently. I had about $8k in losses from my graphic design business startup costs and was able to carry them forward successfully. The key thing I learned is that you need to distinguish between startup costs (which might need to be amortized over 15 years) and regular business operating expenses (which can create the NOL immediately). Things like your office supplies, software subscriptions, and marketing expenses that you mentioned should qualify for immediate NOL treatment. But if you had any costs related to actually starting the business (like legal fees to set up your LLC, initial market research, etc.), those might fall under the startup cost rules and need different treatment. I'd recommend keeping track of which category each expense falls into - it'll make carrying forward much smoother and help if you ever get questioned about it. The NOL carryforward has been a lifesaver for offsetting my profits this year!

I used Ageras last year and had a positive experience overall. The platform itself is legitimate - they do verify that the accountants are licensed and have proper credentials. I got matched with 3 accountants and ended up choosing one who specialized in small business taxes like mine. The key is to really vet the accountants they match you with, just like you would with any tax professional. Ask about their experience with businesses similar to yours, request references, and make sure they have an active PTIN (Preparer Tax Identification Number). The accountant I worked with was very transparent about what was included in their quote and there were no surprises when it came to final billing. One tip: when you have your initial calls with the matched accountants, ask them to walk through exactly what they'll review and what their process looks like. The good ones will be happy to explain their approach and answer your questions. If someone seems evasive or rushes you to sign up, that's a red flag regardless of the platform. The quotes you received ($275-$650) sound reasonable for small business tax prep, especially compared to the $800+ you were quoted elsewhere. Just make sure to clarify what services are included at each price point.

I've been in a similar situation and ended up using Ageras about 6 months ago for my small business taxes. The platform is legitimate - they do verify accountant credentials before listing them. What I found helpful was treating it like any other professional service search. I scheduled calls with 3 of the 4 accountants who reached out to me and asked each one the same set of questions: their experience with businesses like mine, what exactly was included in their quote, their turnaround time, and how they handle communications during tax season. Two of the accountants were great - professional, detailed in their explanations, and transparent about pricing. One seemed rushed and couldn't give me specifics about what my quote included, so I crossed them off my list immediately. I ended up going with an accountant who quoted $375 for my S-Corp return. The final bill was exactly what was quoted with no surprises. She was responsive throughout the process and even caught a deduction my previous accountant had missed. My advice: don't rush the decision just because you got matched. Take advantage of those initial consultations to really evaluate who you're most comfortable working with. The quotes you received seem reasonable, but make sure you understand exactly what services are included at each price point before making your choice.

Just be careful with this strategy. My brother-in-law tried the "continuous business loss" approach for 4 years straight and got audited. Ended up owing back taxes plus penalties because he couldn't prove legitimate business intent. The IRS specifically looked at his purchases of depreciable assets and determined many weren't necessary for the business. Make sure you can demonstrate you're trying to make a profit. Keep good records, have a business plan, separate business accounts, proper bookkeeping, etc. It's not just about the numbers - it's about showing you're running a real business.

One thing I'd add to this excellent discussion is the importance of understanding the "at-risk" rules in addition to the passive activity limitations mentioned. Even if you materially participate in your business, you can generally only deduct losses up to the amount you have "at risk" in the activity. For most small businesses, this means you can deduct losses up to the amount of cash you've invested plus any amounts you've borrowed for which you're personally liable. But if you're using non-recourse financing (where you're not personally liable for the debt), those amounts don't count toward your at-risk basis. Also, regarding the sustainability question - while the hobby loss rule is important, don't overlook the "excess business loss" limitation under Section 461(l). For 2024, if your total business losses exceed $305,000 (or $610,000 if married filing jointly), the excess gets treated as a net operating loss carryforward rather than offsetting your current year income. This mainly affects high-income earners, but it's something to be aware of when planning your strategy. The key is balancing legitimate business deductions with demonstrable profit motive. Document everything, maintain separate business accounts, and consider consulting with a tax professional who specializes in small business taxation.

Just a practical observation - I think people are overlooking the fact that one partner is a foreign national who's never even been to the US. That's a much bigger complication than just the unfiled 1065s.

This is a complex situation that requires careful handling. Given the 10-year gap and foreign partner involvement, I'd strongly recommend against the "dissolve and ignore" approach - that could actually make things much worse if the IRS eventually catches up. The foreign partner issue is particularly important here. Even though they've never been to the US, they likely had US tax filing obligations for their share of the partnership income. The partnership should have been withholding taxes on the foreign partner's behalf and filing Form 8805 annually. This missing withholding could create additional compliance issues beyond just the unfiled 1065s. My suggestion would be to start with the most recent 3 years of partnership returns and work backwards. File Form 1065 for each year and ensure the foreign partner gets an ITIN and files their required US returns. The voluntary compliance approach typically works better than waiting for the IRS to find you. For penalty abatement, focus on any reasonable cause circumstances - were there health issues, natural disasters, or other qualifying events during this period? The low income amounts might help with demonstrating that this wasn't willful tax evasion. Consider consulting with a tax professional who has experience with international partnerships, as the foreign partner requirements add significant complexity to an already challenging situation.