Seriously, don't skip professional liability insurance if you're starting a tax prep business! I learned this the hard way when I made a calculation error on a client's Schedule C that resulted in them owing penalties. The client threatened to sue for the penalties plus damages. Insurance saved me thousands. Also, make sure you understand and use proper engagement letters with every client that clearly outline your responsibilities and theirs. This includes what happens if there's an audit, who's responsible for providing accurate information, and your fee structure.

Great advice from everyone here! I'm in a similar position - worked at a regional CPA firm for a few years but thinking about branching out on my own. One thing I'd add is to consider starting very small and growing gradually. Maybe begin with just 20-30 clients your first year to really understand the business side of things. Also, don't underestimate the technology costs beyond just tax software. You'll need secure file storage, client portals for document sharing, appointment scheduling systems, and potentially a separate business phone line. These costs can add up quickly but are essential for running a professional operation. One last tip - consider specializing in a particular niche rather than trying to be everything to everyone. Whether it's small business owners, freelancers, or people with rental properties, having expertise in specific areas can help you command higher fees and build a reputation.

Great question! As a newcomer to this complex topic, I'm learning a lot from this discussion. One thing I'm wondering about is whether there are any state-level implications to consider in addition to the federal tax rules everyone's discussing? I live in California, which I know has its own gift and inheritance tax rules. Would the cost basis carryover rules work the same way for state taxes, or could there be additional complications when gifting stock across state lines? For example, if your aunt lived in a different state when she originally purchased the Microsoft shares, or if your daughter will be attending college in another state where she might establish residency? Also, since several people mentioned the importance of documentation - is there a specific format or type of documentation that the IRS expects for gifted securities? I want to make sure I'm prepared if I ever find myself in a similar situation with family stock transfers. This thread has been incredibly helpful for understanding how complex these multi-generational transfers can be!

As someone new to this community and dealing with a similar gifted stock situation, this thread has been incredibly enlightening! I'm currently trying to navigate the cost basis rules for some Tesla shares my uncle gifted me last year, and reading about everyone's experiences has helped me understand I need to be much more proactive about documentation. One question I haven't seen addressed yet: what happens if the original giftor (in your case, your aunt) passes away before you complete the gift to your daughter? Does this affect the cost basis calculation at all, or would the carryover basis rules still apply the same way? I'm asking because my uncle is elderly and I want to make sure I understand all the potential scenarios before making any decisions about re-gifting portions of the Tesla stock to my own children. Also, for those who mentioned using tax preparation services, has anyone worked with a CPA who specializes in multi-generational wealth transfer? I'm wondering if the complexity of these situations warrants paying for specialized expertise rather than trying to navigate it through general tax software or services. Thank you all for sharing your experiences - it's clear this is much more complicated than I initially thought!

Just wanted to add that I've been seeing this verification step pop up more frequently this tax season. It seems like the IRS is rolling this out to more taxpayers as part of their identity theft prevention efforts. One thing to keep in mind is that if you've moved recently or have any address discrepancies between your current return and what they have on file, this verification is almost guaranteed to trigger. The good news is that once you complete it successfully, you typically won't have to do it again for future returns unless there are major changes to your account. Also, if you're using tax software like TurboTax or H&R Block, they should have warned you about potential verification delays during the filing process, though I know not everyone reads those notifications carefully. The 14-digit control number is definitely the real deal - don't try to bypass it or look for workarounds online, as that could flag your account for additional scrutiny.

I just went through this same verification process last week! The whole thing is legit but definitely confusing if you've never seen it before. The 14-digit control number comes on a pretty basic-looking IRS notice - mine was labeled "CP01H Notice" at the top and had the control number in a box about halfway down the page. What really helped me was setting up informed delivery with USPS so I could see what mail was coming each day. That way I didn't accidentally toss the notice thinking it was spam. The letter took about 10 days to arrive after I hit the verification screen. One heads up - make sure you enter the control number exactly as it appears on the letter. There are no spaces or dashes, just 14 consecutive digits. I made the mistake of adding spaces the first time and got an error message. Once you get it right though, the verification is instant and you're back to normal IRS online access. The whole thing is definitely a pain but it beats having to call the IRS and wait on hold for hours!

Haha, offsets are like that friend who remembers you owe them $20 from six years ago! 😂 But seriously, the community wisdom here is pretty consistent: offsets are definitely up this year compared to the past few. The pandemic protections have expired, and collection activities have resumed full force. The best approach is always to be proactive - check for potential offsets before you file, adjust your withholding if needed, and never count on your full refund until it's actually in your account. Most people don't realize you can call 800-304-3107, enter your SSN, and find out if you have potential offsets before you even file.

I can confirm this trend is absolutely real! As someone who works in tax preparation, I've seen a massive uptick in offset cases this filing season compared to the last few years. The COVID-19 protections that suspended most federal debt collections expired, and agencies are aggressively catching up on collections they couldn't pursue during 2020-2022. What's particularly frustrating is that many taxpayers aren't getting the required 60-day advance notice, so they're blindsided when their refund is reduced or eliminated entirely. I always recommend clients call the Treasury Offset Program hotline at 800-304-3107 BEFORE filing to check for potential offsets. It's a simple automated system - just enter your SSN and it'll tell you if any federal agencies have submitted your debt for offset collection. The main culprits I'm seeing this year: defaulted federal student loans (Department of Education is very active), unpaid state income taxes, child support arrearages, and old federal agency debts like SBA loans. Even debts that are years old can suddenly resurface for tax offset collection. Better to know ahead of time than get surprised!

I was in exactly this situation last year!! My advice - if u can afford it just hire a full service accountant for the entire return. I tried to do what ur suggesting and ended up with a mess. The accountant I approached wanted to review EVERYTHING anyway to make sure the 7203 was right. He said basis is connected to everything else. The debt transfer between personal/business cards makes it even more complicated. When I transferred business debt to personal, it was actually considered a contribution to capital which INCREASED my basis (which helped me claim more losses). But an accountant needs to see your full situation to determine this.

You've gotten some great advice here! I'm a tax preparer who works with a lot of small S Corps, and yes, absolutely you can hire someone just for the Form 7203. I do this type of work regularly. The key thing to understand is that while they won't need to sign as the preparer, they'll still want to review your prior year returns and understand the full picture of your business transactions. The basis calculation isn't just about one year - it's cumulative from when you started the S Corp. For your specific situation with the credit card debt transfer, that's actually a common issue that significantly affects basis. When you paid business debt with personal funds, that typically increases your stock basis, which could allow you to claim more of those suspended losses from 2021. I'd recommend looking for a CPA or EA who advertises S Corp expertise. Many will quote you a flat fee for just the 7203 - typically $200-500 depending on complexity. Make sure to ask upfront if they're comfortable doing just one form rather than the full return. Most professionals are fine with this arrangement. Bring your 2021 and 2022 tax returns, documentation of the credit card transfers, and any loan agreements between you and the business. Good luck!