Be careful about keeping a business technically "open" but dormant for too long. I did this and it created some unexpected complications: 1) Had to keep filing zero-income Schedule C forms each year 2) Some states (like California) have minimum franchise taxes even for inactive businesses 3) Had to maintain certain business licenses and registrations which cost money 4) Created confusion with local tax authorities If you don't realistically expect to restart the business within a year or two, sometimes it's cleaner to just close it properly and start fresh if needed later. Those QBI losses might never be usable if you're fully transitioned to W2 income anyway.

This is a great discussion that touches on something I dealt with recently. One thing worth considering is the interaction between QBI losses and the overall Section 199A deduction limitation based on your taxable income. Even if you do generate future QBI to offset those carryforward losses, remember that the Section 199A deduction is still limited to 20% of your taxable income minus net capital gains. So if you're earning W2 income and have other deductions that reduce your taxable income significantly, you might not be able to fully utilize the QBI benefit even when you do have positive qualified business income. I learned this the hard way when I started a small side business thinking I could immediately benefit from my old QBI losses. The math worked out differently than I expected because of the taxable income limitation. It's another factor to consider when deciding whether to keep a dormant business alive or just close it cleanly. Also, regarding the state-level complications others mentioned - some states don't follow federal QBI rules at all, so you could be maintaining a business entity for federal tax benefits that don't even apply at the state level where you might owe annual fees or taxes.

I'm actually a bit confused why you need Form 8453 at all? I've been e-filing for years and have never had to mail anything afterward. Most tax software handles everything electronically now.

I had a similar situation last year! The 3 business day rule mentioned earlier is correct - you wait for IRS acceptance confirmation, then mail Form 8453 within 3 business days. One thing that might help with your timing concerns: you can actually prepare everything in advance. Get your Form 8453 ready to go (just don't sign it until after e-file acceptance), put all required attachments together, and have the envelope addressed and stamped. That way, as soon as you get the acceptance email, you can quickly sign the form and drop it in the mail. Since you're leaving April 20th, I'd suggest e-filing by April 15th at the latest to give yourself a buffer. Most e-file acceptances come through within 24-48 hours, so you should have time to mail the 8453 before your trip. Also double-check with your tax software exactly which documents you need to include - sometimes it flags Form 8453 when it's not actually required for your specific situation.

mine took 9 months last year but i got interest added atleast 🤷‍♀️

CP75 audits are definitely rough - had one last year and it took about 8 months total. The key is to respond quickly with all the documentation they request (W-2s, bank statements, childcare records if you claimed EIC with kids). Don't wait for them to send follow-up letters. Also keep copies of everything you send them because they "lose" stuff sometimes. The interest does help a little when you finally get your refund but obviously waiting that long sucks.

Was in your exact shoes last year with $38k self-employment and two kids over 18. Thought I was going to owe thousands, but you know what? After claiming my legitimate business deductions (home office, mileage, supplies, health insurance premiums), the QBI deduction, and finding out my 19-year-old still qualified as my dependent because she was a full-time student, I only ended up owing $2,100. Not great, but way better than the $7k I was panicking about! Set up an IRS payment plan and now I'm making quarterly payments for 2024. Doesn't the whole self-employment tax system seem designed to trip us up?

I'm in almost the identical situation - self-employed with around $36k income and two adult kids (19 and 21). What I learned from my tax preparer last year is that the key factors are: 1) Whether your daughters qualify as dependents (the college student rule for the 20-year-old is crucial), 2) Tracking every possible business expense you can legitimately claim, and 3) Don't forget about the QBI deduction which can reduce your taxable income by up to 20%. Based on similar situations I've seen in this community, you're probably looking at owing somewhere between $3,000-$5,000, but it could be significantly less with proper deductions. The good news is the IRS offers reasonable payment plans if you can't pay it all at once. Have you been keeping receipts for business expenses throughout the year?

Has anyone here used TurboTax for their home office deduction? I've been using it for years but it seems like it doesn't handle Form 8829 well when there's a business loss. I'm wondering if FreeTaxUSA or others do a better job with this specific situation.

Just wanted to share my experience with the home office deduction as someone who went through the exact same situation! I have a small freelance writing business that I run from a dedicated room in my house while working my regular W-2 job. One thing that really helped me understand the Form 8829 vs Schedule C confusion was learning that Form 8829 is specifically for expenses related to the physical space of your home office, while Schedule C is for general business expenses. So your mortgage interest and property taxes definitely go on Form 8829 as indirect expenses (since they benefit your whole house), and then Form 8829 calculates what portion can be deducted based on your 15% usage. The carryforward aspect was a game-changer for me. Even though my business showed a loss the first year, I still completed Form 8829 because those unused deductions carried forward to the next year when I became profitable. My tax software (I use FreeTaxUSA too) automatically tracked this, but I also kept my own spreadsheet just to be safe. One tip: make sure you're measuring your office space correctly for that percentage calculation. The IRS can be picky about this, so I actually drew a floor plan with measurements to document it properly.