Did you form an LLC or anything formal like that? Or were you just operating as a sole proprietor? I'm wondering if the business structure makes a difference in how the IRS views it.

I was just operating as a sole proprietor with a Schedule C. Having an LLC might look more "official" but the IRS cares more about how you actually operate than your formal business structure. It's your business practices that really matter - keeping separate finances, maintaining professional records, having a clear plan for profitability, marketing your services/products, etc. Those factors demonstrate business intent regardless of whether you've formed an LLC, corporation, or are operating as a sole proprietor. The IRS is primarily concerned with whether you have a genuine profit motive or are just trying to deduct personal expenses.

I used it last year. It asks questions about your profit motive and helps identify which expenses qualify. The interview format walks you through everything. It was pretty helpful for my side gig, caught some deductions I would've missed.

This is super helpful, thanks! How do I find the GIS system for my county? Is that something on the assessor website?

Most counties have a GIS portal or property search tool on their official website. Usually you can find it by searching "[your county name] property search" or "[your county name] GIS." Once you're in the system, you can usually click on parcels near your home to see their assessment values, square footage, and other details. Focus on homes with similar age, size, and features to yours. Print or save screenshots of properties that are comparable but assessed at lower values, as these make the strongest case for an appeal.

That's actually not a great idea. Withholding allowances are for income tax, not property tax. If you adjust those, you might end up with a big tax bill in April that you can't pay. Property tax increases are separate from income taxes.

3 Good point about retirement accounts! I'm an IC too and my Solo 401k saves me thousands in taxes each year. Question though - for meals, I thought the 50% limit was temporarily changed to 100% for 2021-2022? Has that gone back to 50% for 2023 returns?

23 Yes, the 100% business meal deduction was a temporary COVID relief measure for 2021 and 2022 only. For 2023 and beyond, we're back to the standard 50% deduction limit for most business meals. The key is proper documentation - not just the receipt but notes on the business purpose and who you were meeting with if it was a client meal. For solo meals while traveling for work, document which job you were working that required overnight travel. Digital receipt apps with note fields are lifesavers for audit protection.

4 Thank you for the practical advice! For the S-Corp, is it too late to set one up for this tax year? I've already been working as a sole proprietor for about 6 months. Also, what kind of costs should I expect for the initial S-Corp setup and ongoing maintenance?

Oh that's good to know! My wife did change her name after we got married. Does the name on the tax return need to match her W-2 or her updated Social Security card? Her W-2 still has her maiden name.

The name needs to match what's on her Social Security card. The IRS systems check against the Social Security database, not her W-2. So if she's already updated her name with Social Security, use her new name on the tax return even if her W-2 still shows her maiden name. If she hasn't updated her Social Security card yet, you should either do that before filing or use her maiden name on the tax return this year. You don't need to delay filing if her SS card still has her maiden name - just file with whatever name is currently on her Social Security card and make the update for next year.

What software did you use to figure that out? We're trying to decide between TurboTax and H&R Block and wondering which is better for figuring out deductions for newly married homeowners.

That's scary! What app or method do you recommend for tracking mileage properly now? And did they go after previous tax years too or just the one where you took the big deduction?

I now use MileIQ which automatically tracks all my drives and lets me categorize them as business or personal. It creates IRS-compliant reports that show all the details they want. Some other good ones are Everlance and Stride. They only examined the year I took the big deduction, thankfully. But the audit was still a nightmare that lasted 8 months. The agent explained that these large vehicle deductions are a "red flag" that often trigger extra scrutiny. If you do claim the deduction, just make absolutely sure your documentation is bulletproof from day one. Start the mileage log the very first day you put the vehicle in service.

What about insurance costs? My business insurance agent told me rates would be MUCH higher if I register a luxury SUV as a business vehicle versus personal use. Did you see a big insurance premium increase?

The insurance cost increase was definitely significant. My commercial auto policy for the Mercedes GLS is about 40% higher than it would be as a personal vehicle. However, the business portion of the insurance is also tax-deductible as a business expense. One thing my accountant pointed out is to look at the total cost of ownership compared to the tax benefits. In my case, even with higher insurance costs, the tax savings from the Section 179 deduction still made it worthwhile. But it's something you should definitely factor into your calculations before making a decision. The other consideration is that I had to make sure my business entity owned the vehicle (LLC in my case) rather than owning it personally to maximize the benefits.