Thanks for the solid advice! For the quarterly taxes, is it just a flat 30% of income or does it vary based on what expenses I've had that quarter? Also, do most banks offer business accounts to sole proprietors or do I need an LLC first?

The quarterly tax amounts should ideally be based on your actual profit for that quarter (income minus expenses), but many contractors use a simplified approach of setting aside a percentage of gross income to make it more manageable. The 30% is just a rule of thumb - your actual percentage might be higher or lower depending on your state tax situation and deductions. Most banks absolutely offer business accounts to sole proprietors - you don't need an LLC first. You'll typically need your Social Security number and possibly a DBA ("doing business as") registration if you're operating under a business name that's not your personal name. I'd recommend shopping around as some banks offer free business checking while others charge monthly fees.

Can confirm this 100%. I broke my wrist in a bike accident last year and couldn't code for 8 weeks. No income coming in but rent and bills still due. The disability insurance I had grumbled at paying for? Saved me from emptying my emergency fund.

Where exactly is this worksheet in TaxSlayer? I've been all through the Sale of Home screens and can't find any option to indicate partial business use that would trigger both forms.

The worksheet isn't immediately obvious. In the Sale of Home section, after you enter the basic information about the sale, look for a link called "Additional Information" or "Special Situations" (the exact wording varies by version). Click that and you'll find a question asking if any part of the home was used for business or rental purposes. When you answer "Yes" to that question, you'll get additional fields to enter the percentage of business use and the dates of business use. This is what tells TaxSlayer to split the reporting between Form 8949 and Form 4797. The software will then calculate the appropriate amounts for each form. Make sure you have the dates correct for when it was converted from personal to rental use, as this affects the basis calculations significantly.

The Practitioner Priority Line is great when you can actually get through! It's amazing how different tax software handles this situation differently. Some create a phantom entry on Schedule D that offsets the 4797 entry, others require manual adjustments. Did the IRS agent mention any specific form line references to make sure everything ties together correctly?

Can you explain what you mean by tax loss harvesting? I'm in a similar situation with about $8K in losses this year.

Tax loss harvesting means strategically selling investments that have declined in value to realize losses that can offset capital gains or up to $3,000 of ordinary income per year. Since you already have $8K in losses, you'll use $3K this year against ordinary income, then have $5K carrying forward. In future years, if you have investments that have appreciated significantly and you want to sell them, your carried-over losses will offset those gains, potentially reducing or eliminating the tax impact. Just be careful of the wash sale rule - don't buy substantially identical securities within 30 days before or after selling at a loss.

Learned this the hard way too. Does anyone know if turbotax carries this info forward correctly if you use them consecutive years?

22 I use it every year for my seasonal business. It's definitely more work but WORTH IT if your income is lumpy. Instead of being required to pay equal amounts each quarter, you calculate based on what you've actually earned by the end of each quarter. My Q1 and Q2 payments are tiny, then Q3 and Q4 are massive when we hit our busy season. Your accountant is right that it's complicated though. You basically have to do a mini tax return for each quarter. I wouldn't try it without professional help the first time.

That's a really good point about spreading it out. I think I'll do the 5 paycheck option since that would be way less disruptive to my monthly budget. Do you think I need to specifically ask HR about the state tax withholding or would they typically handle both?

Definitely ask HR specifically about state taxes. In my experience, some payroll systems don't automatically adjust state withholdings when federal is increased. Just tell them you want to make sure both federal AND state taxes are being withheld appropriately for the HRA payment. They should be able to handle that for you.

I don't think that's accurate. The taxes you pay are based on the tax year they're for, not when you pay them. So taxes for 2023 income always count toward 2023 SALT deduction regardless of when you actually pay them.