Your Action Plan

Extends your filing deadline to October 15, 2026. FREE and automatic. Not filing = 5%/month penalty up to $12,500 on a $50K balance. There is literally no reason not to do this.

E-file via IRS Free File, tax software, or pay via IRS Direct Pay (payment automatically files the extension). Takes 5 minutes.

Illinois grants an automatic 6-month extension, but you need to file IL-505-I with any estimated payment. Do this via MyTax Illinois — it's fast and free.

Submit via mytax.illinois.gov. Include as much payment as you can — the 10% penalty cliff after 30 days is brutal.

Illinois penalties jump from 2% to 10% after just 30 days late. On $7,224, that's $722 vs $145. Pay IL before federal if you have to choose!

Pay via MyTax Illinois. If you can only pay part, pay as much as possible — the 10% applies only to the UNPAID amount. Paying $5,000 of $7,224 saves ~$500 in penalties.

No setup fee, pay within 180 days. Apply at irs.gov/opa. Immediate approval for balances under $100K.

Apply online at irs.gov/opa after filing your return or extension. You can also apply when you file in October. Choose the timing that works best for your cash flow.

Contribute up to $37,024 to a SEP-IRA. Can be established and funded by your filing deadline (including extensions!). This is likely your single biggest remaining tax savings opportunity.

Open a SEP-IRA at Fidelity, Schwab, or Vanguard. 25% of adjusted net SE income ($148,096) = $37,024 max. Tax savings at 24%: ~$8,886. If you missed the Solo 401(k) Dec 31 deadline, this is your play.

Above-the-line deduction for your health insurance premiums. Already on K-1 Box 13M. Just make sure Form 7206 gets filed and the amount hits Schedule 1, Line 17.

Form 7206 → Schedule 1, Line 17. This is NOT an itemized deduction. Don't put it on Schedule A. Saves ~$7,530 at 24% bracket.

Automatic deduction — just make sure it lands on Schedule 1, Line 15. Tax software handles this, but verify!

Calculated on Schedule SE, flows to Schedule 1, Line 15. Saves ~$2,700 at 24% bracket. This is the IRS saying 'we know being self-employed is expensive.'

$0 deduction this year, but establishes a $16,025 loss carryforward for future years. When business income turns positive, this reduces your QBI before the 20% deduction applies.

File Form 8995 or 8995-A. No immediate savings, but creates future value. The QBI deduction is now permanent under OBBBA. Guaranteed payments are excluded from QBI — only the business loss counts.

The OBBBA raised the SALT cap from $10K to $40K! Your estimated SALT: ~$14,800 (IL income tax + DuPage County property tax). Must itemize to benefit.

Schedule A, Lines 5a-5e. State income taxes + real estate taxes. Phase-down starts at $500K MAGI (you're well below). ~$1,000 more in savings vs. old $10K cap.

5% of property taxes paid on your principal residence. If you pay ~$10K in DuPage County property taxes, that's ~$500 credit.

Claimed on Schedule ICR attached to IL-1040. AGI limits: $250K single / $500K MFJ. A credit (not a deduction), so it's dollar-for-dollar savings.

If you use part of your home regularly and exclusively for business, claim it! Simplified: $1,500. Regular method: potentially $4,500+.

As a partner, claimed as Unreimbursed Partnership Expense (UPE) on Schedule E. Keep records of exclusive business use area and all home expenses. Simplified method requires minimal record-keeping.

Vehicle mileage, phone/internet business use, professional development, business meals (50%) — all deductible as UPE on Schedule E.

Review receipts, mileage logs, software subscriptions, conference costs, professional dues. Document business vs. personal use percentages. Every legitimate expense reduces your tax bill.

You have $46,924 in suspended losses waiting to be unlocked. Contributing capital to the LLC increases your basis, allowing these losses to become deductible.

Tax savings when released: $46,924 x 24% = $11,262 federal + $2,323 IL. This requires actual cash contribution to the LLC. Consult CPA on timing and amount.

Triple tax advantage! Deductible contributions, tax-free growth, tax-free medical withdrawals. Family limit: $8,550 for 2025. Requires HDHP enrollment.

Form 8889, deduction on Schedule 1, Line 13. Contribution deadline: April 15, 2026. Can invest funds in stocks/bonds. After age 65, non-medical withdrawals taxed as income (no penalty) — making it a stealth retirement account.

Compare every box on your K-1 with the partnership's Form 1065 and your records. Discrepancies = headaches later.

Check Box 1 ($-16,025), Box 4a ($175,377), Box 13M ($31,377), Box 14A ($159,352), Box 18C ($971), Box 20 Z ($-16,025), Box 20 ZZ ($443). If anything doesn't match, contact the partnership's tax preparer BEFORE filing.

Your basis is $0 after the excess distribution. This must be tracked annually on the Partner's Adjusted Basis Worksheet. Future distributions over $0 = capital gains.

Basis = prior year basis + income allocations + contributions - distributions - losses - nondeductible expenses. Keep this worksheet forever. Your tax software or CPA should maintain it.

W-2s (if any), 1099s, interest/dividend statements, other K-1s, etc. You need the complete picture, not just the partnership income.

Check for: W-2 from any employment, 1099-INT/DIV from banks/investments, 1099-B from brokerage accounts, 1099-G (if applicable), any other income sources.

FreeTaxUSA (free federal, ~$15 state), TurboTax Self-Employed (~$130-200), or a CPA ($500-2000+). All can handle K-1 filing.

FreeTaxUSA is the best value. TurboTax has better hand-holding. A CPA is worth it if you want someone handling the multi-form complexity, retirement planning, and basis tracking. Consider the CPA for at least this first year with the K-1.

Enter Box 14A ($159,352) on Line 2. The form handles the rest: 92.35% multiplier, SS and Medicare tax calculations, deductible half.

Use Section A (Short Schedule) if only SE income and it's under $176,100. Result: ~$22,513 total SE tax, ~$11,256 deductible half. Flows to Schedule 2 (tax) and Schedule 1 (deduction).

Enter $31,377 health insurance premiums. Verify deduction doesn't exceed net SE income (it doesn't — $159,352 >> $31,377). Result → Schedule 1, Line 17.

Straightforward form. Key check: you must have net SE income from the business under which the insurance plan is established. Deduction is NOT available for months you were eligible for employer-sponsored coverage.

This is OVERDUE! Late W-2 penalties are $130/W-2 for returns filed 1-30 days late, increasing over time. Get these generated and filed immediately.

Use QuickBooks Online Payroll to generate W-2s. File with SSA (Social Security Administration). Penalties increase the longer you wait: $130/W-2 (1-30 days late), $280/W-2 (31 days - Aug 1), $560/W-2 (after Aug 1). Intentional disregard: $630/W-2 with no maximum.

Ohio withholding isn't set up correctly in QuickBooks Online. This needs to be corrected for future payroll runs and may need amendments for past periods.

Illinois Department of Employment Security (IDES) status needs to be corrected. This affects unemployment tax obligations and potential penalties.

If the LLC has nexus in Ohio municipalities, municipal income tax registration is required. Each Ohio city has its own tax — check which ones apply.

First-time penalty abatement (FTA) may be available if the LLC has a clean compliance history. Can also request reasonable cause abatement.

Call SSA/IRS or submit a written request citing reasonable cause (first year of partnership, QuickBooks setup issues, etc.). First-time abatement is administrative — you just have to ask.