Does anyone know if wire transfers from international clients get reported to the IRS? I do web design for several European companies and they wire money directly to my business account.

As someone who went through this exact confusion when I started my pottery business, I want to emphasize what others have said about keeping meticulous records. The IRS doesn't automatically see your daily transactions, but they have multiple ways to track income patterns. One thing I learned the hard way - even though cash sales don't leave an electronic trail to payment processors, if you're depositing large amounts of cash regularly, that can actually trigger bank reporting requirements. Banks monitor for unusual deposit patterns, and sudden increases in cash deposits can generate Suspicious Activity Reports. My advice: Open a separate business checking account if you haven't already, and treat it like the IRS is watching (because during an audit, they essentially are). Document every deposit - whether it's from Etsy sales, cash customers, or personal funds you're putting in to cover expenses. I use a simple spreadsheet noting the date, amount, and source of each deposit. Also, regarding your cash sales - while you don't have to deposit cash immediately, you absolutely must report that income in the tax year you earned it, not when you deposit it. The timing of bank deposits and income recognition for tax purposes are two different things.

When I filed 2 back tax returns in 2023, I was surprised to get a refund for one year and owed for the other. The IRS automatically applied the refund to what I owed before sending me the difference. So you might end up with a smaller debt than you think if your 2022 return shows a refund due!

One thing to keep in mind about filing multiple years at once - make sure you're using the correct tax forms and rates for each specific year. The standard deduction amounts, tax brackets, and even some forms change from year to year. For example, the standard deduction for 2022 was different from 2024. I made the mistake of using current year forms for an old return and had to refile it correctly. The IRS has all the prior year forms available on their website, so download the specific forms for 2022 when you file that return. This will help ensure everything processes smoothly and you don't get any correction notices that could delay things further.

Here's a pro tip - if your company allows remote work, maybe ask if they have a "workation" policy where they cover some of your expenses if you work X hours during personal travel? My company does this and it's awesome. I get reimbursed for internet and a portion of lodging if I work at least 5 hours per day during trips!

I understand your frustration - it does seem unfair on the surface! But the tax code focuses on the original intent/purpose of travel rather than what actually happens during the trip. Your colleague's trip qualifies because meeting clients was the primary reason for booking it, even if the business portion is brief. Since you mentioned having a consulting side business, that could potentially change things for you. If you could legitimately schedule client meetings or business activities as the PRIMARY purpose for future trips (not just working remotely on your regular job), those might qualify for deductions on your Schedule C. The IRS is pretty strict about this "primary purpose" test though. You'd need solid documentation showing the business reason drove the travel decision, not the other way around. It might be worth consulting with a tax professional to see if any of your travel patterns could legitimately qualify given your side business.

Has anyone actually gotten their employers to pay them back for the additional self-employment taxes they paid before filing the SS8? I've heard mixed things about whether you can recover that money directly from the employer versus just having the IRS collect their share going forward.

I went through a very similar situation last year and can share some practical tips based on my experience. Your approach of filing Form 8919 with your original return was absolutely correct - it shows you only paid the employee portion of FICA taxes rather than the full self-employment tax burden. A few things that helped me during the waiting period: 1. Keep detailed records of all your communications, work arrangements, and evidence of employee vs contractor status. The IRS may request additional documentation during their review. 2. Don't stress too much about the timeline - 6-8 months is normal, and some cases take longer. The IRS is thorough because these determinations set precedent for how similar situations are handled. 3. You're right not to file a 1040X preemptively. Since you already included Form 8919, you've essentially told the IRS you believe you were misclassified. Let them complete their determination first. 4. When the determination comes back (assuming it's in your favor), the IRS will handle collecting the employer's share of FICA taxes directly. You won't need to chase your former employer for payment. The whole process is frustrating but the IRS takes worker misclassification seriously. Based on what you've described (scheduled hours, company equipment, employee offer letter), you have a strong case. Hang in there!

Has anyone used TurboTax to file Schedule C with multiple years of losses? I'm wondering if certain tax software might flag this issue differently or provide better guidance.

I went through this exact situation with my consulting business a few years ago. Had 3 consecutive years of losses while I was building my client base, and the IRS did eventually question it. The key thing that saved me was having solid documentation of my business intent from day one. I kept detailed records of: - Client prospecting activities and marketing efforts - Business plan updates showing how I was adapting my approach - Professional development expenses (courses, certifications, networking events) - Time logs showing substantial hours devoted to business activities - Evidence of reducing expenses and changing strategies to achieve profitability When the IRS sent their initial inquiry letter, I responded with a comprehensive package showing all of this documentation. They accepted it without requiring an in-person audit or further escalation. The fact that you're now profitable and made specific business changes (cutting storage costs, reducing inventory) actually strengthens your position significantly. That shows you were operating with a genuine profit motive and making rational business decisions. I'd strongly recommend against your accountant's suggestion to show artificial profits. File accurately and focus on documenting your legitimate business activities and profit-seeking behavior instead.