Forget all this complicated advice. I've been delivering for 3 years and I just deduct EVERYTHING. Food, gas, car payments, insurance, phone, internet at home, part of my rent for "home office." Never been audited. The system is rigged against regular people anyway, so take what you can get!

I completely agree with @Zainab Abdulrahman here - this is terrible advice that could get you in serious trouble! @Natasha Romanova, deducting "everything" including rent for a fake home office when you're doing food delivery is exactly the kind of behavior that triggers audits. The IRS has sophisticated algorithms that flag returns with unusually high deduction percentages relative to income. For someone making $400-500/month from delivery work, claiming thousands in questionable deductions will stick out like a sore thumb. And when (not if) you get caught, you'll owe back taxes, interest, penalties, AND potentially face fraud charges. @Miguel Castro, stick with legitimate deductions: mileage using the standard rate, phone bill percentage for business use, insulated bags, and other actual business expenses. Keep detailed records and only claim what you can legitimately defend. It's better to pay a little more in taxes than to risk massive penalties later.

Don't stress too much about this! I accidentally selected "retail" for my SAAS business two years ago and it's never caused any issues. The business category on the EIN application isn't as critical as people make it out to be. The IRS cares more about accurate income reporting than the specific category you select during application.

Great question! I went through this exact same process last year for my SaaS startup. After researching extensively and consulting with my accountant, I selected "Service" for our EIN application. The reasoning is that SaaS businesses are fundamentally providing ongoing access to software functionality rather than selling a tangible product. Even though customers "purchase" subscriptions, what they're really buying is continuous access to your service platform. This puts it squarely in the service category rather than retail, which is typically reserved for businesses selling physical goods or one-time software purchases. The IRS views subscription-based software access as a service offering, similar to how they'd classify other subscription services like consulting or cloud hosting.

This is a complex situation but definitely not unfixable. I've helped several clients through similar partnership/payroll reclassification issues. Here's what you need to prioritize: 1. **Immediate assessment**: Gather all your payroll records, LLC operating agreement, and any state/federal filings to confirm your tax status and the scope of corrections needed. 2. **Consider penalty relief**: Look into First Time Penalty Abatement if you qualify, or Reasonable Cause relief for the late 1065 filings. The IRS is sometimes more lenient when businesses proactively correct mistakes. 3. **Sequential filing strategy**: File the 1065s in chronological order starting with the earliest year. This helps establish the pattern of corrections and makes it easier for the IRS to process. 4. **Partner's individual impact**: The partner who was paid through payroll will likely owe additional self-employment taxes, but they may also be eligible for some credits they missed as a partner (like the Section 199A deduction if applicable). 5. **Professional help**: Given the 4-year scope and multiple return types involved, seriously consider hiring a tax professional experienced in partnership corrections. The cost will likely be offset by avoiding bigger mistakes and potentially reducing penalties. The key is being proactive and systematic about the correction process. The IRS generally works with taxpayers who voluntarily come forward to fix mistakes.

One thing I haven't seen mentioned yet is the importance of documenting your correction process thoroughly. Keep detailed records of every amended return filed, every payment made, and all correspondence with the IRS. This documentation becomes crucial if there are any disputes later or if the IRS has questions about your corrections. Also, consider requesting penalty abatement letters for each tax year once you've filed the corrections and made payments. The IRS sometimes grants relief for reasonable cause, especially when businesses proactively correct mistakes. Your cooperation in fixing this voluntarily could work in your favor. For the partner who was incorrectly paid through payroll, make sure they understand they'll need to file amended individual returns (1040X) for each affected year. The timing matters here - generally you have 3 years from the original due date to amend and claim refunds, so depending on when those original returns were filed, some years might be getting close to that deadline. Finally, once this is all corrected, establish proper ongoing procedures to prevent this from happening again. Set up quarterly partnership meetings to review tax obligations and consider working with a bookkeeper or accountant who understands partnership taxation.

One thing to keep in mind is that the IRS has specific rules about when you can use a child's SSN that was issued after the tax year ended. Since your son got his SSN in November 2024, you should be able to use it for amending your 2022 and 2023 returns. The IRS generally allows this as long as the child was a U.S. citizen or resident alien during the tax year in question. Also, don't forget about the Earned Income Tax Credit (EITC) if you qualify! With a qualifying child and Head of Household status, you might be eligible for this credit too, which could add even more to your refund. The EITC amounts were pretty substantial in 2022 and 2023 for taxpayers with children. I'd recommend using the IRS's Interactive Tax Assistant tool on their website to double-check all the credits you might qualify for before filing your amendments. It's free and can help ensure you're not missing anything.

I went through a very similar situation when my daughter finally got her SSN after being born abroad. The good news is that you don't need to include special documentation about when your son received his SSN with your amended returns. The IRS system handles this automatically - they understand that SSNs issued after the tax year can be used for amendments as long as the child qualified as your dependent during those years. Just make sure when you file Form 1040-X for each year that you clearly enter your son's SSN in the dependent section and check the box indicating you're adding a dependent. The IRS will cross-reference this with Social Security Administration records. One tip: when you calculate the EITC, use the IRS EITC Assistant tool online first to get an estimate of what you might qualify for. With Head of Household status and one qualifying child, you could be looking at substantial credits for both years. Also consider if you paid for childcare - you might qualify for the Child and Dependent Care Credit too, which would go on Form 2441. The whole process took about 6 months for my amendments to be processed, but the refunds were definitely worth the wait. Just be patient and keep copies of everything you submit!

As someone new to this community, I really appreciate all the helpful advice shared here! I'm in a similar boat - just switched jobs and my spouse started freelancing, so figuring out our withholding has been a nightmare with the IRS calculator. Reading through everyone's experiences, it sounds like the consensus is to aim for "good enough" rather than perfect precision. That's honestly such a relief to hear! I was spending hours trying to account for every possible scenario and driving myself crazy in the process. The suggestions about alternative tools like taxr.ai and FreeTaxUSA's calculator are really helpful. Sometimes you just need a different interface to make the same math more understandable. And the tip about the safe harbor rule for avoiding underpayment penalties is something I definitely need to look into more. Thanks everyone for sharing your real-world strategies. It's reassuring to know that even tax professionals recommend the "set it and forget it" approach rather than constantly adjusting. I think I'll update our W4s once to account for our major changes and then try to resist the urge to tinker with them every month!

Welcome to the community! I'm also relatively new here and have been struggling with the exact same W4 calculator issues. It's so validating to read through this thread and realize I'm not the only one finding the new system unnecessarily complicated. Like many of you, I really miss the simplicity of just picking a number between 0-9. The current calculator feels like it's designed by people who have never actually had to use it in real life - all those confusing questions and scenarios that may or may not apply to your situation. I'm definitely going to try some of the alternatives mentioned here, especially taxr.ai since multiple people have had good experiences with it. The idea of getting clear W4 instructions without having to navigate that maze of IRS questions sounds amazing. The "good enough" philosophy that's emerged in this discussion is exactly what I needed to hear. I've been stressing myself out trying to account for every possible income change when really I should just aim to get in the ballpark and adjust at tax time if needed. Thanks everyone for sharing your experiences - it's made me feel much less alone in this struggle!