One additional factor to consider is quarterly estimated taxes. As a sole proprietor, you're already dealing with quarterly payments, but the calculation becomes more complex with an S Corp because you'll need to account for both payroll taxes on your salary and estimated taxes on distributions. With an LLC (taxed as sole proprietorship), you continue making quarterly payments on your full profit. With an S Corp, your salary portion gets regular payroll tax withholding, but you still need to make quarterly payments on the distribution portion. This can actually help with cash flow management since the payroll withholding spreads out some of your tax burden throughout the year rather than having it all hit quarterly. But it does mean more complexity in calculating what you owe each quarter. Also worth noting - if you do elect S Corp status, make sure you start payroll from day one of the election. I've seen people get in trouble trying to back-calculate reasonable salary after the fact. The IRS expects regular, ongoing payroll if you're claiming S Corp tax treatment. At your income level, I'd echo others saying LLC now with potential S Corp election later, but definitely get that liability protection in place sooner rather than later!

This has been an incredibly informative thread! As someone who's been procrastinating on this decision for my own consulting business, reading everyone's real experiences has been super valuable. A few key takeaways I'm getting: 1. Start with LLC for liability protection regardless of income level 2. S Corp election makes sense around $60-75k+ in profit when tax savings outweigh complexity costs 3. State-specific rules can significantly impact the math 4. Proper record-keeping and business formalities are crucial for liability protection One question I haven't seen addressed: if you elect S Corp status, how flexible are you with adjusting your salary year to year based on business performance? For example, if I have a great year and want to minimize SE taxes by taking a smaller salary and larger distributions, vs a slower year where I might want more salary for better loan qualification purposes? Also wondering about the timing - if someone decides to make the S Corp election, is it better to do it at the beginning of their tax year, or can you elect mid-year and just prorate everything? Thanks to everyone who shared their experiences - this is exactly the kind of practical guidance you can't get from generic tax articles!

Worked at H&R Block for 7 years. One trick I've seen people use is to look at Schedule A (Itemized Deductions) instructions. It specifically mentions that you can deduct contributions to "A religious organization (church, synagogue, etc.)" without saying they have to be US-based. Some people deduct tithes to foreign religious organizations based on this language. Not sure if that helps with ICRC but thought I'd mention it.

I can add some clarity here from a tax preparer's perspective. The ICRC is actually one of the few foreign organizations that IS deductible for US taxpayers, but the confusion comes from their unique status. They're what's called a "Friends of" organization - they have legitimate US operations through the ICRC Washington Delegation office, which allows them to qualify for deductible donations despite being headquartered in Switzerland. This is different from most foreign charities that don't qualify. The key is that your donation needs to go to their US operations (which it does when you donate through their main website). The outdated 2014 information you found was from before they established their current US status. For future reference, Publication 526 has the official rules, but honestly for international donations, it's worth getting confirmation directly from the organization or the IRS rather than trying to interpret the complex rules yourself. The $350 donation to ICRC should be deductible on your Schedule A.

Your friend is definitely in a good position to claim those stimulus payments! I went through this exact process with my neighbor last year. One thing I'd add is to make sure they gather any W-2s or 1099s from 2021, even if they think their income was too low to require filing. The IRS sometimes has these on file already, and if there's a mismatch, it can delay processing significantly. Also, if they're expecting a large refund from multiple stimulus payments, consider having them set up direct deposit - paper checks for these late-filed returns can take even longer to arrive. The whole process took about 5 months for my neighbor, but she ended up getting over $3,000 in missed payments, so it was definitely worth the wait!

I'd definitely recommend starting this process soon! I work at a local tax prep office and we see this situation all the time. Your friend should gather their Social Security card, photo ID, and any income documents from 2021 (even if minimal). One thing people often overlook - if they received any unemployment benefits in 2021, there were special tax breaks for that too, so they might be eligible for additional refunds beyond just the stimulus payments. The IRS tends to be more thorough with first-time filers, so having complete documentation upfront will save headaches later. Also, make sure they keep copies of everything they mail since paper returns can sometimes get lost in processing. Good luck helping them navigate this - it's really great that you're stepping up to help someone get the money they're entitled to!

Just a quick warning based on my experience with amended returns - make sure you're checking the "Where's My Amended Return" tool regularly. I waited 8 months assuming they were processing my amendment, only to discover they never received it! Apparently it got lost in the mail and I had to resubmit everything. If you don't see your amendment showing up in their system after about 3 weeks, I'd recommend calling to confirm they received it or sending a follow-up copy via certified mail. Better to be paranoid than to find out months later they never got it and you're accruing more interest and penalties!

Great advice from everyone here! I went through a similar situation last year with a filing status error (filed Married Filing Separately when I should have filed Married Filing Jointly). A few additional tips from my experience: 1. Document everything - I kept copies of all correspondence, payment confirmations, and dates. This was crucial when I had to call the IRS later. 2. Consider setting up an online account with the IRS if you haven't already. It makes tracking your amended returns much easier than relying solely on the "Where's My Amended Return" tool. 3. When you do make that payment (which I'd recommend doing sooner rather than later), make sure to include a clear memo indicating which tax years the payment is for. I initially made a payment without specifying and it got applied to the wrong year, creating more confusion. The good news is that the IRS is generally reasonable when you voluntarily correct mistakes. In my case, they waived the accuracy-related penalty entirely since I caught and corrected the error myself. The interest was unavoidable, but stopping it from accruing further by paying early saved me several hundred dollars. Hang in there - the process is slow but you're handling it the right way!

I think the IRS intentionally makes these forms confusing lol. Has anyone had their Form 8802 rejected? How long did it take to get a response? I'm supposed to start a position in Korea in 6 weeks and I'm worried about timing.

I went through this exact same nightmare with Form 8802 about 6 months ago! For line 4a when you check "Individual," you literally just need to write your full name exactly as it appears on your most recent tax return - nothing more, nothing less. Don't add your SSN, don't add extra info, just your name. Since you're working for a Singapore company, make sure you're also including copies of your most recently filed 1040 and any relevant schedules (like Schedule C if you have any self-employment income). The IRS uses this to verify your U.S. tax residency status for the foreign tax authority. One tip that saved me - call the IRS practitioner priority line if you get stuck. The regular customer service line is useless, but the practitioner line (even though you're not technically a practitioner) sometimes gets you through to someone who actually knows about international forms. Good luck with your deadline!