Just wanted to add one more thing that caught me off guard with my ISO disqualifying disposition - make sure you keep really detailed records of everything! The IRS might send you a letter asking about the discrepancy between your 1099-B and what you reported. I got a CP2000 notice about 8 months after filing because the IRS computer system saw my 1099-B showing a $4,920 gain but my tax return only showed capital gains of $2,452. Even though I reported everything correctly (bargain element as other income, adjusted cost basis), their automated system flagged it. I had to send back a response letter explaining the ISO tax treatment with copies of my exercise documentation, grant agreement, and a detailed calculation showing how I split the income. It all got resolved, but it was stressful for a few weeks. Having all your docs organized from the start makes responding to any IRS questions much easier!

This is exactly the kind of detailed ISO discussion that helps so many people! Just want to emphasize one crucial point that might save others some headaches: when you report the bargain element as "Other Income" on Schedule 1 Line 8z, make sure your description is crystal clear. I recommend using something like "ISO disqualifying disposition bargain element - shares exercised 10/2023, sold 7/2024" rather than just "ISO bargain element." The more specific you are about the timing, the easier it is for the IRS to understand why this income isn't on your W-2. Also, for anyone in a similar situation - if your employer uses a stock administration platform, definitely reach out to them before filing. Sometimes they can issue a corrected 1099-MISC or supplemental wage statement that makes everything cleaner than the manual "other income" route. It's worth a phone call to see if they can properly report it as compensation income, even if it takes a few extra weeks to get the corrected documents. The approach everyone's outlined here is absolutely correct for handling it yourself, but getting the employer to fix it properly can sometimes prevent future IRS correspondence altogether.

This thread is absolutely fantastic - I wish I had found information this clear when I was navigating EFIN requirements as a new preparer! The misinformation problem is so real. I actually had a similar experience where I was told conflicting information by different IRS representatives. What strikes me most is how @DeShawn Washington, @Oliver Schmidt, and @Ravi Patel have provided such specific, actionable guidance based on their actual experiences. The detail about selecting "Legal Resident Alien" vs "Non-resident Alien" in the dropdown is exactly the kind of practical tip that can make or break an application. @LunarEclipse - I really hope you're following this thread! It sounds like you can move forward with your own EFIN application and avoid all the complicated business partnership scenarios that were being discussed earlier. The consensus from people who've actually done this successfully as permanent residents is pretty clear. For anyone else reading this who might be in a similar situation: save this thread! The combination of official publication references (@CosmicVoyager citing Publication 3112) and real-world application experiences makes this an incredibly valuable resource. It's exactly this kind of community knowledge-sharing that makes the difference between success and unnecessary complications when starting a tax prep business.

Wow, this thread has been absolutely incredible to read through! @LunarEclipse - I hope you're still following along because it looks like your whole problem just got solved! The fact that multiple people here have successfully gotten EFINs as permanent residents completely changes your situation. What really stands out to me is how this discussion evolved from exploring complex family business arrangements and contractor relationships to discovering that you can likely just apply directly yourself. @CosmicVoyager's citation of Publication 3112 was the game-changer, and then @DeShawn Washington, @Oliver Schmidt, and @Ravi Patel provided the real-world validation with their actual application experiences. The practical tips are gold - especially the dropdown selection detail and the document requirements. It's honestly concerning how much misinformation is floating around, even from IRS reps themselves! As someone just getting started in tax prep myself, I'm saving this entire thread as a reference. The combination of official IRS publication citations and detailed first-hand experiences makes this an invaluable resource. Plus all the backup strategies and tools people mentioned (like taxr.ai for compliance analysis and Claimyr for IRS communication) give great options for various situations. Thanks to everyone who contributed their knowledge here - this is exactly what makes this community so valuable for newcomers like us!

Another thing to consider is state taxes. Some states don't conform to the federal QBI deduction at all. I live in California and they don't allow the QBI deduction on the state return, so I end up paying more state tax than I initially expected from my PTP investment. Make sure you understand how your state handles QBI from PTPs before you make investment decisions based on the tax benefits.

This is a really comprehensive discussion! I just wanted to add one more point that might be helpful for anyone dealing with PTPs and QBI. Make sure to check if your PTP issued any amended K-1s throughout the year. PTPs are notorious for issuing corrected K-1s sometimes months after the original, and this can significantly impact your QBI calculation. I learned this the hard way when I filed early one year only to receive an amended K-1 in March that changed my QBI amount by over $3,000. Also, if you have multiple PTPs, remember that you aggregate all PTP income/losses together in Part II of Form 8995 - you don't list each PTP separately. The form instructions make this clear but it's easy to miss if you're rushing through it. For Connor's original question about the $14,500 QBI - that sounds like a solid amount that should give you a nice deduction. Just double-check that the K-1 specifically identifies it as "qualified business income" and not just ordinary income, since PTPs can generate both types.

Pro tip: if you call FreeTaxUSA directly and explain what happened, they will often refund the state preparation fee. I accidentally paid but didn't file last year (was comparing prices between services), and they gave me a full refund when I explained the situation. Their customer service is actually pretty good compared to most tax prep companies. I think their number is 1-800-585-3926 or something like that. Just be super nice and explain you didn't understand you were being charged without filing.

I had almost the exact same thing happen to me with FreeTaxUSA last year! The key thing to understand is that they charge you for the "preparation" service as soon as you agree to pay, even if you haven't actually filed yet. It's definitely confusing because most people think the charge happens when you submit. Since you can see "Ready to file" in your account, your taxes definitely haven't been submitted to the IRS yet. You have two options: 1) Go ahead and e-file since you've already paid for the preparation, or 2) Print the forms and mail them yourself (but you won't get the $14.99 back). I'd recommend just e-filing at this point since you've already paid and it's much faster than mailing. But for next year, definitely look into the IRS Free File program since you qualify based on your income - it would have saved you that $14.99 completely.

Slightly different perspective - before you panic completely, have you tried checking your return against free tax software just to verify if there are actual errors? I've used FreeTaxUSA for years and it's super straightforward. You could input all your info there and see if the numbers match up with what the Fiverr person gave you. This way you'd know for sure if you're being overcharged on taxes due to missing deductions. It might take an hour or two, but it would give you peace of mind before you potentially pay someone else to redo everything.

I'm dealing with a similar back tax situation right now and your story is giving me major anxiety! One thing I've learned through this process is that you absolutely cannot file returns with known errors - it can actually make your situation with the IRS worse, not better. The missing preparer signature is a huge red flag. Any legitimate tax professional should be willing to sign their work. If she's refusing to do that, it suggests she either knows there are problems with the returns or she's not actually qualified to prepare them. For the advertising deductions specifically - those can make a massive difference in what you owe. If she left those off completely, you could be overpaying by hundreds or even thousands of dollars. Given that you're already dealing with back taxes, every dollar counts. I'd give her 24-48 hours to respond and fix everything. If she doesn't, cut your losses and find a local CPA or enrolled agent. Yes, it'll cost more upfront, but it's way cheaper than dealing with IRS penalties later if the returns are wrong. The peace of mind alone is worth it when you're trying to get right with the IRS. Also, definitely keep all your communications with her in case you need to file a complaint later. Good luck!