Has anyone actually had an audit where the IRS questioned ISO reporting? I'm in a similar situation with a small spread and FreeTaxUSA, and I'm wondering if I should even bother with all this if the AMT is zero anyway.

I've been through this exact scenario with FreeTaxUSA and ISOs multiple times. The key thing to understand is that even with a small spread like $2,300, you absolutely should enter it properly to avoid potential issues down the road. Based on my experience, FreeTaxUSA does have the functionality to handle ISO reporting, but it's not as intuitive as TurboTax's dedicated ISO section. Tyler's navigation path is spot on - Federal → Income → Other Income → Other Tax Preference Items is where you'll find it. Here's what I'd recommend for your questions: 1) You technically could calculate Form 6251 separately and attach it to your FreeTaxUSA return, but this creates inconsistencies and potential red flags. It's much cleaner to let FreeTaxUSA generate it automatically once you enter the ISO data correctly. 2) Even if your AMT is zero, you should still file Form 6251 when you have preference items like ISO spreads. This establishes your AMT basis for the shares, which becomes crucial when you sell them later. Without proper documentation, you could end up paying tax twice on the same income. The IRS receives a copy of your Form 3921, so they know about your ISO exercise. If they don't see corresponding AMT reporting on your return, it can trigger questions later. Better to be proactive and document everything properly from the start.

6 Question for anyone who's done this - do you need a special type of solo 401k plan to make employer contributions? My financial advisor set up my solo 401k last year but never mentioned anything about employer matching. Do I need to change my plan?

14 As a newcomer here but someone who went through this exact decision process last year, I can confirm that maxing out both employee and employer contributions to your solo 401k is absolutely the way to go for tax efficiency. What helped me understand this was breaking down the numbers: if I took $25,000 as an S-corp distribution to invest in a taxable account, I'd pay income tax on that $25,000 first (let's say 22% = $5,500), leaving me with $19,500 to invest. Then I'd pay taxes annually on dividends and capital gains. But if I make that same $25,000 as an employer contribution to my solo 401k, it reduces my S-corp's taxable income dollar-for-dollar, meaning I save that entire $5,500 in taxes upfront. Plus the money grows tax-deferred. The only real consideration is liquidity - make sure you have adequate emergency funds in accessible accounts first. But for retirement savings specifically, the 401k route beats taxable investing by a wide margin when you run the math.

Be super careful with any ERC filing right now! The IRS announced last month they're auditing these claims like crazy because of all the fraud. My brother's construction company used one of those "ERC specialists" that advertise everywhere, paid them 25% of the expected refund, and now he's under audit and might have to pay everything back WITH penalties. Make sure whoever helps you is looking at real eligibility, not just trying to get you to file. The rules are complicated - it's not just "did you stay open during the pandemic.

As someone who just went through this process for my small retail store, I'd strongly recommend getting a second opinion before committing to any of those fee structures you mentioned. The 30% contingency fee is definitely excessive, and the $8,000 upfront seems way too high for a 14-employee restaurant. What worked for me was first using a service to verify eligibility before paying anyone big fees. I spent about $200 to get a detailed analysis of whether we actually qualified, which saved me from potentially wasting thousands on a claim that might not hold up. Once I knew we legitimately qualified, I worked with a local CPA who charged a flat $2,800 fee to prepare and file everything. The key is making sure you have solid documentation showing how government orders specifically impacted your restaurant operations. Indoor dining restrictions would likely qualify you under the "partial suspension" test, but you need to document exactly which orders affected you and when. Don't rush into anything - the IRS is being very strict about ERC claims right now, so getting it right the first time is crucial.

This is such a timely discussion! I'm currently dealing with a wage repayment situation from 2022 where I had to return about $9,200 to my former employer. Like many others here, I figured out the federal and state tax deduction parts, but the FICA piece has been confusing. Reading through everyone's experiences, it sounds like I should definitely try contacting my former employer's payroll department first before going the Form 843 route. I'm a bit nervous about that conversation since our relationship wasn't great when I left, but if they can benefit from recovering their matching portion, maybe they'll be more willing to help. One question I haven't seen addressed - if you do get the FICA refund directly from your employer, do you need to report that anywhere on your current year's tax return? Or is it just a separate transaction that doesn't affect your taxes? Want to make sure I handle everything correctly if I'm lucky enough to get cooperation from them. Thanks to everyone who's shared their experiences here - this thread has been more helpful than hours of googling!

I just wanted to add something that might help others in similar situations - make sure you keep copies of EVERYTHING related to your wage repayment. I learned this the hard way when I had to file Form 843 for my FICA refund. The IRS asked for additional documentation that I hadn't thought to save initially, including the original pay stubs from when I first received the wages, bank records showing the actual repayment transaction, and even correspondence with my former employer about the repayment arrangement. Also, if anyone is dealing with a situation where they received wages in one state but had to repay them while living in a different state, there can be additional complications with state tax treatment that might affect your overall refund calculations. I ended up having to file amended state returns in both states to get everything sorted properly. The whole process took about 6 months from start to finish, but I eventually recovered about $1,100 in FICA taxes that I would have lost otherwise. It's definitely worth pursuing even if it seems complicated at first!

Everyone's giving good advice about claiming a domestic partner, but don't forget to consider the future! When your partner finishes law school and starts working, your tax situation will change dramatically. My wife and I were in the same boat (I supported her through med school), and we actually ended up paying MORE in taxes after marriage because of the marriage penalty when both people have good incomes.

Just wanted to chime in as someone who works in tax preparation - you're on the right track! Based on your description, your domestic partner would likely qualify as a "qualifying relative" dependent. The key things to document are: 1. Keep receipts for all the expenses you're paying (rent, utilities, groceries, phone, insurance) 2. Get a statement of his total student loan disbursements for the year 3. Track any income he earns from tutoring or other sources Since you mentioned he only makes about $2,500 from tutoring and the loans only cover tuition/books while you handle all living expenses, you should easily meet both the income test (under $5,000) and the support test (you're providing more than 50% of total support). One thing I always tell clients - calculate the actual dollar amounts to be sure. Add up everything: tuition, books, rent, food, utilities, transportation, clothing, medical expenses, etc. Then make sure your contributions are more than half of that total. It sounds like they definitely are, but having the numbers documented will give you confidence and protection if questions ever arise. The dependent exemption can be a significant tax benefit, so it's worth claiming if you qualify!