Has anyone done this through tax software instead of paper forms? I made the same mistake in TurboTax Business and wondering if I can just submit corrections through there or if I have to do paper forms.

I made this exact same mistake with my freelance writing LLC last year! The mismatch between your LLC name and personal SSN will definitely cause processing issues. You're right to be concerned about it. Here's what I learned from my experience: Yes, you need to send corrected 1099-NECs to all your contractors AND file corrections with the IRS. The good news is that since you're only dealing with 6 forms, it's very manageable. For the corrections, make sure to: 1. Check the "CORRECTED" box on each new 1099-NEC 2. Use your LLC's EIN in the payer's TIN field 3. Keep everything else exactly the same (amounts, contractor info, etc.) 4. Include a new Form 1096 when you mail the corrections to the IRS I sent my corrections within a week of realizing the mistake, and it all got processed smoothly. Your contractors will appreciate getting the corrected forms quickly so they don't have to worry about mismatched information when they file. Don't panic - this is fixable and more common than you think!

Have you considered the Medicare surtax implications? At your income level, you'll be subject to the additional 0.9% Medicare surtax on earned income above $250k (married). By taking $325k as salary and the rest as distributions, you're minimizing the income subject to this surtax. Also worth noting that all your income (both salary and distributions) will still be subject to the 3.8% Net Investment Income Tax for income above $250k married. So while you're saving on the FICA taxes for distributions, you're not escaping all the medicare-related surtaxes completely.

As someone who went through a similar decision process, I'd strongly recommend sticking with your S Corp setup. At your income level ($1.1M), the employment tax savings alone make it worthwhile. Here's a quick breakdown: With your proposed $325K salary, you'll pay Medicare/Social Security taxes on that amount. The remaining ~$613K in distributions (after your $32K expenses and $130K retirement contributions) will avoid the 15.3% self-employment tax that you'd pay if you were a sole proprietor, or the Medicare taxes you'd face on a W2. The employment tax savings on that $613K distribution should be around $9,400 (1.45% Medicare tax) plus the 0.9% additional Medicare surtax on amounts over $250K, which works out to roughly $12,700 in total Medicare tax savings. That's over $22K annually in tax savings, which easily covers your S Corp compliance costs and then some. Your $325K salary seems reasonable for a physician at your income level - not so low as to trigger IRS scrutiny, but not unnecessarily high either. Just make sure to document how you arrived at that figure using industry compensation data for your specialty and location. The key advantage isn't necessarily a lower overall effective tax rate, but rather avoiding employment taxes on a significant portion of your income while maintaining the same ordinary income tax treatment.

Don't forget that the standard deduction has increased substantially in recent years. For 2025, it's $14,600 for single filers and $29,200 for married filing jointly. Unless your total itemized deductions (including mortgage interest, HELOC interest, charitable donations, etc.) exceed these amounts, there's no tax benefit to tracking the HELOC interest. I learned this the hard way after meticulously documenting everything for my home addition only to have my tax preparer tell me it didn't matter because the standard deduction was higher anyway.

This is a really well-thought-out strategy! I've been considering something similar for my own renovation project. One additional tip I'd suggest is to set up a dedicated credit card just for the home improvement expenses if possible. This creates an even cleaner paper trail and eliminates any confusion about which charges were for the renovation versus personal expenses. Also, keep in mind that if you're doing the work in phases (kitchen first, then bathrooms), you might want to pay off each phase separately with your HELOC rather than letting everything accumulate on the card. This creates multiple clear connections between specific improvement costs and HELOC draws, which could be helpful if you ever face an audit. The points strategy is definitely smart - just make sure your credit limit can handle the full $35K if you're planning to charge everything at once. Some contractors also offer cash discounts that might offset the value of the points, so it's worth asking about that too.

One thing I'd add that hasn't been mentioned yet - make sure you're keeping detailed records of all your expenses and how you're allocating them. The IRS loves to audit mixed-use properties because the allocation rules can be complex and people often make mistakes. I'd recommend creating a simple spreadsheet showing: - Total property expenses by category - Your allocation percentages (75% rental, 25% personal for the base property, plus any adjustments for the roommate period) - The calculated amounts for each category Also, don't forget about depreciation on the rental portion of your property. That's often the biggest tax benefit for rental property owners, but it only applies to the business/rental use percentage of your property value (minus land value). For your roommate situation, I'd calculate it exactly like others mentioned - figure out what percentage of your unit they used, multiply that by your unit's percentage of the total property (25%), and apply that for the months they were there. Keep their rental payments and any receipts showing the space they occupied.

One additional consideration for your multi-unit property - make sure you understand the rules around the home office deduction if you're using any part of your personal unit for business purposes related to managing the rental property. Since you're living in one unit of a 4-unit building and managing rentals, you might be able to deduct a portion of your personal unit's expenses if you use a dedicated space exclusively for rental property management (like record keeping, tenant communications, etc.). This would be separate from your rental property allocations. Also, regarding your roommate situation - be careful about how you characterize those payments. If they were truly renting space from you with their own lease agreement, that's rental income. But if it was more of a casual roommate arrangement where they were just helping with expenses, the tax treatment might be different. The IRS looks at factors like whether they had exclusive use of space, length of stay, and formality of the arrangement. Keep good records of the square footage calculations others mentioned - having a simple floor plan sketch with measurements can be really helpful if you ever get questioned about your allocations.

One thing nobody mentioned - you need to get a Social Security number for your baby ASAP after birth to claim them on your taxes. The hospital will usually give you the paperwork to apply, but if not, you need to go to the Social Security office with the birth certificate. You absolutely cannot claim any child-related credits without their SSN.

Since you're expecting in July and will be working only 8 months this year, there's another important consideration - make sure you understand how your reduced income will affect your tax situation. With around $50k in actual earnings (8 months of $75k), you might qualify for the Earned Income Tax Credit (EITC) which phases out at higher incomes but could be significant with one child and lower income. Also, regarding your student loan interest - you can deduct up to $2,500 per year in student loan interest payments, and with $3,500 in payments annually, this could be a nice deduction. Just make sure you get the 1098-E form from your loan servicer. For your FSA question - you can't double-dip on medical expenses. If your FSA covered something, you can't also claim it as a medical expense deduction. But any out-of-pocket costs beyond what FSA covers could potentially be deductible if you itemize and they exceed 7.5% of your AGI. One more tip - keep detailed records of everything related to childcare payments to your aunt. You'll need her SSN, receipts, and documentation that this is legitimate childcare (not just family help) to claim the Child and Dependent Care Credit. This credit can be up to $1,050 for one child under 13.