This thread has been incredibly helpful! I'm in a similar situation as a Canadian citizen with a Delaware LLC (mistake on my part - should have gone with Wyoming!). Just wanted to confirm something based on what I'm reading here: if I'm providing digital marketing services to US clients entirely from my home office in Toronto, I would use W-8BEN-E and NOT claim any effectively connected income, correct? My services are performed 100% remotely with no US physical presence. Also, the Form 5472 requirement is news to me - I've been operating for 8 months and had no idea about this filing obligation. Is there any relief for reasonable cause if you genuinely didn't know about the requirement? That $25k penalty is absolutely terrifying for a small business owner. Thanks to everyone who shared their experiences - this is exactly the kind of real-world guidance that's impossible to find in IRS publications!

As someone who went through this exact same situation last year (UK citizen with US LLC operating from Thailand), I can confirm that W-8BEN-E is absolutely the correct form for your situation. The W-9 is only for US persons. One thing I'd add that hasn't been fully emphasized - make sure you understand the tax treaty benefits between the US and Paraguay. You may be able to claim reduced withholding rates or exemptions on certain types of income under the treaty. When filling out the W-8BEN-E, there's a section specifically for claiming treaty benefits that could save you money. Also, I'd strongly recommend getting familiar with your Paraguay tax obligations too. Even though you're not paying US income tax on this income (assuming it's not effectively connected), you'll likely need to report and pay tax on it in Paraguay as a resident there. The learning curve is steep but once you get the paperwork sorted with your first client, you can use the same documentation for future clients. Just make sure to keep your W-8BEN-E forms updated - they're generally valid for 3 years but certain changes in circumstances can invalidate them sooner.

Might be a dumb question but does taking online classes from your home country count as being "present in the US" for the substantial presence test? I was stuck in my home country during part of 2022 due to COVID but still enrolled in US university online.

Just wanted to add some clarity about the 5-year exempt period for F-1 students since there seems to be some confusion in the thread. The 5 calendar years start counting from the first year you were present in the US on F-1 status, regardless of how many days you were actually here. So for the original poster who first entered in 2019, your exempt years would be 2019, 2020, 2021, 2022, and 2023. This means 2024 would be your first year where days count toward the substantial presence test. However, since you were only present for about 240 days in 2024 (and this is your first countable year), you likely don't meet the substantial presence test yet and would still file as a non-resident alien using Form 1040NR. One important thing to remember: even as a non-resident alien, your US-source income (like your on-campus job) is still fully taxable. You'll report this on Form 1040NR, and depending on your home country's tax treaty with the US, you might qualify for certain exemptions or reduced tax rates.

One thing to remember that no one mentioned - if u don't have a business license and ur supposed to in ur city, the IRS might share info with local authorities which could lead to fines. Happened to my friend! Also don't forget about self-employment taxes (15.3%) on top of regular income tax. Those hit hard when ur not expecting them!

Great question! I was in a similar situation last year with my freelance graphic design work. The key thing to understand is that business expenses are deductible based on whether you're legitimately running a business, not whether you have a license. However, I'd strongly recommend getting that business license sooner rather than later. While it won't change your tax deductions, it protects you legally and shows the IRS you're serious about your business operations. Plus, at $23k in income, you're definitely past the "hobby" threshold. Make sure you're tracking that business use percentage accurately for mixed-use items like your laptop and internet. The IRS loves documentation, so keep detailed records of when and how you use these items for business. Also, don't forget to set aside money for self-employment taxes - they caught me off guard my first year! One last tip: consider opening a separate business bank account even without the license. It makes tracking expenses so much easier and creates a clear separation between personal and business finances.

I'm so sorry you're going through this - 130 weeks is absolutely outrageous! I just joined this community because I'm dealing with a similar nightmare with my 2021 amended return (currently at 92 weeks and counting). Reading through all the advice here has been incredibly helpful. The congressional inquiry route seems to be the most effective option based on the multiple success stories shared. What really struck me was @Roger Romero's explanation about how many 2021 amended returns got stuck in "suspended status" due to system changes in late 2022 - that perfectly explains why so many of us are dealing with these extreme delays for that specific tax year. I had no idea that congressional offices have direct IRS liaisons specifically for these types of issues. It's frustrating that we have to go through our representatives to get the IRS to do their basic job, but if it works, it works! I'm planning to contact my representative's office this week after seeing how well it worked for others here. The fact that @Roger Romero got results after 95 weeks gives me hope that even these really long delays can be resolved. @Genevieve Cavalier - please keep us posted on what approach you decide to try! Your situation could really help others who are stuck in the same boat. We shouldn't have to wait over 2 years for money we're legally owed. Hang in there!

I'm so sorry you're dealing with this incredibly frustrating situation - 130 weeks is absolutely unacceptable! After reading through all the excellent advice and success stories shared here, I'd strongly recommend starting with a congressional inquiry as your first step. Based on the experiences shared by multiple community members, this approach seems to have the highest success rate for these extreme delays. Contact your representative's local district office (not their DC office) and explain that you've been waiting 2.5 years for your amended return to process. They'll have you fill out a privacy release form, and their office has dedicated staff with direct IRS liaison contacts specifically for resolving these types of federal agency issues. What really stands out from everyone's stories is that these returns aren't actually "being processed" - they're stuck in various system limbo states. As @Roger Romero explained, many 2021 amended returns got caught up in system changes implemented in late 2022 and ended up in suspended queues that weren't being actively worked. Congressional inquiries force the IRS to manually locate and prioritize these stuck cases. You should also contact the Taxpayer Advocate Service at 1-877-777-4778 - after 130 weeks, you definitely qualify for their assistance due to excessive processing delays. Don't give up! $1,890 is a significant amount and you've already waited far too long. Please keep us updated on your progress - your experience could really help others facing similar delays. We're all rooting for you!

Just checking - have you contacted the original company that sponsored your H2B visa? They're the ones who are legally responsible for your employment, and they might not even know this "contractor" is handling things improperly. When I worked on an H2B at a resort, something similar happened, and when I contacted HR at the main company, they were horrified and fixed the situation immediately.

This situation is absolutely unacceptable and potentially illegal. As an H2B visa holder, you have specific legal protections that are being violated here. The fact that you're working through a "contractor" instead of your actual visa sponsor, receiving payments from various bank accounts, and getting payslips via WhatsApp are all major red flags indicating potential visa fraud and tax evasion. DO NOT provide your SSN for a 1099 - this would make you complicit in tax fraud since H2B workers must be W-2 employees with proper withholding. I'd recommend taking these immediate steps: 1) Contact the DOL's National H-2B Fraud Detection Unit at 1-866-4-USWAGE, 2) Report this to ICE since it involves visa fraud, and 3) Contact an immigration attorney who handles H2B cases. Document everything - those WhatsApp messages, payment records, and any communication about the 1099. This contractor setup is designed to avoid paying proper taxes and could jeopardize your visa status. Your sponsoring employer needs to be made aware immediately as they're legally responsible for ensuring you're properly employed and classified.