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I've been using QuickBooks for payroll with ITIN employees and it handles them just fine. You just enter the ITIN in the SSN field when setting up the employee profile. The system treats it the same as an SSN for tax calculations and reporting. One tip - make sure to double-check that the ITIN format is correct (9XX-XX-XXXX) before submitting any payroll reports. I had one instance where I accidentally transposed numbers and it caused issues with my quarterly filing. Also, keep copies of their ITIN documentation in their employee files. During my state audit last year, they specifically asked to see proof of the ITINs I had reported. Having the official IRS letters made that process much smoother. For state reporting, I haven't had issues in my state (Texas), but I've heard some states can be pickier about the format. It's worth calling your state's employer services line to confirm their requirements before your first filing.
This is really helpful information about QuickBooks! I'm actually considering switching from our current manual payroll system to QuickBooks, especially now that we're potentially hiring someone with an ITIN. Does QuickBooks automatically handle the tax withholdings correctly for ITIN employees, or do you have to manually adjust anything? Also, when you mentioned keeping copies of ITIN documentation - do you mean the original IRS letter that was sent to the employee when they received their ITIN?
Yes, QuickBooks handles tax withholdings automatically for ITIN employees just like it does for SSN employees. You don't need to make any manual adjustments - the system calculates federal income tax, state tax, Social Security, and Medicare withholdings based on their W-4 information and pay amount. The only difference is that you're entering their ITIN instead of an SSN in the employee setup. Regarding documentation, yes - keep a copy of the official IRS letter (called an ITIN Assignment Notice) that shows their assigned ITIN. Some employees might also have an ITIN card, which is acceptable too. The key is having official IRS documentation that proves the ITIN is legitimate. Don't accept handwritten numbers or unofficial documents. During audits, tax authorities want to see that you verified the ITIN through proper IRS documentation before using it for payroll reporting.
Just wanted to add one more important point that I learned the hard way - make sure you understand the difference between expired and valid ITINs. ITINs can expire if they haven't been used for tax filing in recent years, and the IRS has been deactivating unused ITINs. If your potential employee's ITIN has expired, they'll need to renew it before you can use it for payroll purposes. You can check if an ITIN is still valid by looking at the IRS letter - it should show the issue date and any expiration information. An expired ITIN will cause problems when you try to file your quarterly reports. I had an employee whose ITIN had expired without them realizing it, and we had to hold off on their start date until they could get it renewed through the IRS. The renewal process can take several weeks, so it's worth checking this early in your hiring process. The employee will need to file Form W-7 with supporting documentation to renew an expired ITIN. This might be worth verifying with your candidate before making a final hiring decision, just so there are no surprises that could delay their employment start date.
This is such an important point that I wish I had known earlier! I'm currently going through this exact situation with a potential hire. When you say the renewal process takes several weeks, do you have any idea how long exactly? I'm trying to figure out if we should wait for this candidate or keep looking for other options. Also, is there any way to speed up the ITIN renewal process, or do you just have to wait for the IRS to process it in their own time?
From my experience, the ITIN renewal process typically takes 7-11 weeks, though it can be longer during peak tax season (January through April). Unfortunately, there's no way to expedite the process - the IRS processes renewals in the order they receive them. One thing your candidate can do is check the status of their renewal application online using the IRS's "Where's My Amended Return?" tool, though it's not always updated in real-time. They'll need their SSN or ITIN, date of birth, and ZIP code from their application. If you really want to hire this person and can afford to wait, I'd suggest being upfront about the timeline. In my case, I was able to work with the candidate to set a tentative start date about 10-12 weeks out, which gave us buffer time for processing delays. We stayed in touch throughout the process and it worked out well. Just make sure to get confirmation that they've actually submitted the renewal application (they should have received a receipt from the IRS) before committing to wait. Without that proof, you're essentially waiting on something that may not even be in progress.
Random question - are there any benefits to filing taxes as a student even with no income? I heard something about it helping with credit scores but that sounds like BS to me lol
Filing taxes has zero direct impact on your credit score. Credit bureaus don't even look at your tax returns. However, having tax returns can be helpful documentation when applying for larger loans like mortgages later on. Lenders sometimes want to see a history of tax returns, even for years with little/no income, to verify your financial history. But that's for major loans years down the road, not your regular credit score.
Based on what everyone's shared here, it sounds like you're not required to file since you have no income, but you might actually benefit from filing anyway! Even with just that one community college class, you could potentially claim the Lifetime Learning Credit for the tuition you paid. The credit is worth up to 20% of qualified education expenses (up to $2,000 max), so if you spent money on tuition, books, or required fees, you might get some of that back. Since you mentioned you're 33, you're definitely eligible regardless of how many classes you're taking. Also, just a heads up - if you ever need to prove your income status for financial aid or other programs, having a filed return (even showing $0 income) can be really helpful documentation. Some schools and government programs prefer actual tax returns over just verbal statements about not having income. Florida doesn't have state income tax, so you'd only need to worry about federal. Might be worth running the numbers to see if filing would get you any money back!
This is really helpful advice! I'm actually in a pretty similar situation - 29, taking classes part-time at a community college, and wasn't sure if I should bother filing. I paid about $800 in tuition last semester and had completely forgotten about education credits being available for part-time students. Quick question though - do you know if the Lifetime Learning Credit applies to just tuition or can it include textbooks and supplies too? I probably spent another $200-300 on books and lab materials that were required for my classes. Also wondering if there's any downside to filing when you don't have to? Like does it put you "on the radar" somehow or create any complications for future years?
Just wanted to add another perspective here - I've been doing my own S Corp taxes for the past 4 years and have tried several of the software options mentioned. One thing that really helped me was understanding that the IRS has free fillable forms online that you can use for Form 1120-S if you're comfortable with tax forms. It's not as user-friendly as commercial software, but it's completely free and gets the job done. That said, if you do go the software route, I'd strongly recommend avoiding any program that doesn't specifically market itself as handling S Corp returns. The nuances around reasonable compensation, built-in gains, and pass-through calculations are too important to mess up with generic business software. Also, don't forget that as an S Corp, you'll need to file quarterly payroll taxes (941s) if you're paying yourself a salary, which is separate from the annual 1120-S filing. Make sure whatever solution you choose accounts for that ongoing compliance requirement too.
Thanks for mentioning the free fillable forms option! I'm pretty comfortable with tax concepts but hadn't considered going that route. Quick question - when you use the IRS free fillable forms for the 1120-S, how do you handle the K-1 generation? Does it automatically create those based on your inputs, or do you have to fill out separate K-1 forms manually? Also, you're absolutely right about the quarterly 941s - I've been handling those through my payroll service but it's good to remember that's an ongoing requirement separate from the annual filing. For someone just starting to self-prepare S Corp returns, would you recommend beginning with software and then potentially moving to free fillable forms once more comfortable with the process?
The IRS free fillable forms do require you to manually prepare the K-1s - they don't auto-generate them like commercial software does. You'd fill out separate Schedule K-1 forms for each shareholder (just yourself in your case). It's definitely more work, but if you're comfortable with the concepts it's totally doable. I'd actually recommend starting with software for your first year or two of self-preparation, then potentially moving to free fillable forms once you're familiar with the process. The software will help you understand the flow and relationships between different parts of the return. Plus, the K-1 generation alone probably justifies the software cost for most people - those forms can be tricky to get right manually. One other thing to consider: if you do use free fillable forms, make sure you're printing and keeping good records of everything. The software options usually provide better documentation and audit trails, which can be helpful if you ever get questioned by the IRS.
For what it's worth, I've been using TaxAct Business for my S Corp for the past two years and it's been solid. The interface is specifically designed for business returns and handles all the S Corp complexities well - reasonable compensation calculations, K-1 generation, the whole nine yards. One thing I learned the hard way is that you really do need to make sure your salary is "reasonable" for your industry and role. The IRS scrutinizes S Corps specifically for this, and last year I got a notice asking for documentation about how I determined my salary amount. Having good software that walks you through this calculation with industry benchmarks was super helpful. Also, just a heads up - if you're doing payroll yourself for your S Corp salary, make sure you're staying on top of your quarterly deposits. I use Gusto for payroll which integrates nicely with my accounting software and handles all the quarterly filings automatically. It's an extra cost but saves me from having to worry about missing deadlines or calculating payroll taxes wrong.
This is really helpful insight about the reasonable compensation scrutiny! I'm curious - when you got that IRS notice about salary documentation, what kind of information did they want to see? I'm trying to make sure I'm setting myself up correctly from the start. Did you have to provide industry salary surveys or just explain your reasoning? Also, thanks for mentioning Gusto - I've been doing my payroll manually through the IRS website and it's been a pain keeping track of all the quarterly deadlines. How much does something like Gusto typically cost for a single-employee S Corp? I'm trying to weigh the convenience against the additional expense, especially since I'm already trying to save money by doing my own tax prep.
I've been following this thread and wanted to add a few practical tips that might help with your Form 8802 submission! Regarding the faxing question - you don't need a special cover sheet when faxing Form 8802. Just make sure your contact information is clearly legible on the form itself, especially your phone number and email. The IRS fax number for international forms is (855) 215-1627. One thing I learned the hard way: if you're requesting certification for multiple years (2024 and 2025), make sure you write both years clearly on Line 7 separated by a comma, like "2024, 2025" rather than using ranges or abbreviations. The IRS processors are very literal about how this information is interpreted. Also, since your employer is requesting this for a March start date, you might want to include a brief cover letter explaining the employment situation and timeline. While this won't guarantee expedited processing, it can help the reviewer understand the context if there are any questions about your request. Keep copies of everything you submit and consider using a fax service that provides delivery confirmation so you know it was received. The last thing you want is to find out weeks later that your fax didn't go through properly! Good luck with your application - sounds like you've got a solid plan now thanks to all the great advice in this thread! π
Thanks @Austin Leonard for those practical details about the faxing process! The specific fax number and formatting tips for Line 7 are really helpful. I wanted to add one more consideration that might be relevant for @Skylar Neal s situation.'Since you mentioned your employer is overseas and requesting this for March, you might want to check if they need any apostille or authentication on the Form 6166 certificate once you receive it from the IRS. Some countries require additional certification steps for foreign government documents to be legally recognized. This doesn t affect'your Form 8802 application, but it s worth'asking your employer now since apostille processing can take additional time usually 1-2 (weeks through the State Department . Better)to know this requirement upfront rather than discover it after you get your certificate back from the IRS! Also echoing everyone s advice'about requesting both 2024 and 2025 - that approach saved me from having to reapply when my employer s legal'team decided they needed a different year than what HR originally told me. The extra coverage is definitely worth it given the processing time involved.
Just wanted to add another perspective on the Line 7 confusion since I recently went through this process for a job in Canada. The key insight that helped me was realizing that Form 8802 is essentially asking the IRS to vouch for your US tax resident status for specific time periods - it's not about which year you filed taxes, but which years you need the certification to cover. Since you're starting work in March 2025, your employer will likely need certification that covers the period when you'll be claiming treaty benefits or having taxes withheld. Following everyone's excellent advice about requesting multiple years, I'd definitely go with "2024, 2025" on Line 7. One additional tip: when I submitted mine, I included a brief note explaining that I was requesting certification for employment purposes starting in March 2025. While this isn't required, it seemed to help because my Form 6166 came back with language that specifically referenced treaty benefits for employment income, which made it easier for my employer's payroll team to process. The processing time is definitely the biggest challenge - I submitted mine in early December for a February start date and it took exactly 7 weeks. Given your timeline, getting it submitted ASAP (preferably by fax) is crucial. The multi-year approach gives you the flexibility to handle whatever your employer's specific requirements turn out to be. Good luck with the new job and the Form 8802 process! π
Thank you @Oliver Schulz for sharing your Canada experience! That s'a really smart tip about including a brief note explaining the employment context - I hadn t'thought about how that might help the IRS processor understand what type of language to include on the Form 6166 certificate. Your timeline example is actually really helpful for planning purposes. 7 weeks from early December to February means if I submit by fax this week, I should hopefully have the certificate by late February/early March, which would just barely work for my timeline. I m'definitely going to follow everyone s'advice and request both 2024 and 2025 on Line 7. It sounds like the consensus is clear that this gives maximum flexibility without any additional cost or risk. One last question for the group - has anyone had experience with the IRS rejecting applications for minor formatting issues on Line 7? I want to make sure I write 2024, "2025 exactly" as suggested and don t'accidentally use something like 2024-2025 "that" might cause problems. After reading about all the potential delays, I m'probably being overly paranoid about getting every detail perfect! π
Misterclamation Skyblue
Code 806 is withholding credit (taxes taken from your paychecks) and code 768 is Earned Income Credit. Both are in your favor! Since these have a date and you already got a on 3/9/22, this likely means additional were applied to your account. Watch for code 846 ( issued) - that's when you'll know if another payment is coming. The sometimes processes adjustments or additional after the initial refund, so this could be good news for you!
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Omar Hassan
β’This is super helpful! I've been seeing similar codes on my and was totally confused. Quick question - about how long does it usually take for the 846 code to show up after you see these credit codes? I'm in the same boat where I got my initial months ago but now seeing these newer dated entries. Fingers crossed it means more money coming! π€
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Evan Kalinowski
β’Hey @Omar Hassan, from what I've seen in this community, the timing can vary quite a bit. Sometimes the 846 code shows up within a week or two of the credit codes, but it can take longer depending on processing times. I'd check your weekly - the 846 code usually appears first, then the actual deposit hits your account 1-3 business days later. Keep us posted on what you see! Really hoping you both get that extra soon! π€
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Zainab Ibrahim
Hey Winter! Those codes are actually good news - you're getting additional credits! Code 806 is your withholding credit (federal taxes taken from paychecks) and 768 is the Earned Income Credit. Since you already got a on 3/9/22 and these codes show 4/15/22, it means the processed additional for you after your initial refund. Keep checking your for code 846 - that's the " issued" code that will show when your additional is being sent. Usually takes 1-2 weeks after these credit codes appear, but timing can vary. You should be getting more money soon! π°
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