I've been using FreeTaxUSA for the last 3 years and it's WAY better than TurboTax. Federal filing is completely free no matter how complicated your taxes are, and state is only $15. No hidden fees or upsells constantly popping up. TurboTax tried to charge me $120 for self-employment income the year before I switched. FreeTaxUSA handled my Schedule C, home office deduction, and mileage tracking for $0. The interface isn't as pretty but it works perfectly.

I switched from TurboTax to FreeTaxUSA last year after getting hit with unexpected fees, and honestly I wish I'd done it sooner. What really sealed the deal for me was when I discovered that TurboTax was actually steering people AWAY from the IRS Free File program that they were supposed to be promoting. I have a pretty straightforward return - W-2, some investment income, and standard deductions - but TurboTax wanted to charge me $60 for "premium" features that turned out to be completely unnecessary. FreeTaxUSA handled everything for free and the final return was identical to what I would have gotten with TurboTax. The customer service at FreeTaxUSA is also surprisingly good. When I had a question about reporting some stock sales, I got through to a real person in about 10 minutes and they walked me through it without trying to upsell me anything. It's honestly criminal how TurboTax has convinced people they're the "gold standard" when there are legitimate free alternatives that work just as well.

This thread has been incredibly helpful! I'm in a similar situation with my S Corp and was actually leaning toward the contractor approach until reading all these responses. The consensus is crystal clear - it's not worth the audit risk and actually defeats the purpose of having an S Corp structure. What strikes me most is how this seems like it should be a viable option on the surface, but the tax code and IRS guidance make it clear that owner-employees can't simply reclassify themselves as contractors to avoid payroll taxes. The whole reasonable compensation requirement exists specifically to prevent this kind of arrangement. I think the key takeaway for anyone considering this is that the S Corp tax advantages come from the proper balance of salary and distributions, not from trying to work around the employment relationship. Better to stay compliant and optimize within the established framework than risk penalties and back taxes from an audit.

Great discussion everyone! As someone who's been through multiple IRS audits with my S Corp, I can confirm that owner-contractor arrangements are absolutely a red flag they look for. During my last audit in 2022, the agent specifically asked about my compensation structure and whether I had ever tried to pay myself as a contractor. What many people don't realize is that the IRS has gotten much more sophisticated in detecting these arrangements through automated screening systems. They can easily cross-reference your 1120S with your personal return to spot inconsistencies in how you're reporting income from your own corporation. The "reasonable compensation" requirement isn't just a suggestion - it's mandatory for any S Corp owner who provides services to their business. The penalty for getting this wrong isn't just back taxes, it's also interest and potential fraud penalties if they determine you were deliberately trying to avoid payroll taxes. Stick with the tried-and-true approach: take a reasonable W-2 salary for the services you provide, then take additional profits as distributions. It's compliant, defensible, and gives you the tax benefits you're looking for without the audit risk.

As someone who just finished their second tax season, I can offer some perspective on starting out. I went with Drake after agonizing over the same decision and it was the right choice for me. The key thing is that Drake's automation really shines when you're handling the volume you're expecting (50-200 clients). Yes, there's a learning curve, but honestly it's not that steep if you take advantage of their training resources. They have webinars specifically for new users and the documentation is solid. For your assistants, I'd recommend having them focus on one type of return at first (like basic 1040s) until they get comfortable with the interface. Drake's consistency across different return types actually makes training easier once they understand the basic workflow. One tip - definitely take advantage of Drake's free trial period to test it out with some practice returns before committing. That way you and your team can get a feel for the interface before tax season hits. The time you invest in learning it upfront will pay dividends when you're in the thick of filing season. Budget-wise, when you factor in the time savings from automation, Drake usually comes out ahead even if the upfront cost is slightly higher.

I've been using Drake for about 5 years now and can definitely vouch for it being a solid choice for new practices. One thing I'd add to the conversation is that Drake's diagnostic system is incredibly helpful when you're starting out - it catches errors and missing information that might slip by when you're still learning the ins and outs of tax preparation. For your business returns (1120s and LLCs), Drake handles depreciation schedules and multi-state filings really well, which could be important as your practice grows. The built-in calculators for things like Section 199A deductions are also a huge time-saver. Regarding training your assistants, I'd suggest starting them on the data entry for simple 1040s first, then gradually introducing more complex returns. Drake's interview-style input makes it pretty intuitive - it asks the right questions in the right order, which helps prevent mistakes. One cost consideration that hasn't been mentioned yet is that Drake includes unlimited amendments in their pricing, while some other software charges extra for each amended return. As a new preparer, you might find yourself filing a few more amendments than expected in your first year, so this could save you money. The customer portal feature is also great for client communication - clients can securely upload documents and review their returns online, which reduces back-and-forth emails and phone calls.

I found another key difference - timing. Bank account bonuses typically require you to keep money deposited for a certain period (like 90 days), which is why it's considered interest - you're being paid for the use of your money over time. Credit card rewards are instant - you make a purchase and get the reward immediately as a percentage back. Makes it clearer why the IRS views them differently.

This is such a common confusion and you're definitely not alone in being surprised by those 1099-INT forms! I went through the same thing last year with a Bank of America bonus. The key thing to understand is that the IRS looks at the underlying economic substance of these transactions. When you get a bank account bonus, you're essentially being paid interest for allowing the bank to use your deposited funds - even if it's just the minimum amount to keep the account open. That's why it's reported as interest income on Form 1099-INT. Credit card rewards are fundamentally different because they're tied to your spending activity. When you get 2% cash back on groceries, the IRS views this as you effectively paying 98% of the original price, not as you receiving separate income. It's a price adjustment, not compensation. For your $700 in bank bonuses, yes, you'll need to report this as taxable income on your return. The good news is that if you're in a lower tax bracket, the actual tax owed might not be too painful. Just make sure to keep those 1099-INT forms for your records!

I'm currently going through this exact same 5071C verification nightmare and it's beyond frustrating! Got my letter about 2 weeks ago and that 1-800-830-5084 number is completely unreachable - just immediate disconnects every single time, no matter when I call. Reading through everyone's experiences here has been both validating and incredibly helpful. I was making the classic mistake of just obsessively calling that broken verification line over and over. Now I'm implementing the multi-strategy approach that seems to actually work: 1) Continuing the 7am EST sharp calling strategy (set 4 alarms because I'm not a morning person!) 2) Successfully scheduled a TAC appointment for next Tuesday by calling 844-545-5640 around 2pm (took about 30 redials but finally got through) 3) Contacted TAS yesterday since I need my $1,650 refund for upcoming childcare expenses - they said they'd review my case within 3 business days The call logging tip from multiple people here has been a total game-changer for my mental health. At least I can see I'm making consistent progress instead of just feeling like I'm screaming into the void. It's absolutely insane that we all have to become amateur IRS strategists just to verify our own identities and get our legitimate refunds. This system is clearly broken when dozens of us are sharing identical horror stories about the same unreachable number. Thanks to everyone sharing real solutions that actually work - this community has been more helpful than the entire IRS phone system!

I'm currently dealing with this exact same 5071C nightmare! Just got my letter yesterday and seeing all these experiences has been both terrifying and oddly reassuring - at least I know I'm not alone in this bureaucratic maze. After reading through everyone's strategies, I'm definitely not going to waste time just calling that verification number repeatedly like I was planning to do. Instead, I'm going to implement the multi-pronged approach that seems to actually work: 1) Try the 7am EST calling strategy (already set 3 alarms for tomorrow morning) 2) Call 844-545-5640 this afternoon around 2-3pm to schedule a TAC appointment 3) Start documenting everything in a call log to maintain my sanity 4) Consider TAS if I can't get resolution soon since I need my $1,400 refund for rent It's absolutely ridiculous that we all have to become IRS navigation experts just to get our own legitimate refunds, but I'm grateful this community exists to share real solutions. The fact that so many people are dealing with the identical problem of that unreachable verification number really shows this is a systemic failure, not just individual bad luck. Thanks to everyone who's shared their experiences and strategies here - you've probably saved me weeks of frustration by learning from your trials and errors. I'll definitely update on my progress as I work through these steps. We shouldn't have to fight this hard just to prove we are who we say we are!