For your truck question - be SUPER careful here. I made a $19k mistake my first year in business by assuming I could just deduct a vehicle purchase 100%. If you're using the vehicle EXCLUSIVELY for business (like, literally never for personal use), you might be able to deduct the full amount under Section 179. But if you use it for personal stuff too (even occasionally), you can only deduct the business-use percentage. Also, SUVs and trucks over 6,000 lbs have different rules than smaller vehicles. Make sure you know which category yours falls into!

Hey Vince! Congrats on your business success so far - that's awesome that it's doing better than expected! Just to add to the great advice already shared here: since you're only 4 months in, you're actually in a perfect position to set up good tax habits from the start. The quarterly payment system everyone mentioned is definitely the way to go, and you're not too late to start. For your $26k truck scenario - the key thing is documentation. Keep a detailed log of every business trip (date, destination, business purpose, mileage). If you use it for any personal driving, calculate that percentage because the IRS will want to see those numbers if they ever audit. One more tip that saved me in my first year: open a separate business savings account specifically for taxes. Every time you get paid, immediately transfer 25-30% into that account. It makes quarterly payments so much less stressful when the money is already set aside and earmarked for taxes. You're asking all the right questions - way better to figure this out now than scramble at tax time!

This thread has been incredibly helpful! I'm dealing with a very similar situation with my web design business. I started as a sole prop, got an EIN for client W9s, then formed an LLC but kept it as a disregarded entity. PayPal required the LLC's EIN for their business account setup, so now I have two EINs just like the OP. Reading through all these responses, it sounds like the consensus is pretty clear - keep using the sole prop EIN on tax forms and W9s, and don't worry about the 1099-K having the different EIN. The explanatory statement approach mentioned by several people here seems like the smart way to handle it. One thing I'm curious about though - has anyone actually had the IRS question or audit them specifically because of this EIN mismatch situation? All the advice here makes sense logically, but I'm wondering if there are any real-world examples of this causing problems down the road, or if it really is as straightforward as everyone is saying. Also, for those who mentioned contacting the IRS directly about this - did you call the general taxpayer assistance line, or is there a specific department that handles business EIN questions?

I've been through this exact same scenario with my consulting LLC and can confirm what others have said here - you're absolutely on the right track with your thinking! The key thing to remember is that even though you're operating as an LLC, the IRS still sees you as a sole proprietor for tax purposes since it's a disregarded entity. So yes, continue using your original sole prop EIN (11-1111111) on your Schedule C and any W9 forms you fill out. When that 1099-K comes in from Square with your LLC's EIN (22-2222222), just report that income on your Schedule C like any other business income. The IRS won't have any issues with this - their systems can cross-reference both EINs to your SSN. I'd definitely echo the advice about including an explanatory statement with your tax return. Something simple like: "Taxpayer operates [LLC Name] as a single-member LLC taxed as a sole proprietorship. Income reported on 1099-K forms under EIN 22-2222222 is included in Schedule C business income reported under EIN 11-1111111." This just gives the IRS a clear paper trail if anyone ever reviews your return. The situation you described with Square requiring the LLC's EIN is super common - payment processors often have strict verification requirements that don't align perfectly with tax reporting rules. But that's totally fine as long as you're consistent on the tax side of things. You're definitely not in a "paperwork mess" - this is actually a pretty standard situation that lots of single-member LLC owners deal with!

One thing I haven't seen mentioned yet is the importance of documenting your correction process thoroughly. Keep detailed records of every amended return filed, every payment made, and all correspondence with the IRS. This documentation becomes crucial if there are any disputes later or if the IRS has questions about your corrections. Also, consider requesting penalty abatement letters for each tax year once you've filed the corrections and made payments. The IRS sometimes grants relief for reasonable cause, especially when businesses proactively correct mistakes. Your cooperation in fixing this voluntarily could work in your favor. For the partner who was incorrectly paid through payroll, make sure they understand they'll need to file amended individual returns (1040X) for each affected year. The timing matters here - generally you have 3 years from the original due date to amend and claim refunds, so depending on when those original returns were filed, some years might be getting close to that deadline. Finally, once this is all corrected, establish proper ongoing procedures to prevent this from happening again. Set up quarterly partnership meetings to review tax obligations and consider working with a bookkeeper or accountant who understands partnership taxation.

I went through a very similar situation with my LLC about 18 months ago. We had the same setup - multi-member LLC treated as partnership, but one partner was being paid through payroll for about 3 years while we never filed a single 1065. Here's what I learned from the correction process: **The good news:** The IRS was actually pretty reasonable when we proactively came forward to fix it. We used the Voluntary Classification Settlement Program (VCSP) which significantly reduced our penalties. **The process we followed:** 1. Filed all missing 1065s simultaneously with a detailed cover letter explaining the situation 2. Issued corrected K-1s to the partner who was on payroll 3. Filed amended 941s to remove the partner from payroll 4. The partner filed 1040X returns for each year to report the income correctly **What surprised me:** The partner actually came out ahead in one of the years due to the Section 199A deduction they qualified for as a partner but couldn't claim as an employee. The additional self-employment tax was painful, but the overall tax picture wasn't as bad as we feared. **My advice:** Don't wait any longer to start this process. The penalties keep accruing, and you're getting close to statute of limitations issues for some potential refunds. Also, consider hiring a tax professional who specializes in partnership corrections - it was worth every penny for the peace of mind and to make sure we didn't miss anything. The whole correction took about 8 months to fully resolve, but we were able to set up payment plans for the additional taxes owed. It's definitely stressful, but very fixable!

For those discussing dual-status returns, there's an important limitation to be aware of: you cannot take the standard deduction on a dual-status return unless you're a resident of Canada, Mexico, South Korea, or India. You must itemize deductions for the resident portion of the year. Also, if you're filing dual-status because you left the US, you might want to look into any 401k or IRA accounts you have. There are special considerations for retirement accounts when you become a nonresident.

This is a complex situation that touches on several important tax considerations. Let me add some clarification on a few points that haven't been fully addressed yet. Regarding your December 2024 visit while planning a dual-status return: Since you're entering on a B1 visa as a visitor, those days would typically be counted in the nonresident portion of your year. However, you'll want to be very clear about your departure date and intent when you left in October, as this establishes when your resident status ended. One thing I didn't see mentioned is the exit tax considerations under Section 877A. Since you were a resident alien for multiple years and are ceasing to be a US tax resident, you'll want to verify whether you meet any of the criteria that would subject you to expatriation tax rules. Most people don't, but it's worth checking. For your frequent travel pattern in 2025, keep detailed records of your entry/exit dates and the purpose of each visit. The closer connection exception requires demonstrating that Germany is your tax home, so document your German employment, housing lease dates, utility bills, bank statements, and other ties that show Germany as your primary residence. Also consider that if you do get married and your spouse is a US citizen, they may need to report your foreign bank accounts on their FBAR even if you file separately, depending on signature authority and beneficial ownership rules.

Hey Kristin! Welcome to the world of being an employer - it's definitely overwhelming at first but you'll get the hang of it. Everyone has already given you great advice about the March 12 date (it's just a statistical snapshot, not your actual filing requirement). Since you're using Gusto, I'd recommend double-checking that they're set to file your 941 automatically for you. Most payroll services offer this as part of their service, which can save you from having to worry about the filing deadlines and form preparation. If they're not handling the filing, make sure you know exactly when your Q1 form is due (April 30th) and set that reminder now. Also, don't forget that as a new employer, you might be subject to semi-weekly deposit schedules depending on your payroll amounts. Gusto should handle this automatically, but it's worth confirming so you don't accidentally miss any deposit deadlines. The deposit penalties can be pretty steep even for small amounts. You're asking all the right questions - keep it up!

Great question, Kristin! I went through the exact same confusion when I first became an employer. The March 12 date threw me off completely, but here's what I learned: You absolutely need to file Form 941 for Q1 since you had payroll in that quarter (March 17-31). The "0" on line 1 is correct because you didn't have employees during the pay period that included March 12, but you still report all wages paid from January 1 - March 31 on the rest of the form. Think of line 1 as a government headcount snapshot, while the rest of the form captures your actual tax obligations for the full quarter. This is super common for businesses that hire mid-quarter - the IRS sees it all the time. Since you're using Gusto, definitely verify whether they're filing the 941 for you or just handling deposits. Some payroll services do both, others just handle the money side. Either way, your Q1 deadline is April 30, so you've got time to get it sorted. Welcome to the employer club - it gets easier once you understand the rhythm of quarterly filings!