Has anyone used the attribution rules to their advantage with family members? I'm thinking about giving my spouse ownership in one of my LLCs to potentially optimize our retirement contributions, but I'm not sure if that would trigger control group issues.

I've been following this discussion closely as someone who recently went through a similar multi-LLC Solo 401k setup. One thing I'd add is the importance of maintaining separate books and records for each entity, even if they end up not being a control group. The IRS will scrutinize whether your businesses are truly separate operations during an audit. Also, make sure you're tracking compensation from each entity separately. Even if the businesses aren't a control group, you can only contribute to a Solo 401k based on the earned income from that specific business. I made the mistake of trying to use combined income across entities and had to correct it later. The documentation from services like taxr.ai that others mentioned becomes really valuable here because it shows you considered all the rules properly. I keep mine with my tax records as backup documentation.

Hey Zara! I went through something very similar with my disability discrimination settlement last year. You're right to be confused - the lack of tax forms doesn't mean you're off the hook for reporting it. Based on my experience and what my tax attorney told me, you'll need to report the full gross settlement amount ($20,250) as "Other Income" on your Form 1040. The good news is that you can deduct the attorney fees ($6,750) as an adjustment to income on Schedule 1, Line 24 under "Attorney fees and court costs for unlawful discrimination claims." The key thing is that employment discrimination settlements like yours still qualify for the attorney fee deduction even after the Tax Cuts and Jobs Act - this is specifically preserved under IRC Section 62(a)(20). I'd strongly recommend keeping detailed records of everything: the settlement agreement, any correspondence with your attorney about the fee arrangement, and documentation showing this was specifically for disability discrimination. The IRS may not have forms from your employer, but they could still ask questions later. One more tip - if any portion of your settlement was specifically allocated to physical injury or sickness caused by the discrimination (like medical expenses for stress-related symptoms), that portion might be excludable from income under Section 104(a)(2). Check your settlement agreement to see if there's any such allocation. Good luck with your return!

I've been following this thread with interest since I'm dealing with a similar situation. One thing I haven't seen mentioned yet is the timing aspect - Zara, when did you actually receive the settlement funds? The tax year for reporting is typically when you received the money, not when the case was resolved or the agreement was signed. Also, I'd recommend being very specific about the description when you report it as "Other Income." Something like "Employment Disability Discrimination Settlement" will be clearer for the IRS than just a generic description. This helps establish the nature of the income and supports your ability to deduct the attorney fees under Section 62(a)(20). One more consideration - if your settlement included any punitive damages, those are generally fully taxable regardless of the underlying discrimination claim. The settlement agreement should specify if any portion was punitive damages versus compensatory damages. The distinction can affect how different portions are taxed. Keep all your documentation organized and consider making copies for your records. Even though you didn't receive a 1099, having a clear paper trail will be invaluable if there are ever any questions about how you reported this income.

This is a fascinating discussion on tax reform! As someone who's dealt with the complexity of our current system, I really appreciate the elegance of your flat tax proposal. One aspect I haven't seen discussed much is how this would affect small business owners and self-employed individuals. Currently, we have a lot of business deductions that help offset the higher effective tax rates we face due to self-employment taxes. Under your system, would business expenses still be deductible? Things like equipment, office supplies, travel, etc.? If we eliminate most deductions for simplicity but keep business expenses, that creates an interesting dynamic where business owners might have significantly different effective rates than W-2 employees at the same income level. Also, I'm curious about how this would interact with retirement savings. Would contributions to 401(k)s and IRAs still be deductible, or would those be eliminated too? The current tax-advantaged retirement accounts are a major way people reduce their current tax burden while saving for the future. The more I think about it, the more I realize how many policy goals our current tax system tries to achieve beyond just raising revenue - encouraging retirement savings, homeownership, charitable giving, business investment, etc. Your proposal would essentially be saying we should achieve those goals through other means rather than the tax code.

As a tax professional who's worked with clients across all income levels, I think your proposal has merit but would need some refinements to be practical. The biggest issue I see is that eliminating most deductions could create unintended hardships. For example, medical expenses can be catastrophic - a family facing a serious illness shouldn't lose the ability to deduct extraordinary medical costs just for the sake of simplicity. However, I do like the core concept of high standard deductions paired with a flat rate. It would dramatically reduce compliance costs and make tax preparation accessible to almost everyone without professional help. One modification to consider: instead of eliminating ALL deductions, maybe keep a very short list of the most essential ones - medical expenses above a threshold, state and local taxes (capped), and business expenses. This preserves some fairness while maintaining most of the simplicity benefits. Regarding revenue, you could implement this gradually. Start with your proposed structure but adjust the rate and deduction levels based on actual revenue data from the first few years. This would let you fine-tune the system without the political impossibility of getting everything perfect from day one. The administrative savings alone would be enormous - both for taxpayers and the IRS. That has real economic value beyond just the tax rates themselves.

Has anyone noticed that the calculated taxable amount of Social Security on 1040.com seems off? I entered my SSA-1099SM exactly as shown on the form, but the taxable amount it's calculating seems really high compared to last year, even though my benefits only increased by about $150 monthly.

Just wanted to share my experience for anyone else struggling with this. I had the exact same issue with my SSA-1099SM on 1040.com and found the solution after calling their customer support. The key is that you need to look for "Social Security Benefits (SSA-1099)" specifically, not just general retirement income. In 1040.com, go to Income → Government Benefits → Social Security Benefits. There should be a dropdown that lets you select "SSA-1099SM" as the form type. One thing that tripped me up initially - make sure you're entering the gross benefits amount from Box 5 of your SSA-1099SM, not any of the other boxes. The software will automatically calculate the taxable portion based on your other income. Hope this helps save someone else the headache I went through!

Just want to point out that the process might be simpler than some are making it sound. I'm from the UK selling through Amazon US, and the state I needed a permit in (Washington) had a streamlined registration process for foreign businesses. The key is researching the specific requirements of the states you're dealing with. For example, some states have simplified seller use tax returns for marketplace sellers. And five states (Alaska, Delaware, Montana, New Hampshire, and Oregon) don't even have sales tax! Look into whether you qualify for any streamlined filing programs or reduced frequency returns for smaller businesses. My permit requires filing only annually because my volume is relatively low.

As someone who went through this exact situation last year (I'm based in Germany selling on Amazon US), I can confirm what others have said - you absolutely need the sales tax permit first to get a valid resale certificate. One thing I'd add that hasn't been mentioned much: check if your state offers any expedited processing for foreign businesses. When I registered in Nevada for my supplier there, they had a "priority processing" option that cut the wait time from 4-6 weeks down to about 10 business days for an additional fee. Since I had suppliers waiting for my resale certificate, it was worth the extra cost. Also, don't forget about the ongoing compliance requirements. Even with Amazon handling your sales tax collection, you'll still need to file periodic returns in states where you have permits. Most states allow electronic filing which makes it easier for us international sellers, but you'll want to set up reminders since the penalties for late filing can be steep. One last tip: keep detailed records of all your wholesale purchases with resale certificates. If you ever get audited, you'll need to prove those purchases were legitimately for resale and not for your own use.