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I successfully navigated this last tax season. Here's what worked for me: ⢠Filed my amended return in February 2023 ⢠Checked the "Where's My Amended Return" tool weekly (not daily - it doesn't update that often) ⢠Received my paper check in exactly 18 weeks ⢠The envelope was very plain and could easily be mistaken for junk mail Despite what some people claim, there's no way to get direct deposit for amended returns. I even asked an IRS agent specifically about this when I had to call about something else.
I went through this exact situation in 2022 and can confirm what others have said - amended returns only come as paper checks. The IRS explained to me that their amended return processing system is completely separate from their regular refund system, which is why they can't do direct deposits for amendments. I waited about 15 weeks for my check, and it came in a very plain white envelope with just "U.S. Treasury" as the return address. Make sure to keep checking the WMAR tool every couple weeks, but don't expect it to be as detailed as the regular refund tracker. Also, definitely double-check that your current address is on the amended return - I've heard horror stories about checks going to old addresses because people forgot to update that section.
Thanks for sharing your experience! That detail about the plain envelope is really helpful - I can definitely see how someone might accidentally throw that away thinking it's junk mail. Did you have any issues with the WMAR tool showing accurate information, or was it pretty reliable for tracking your amendment? I'm preparing to file an amended return myself and want to set proper expectations for the timeline.
I ignored a CP24 notice once thinking it was no big deal. BIG mistake. The penalties and interest kept growing, and eventually they sent a CP504 threatening to levy my bank accounts. Had to set up a payment plan and ended up paying way more than the original amount. Whatever you do, don't just throw the letter in a drawer and forget about it!
Ugh that sounds stressful! How much did the penalties end up being compared to the original amount they wanted?
The original amount was around $650, but by the time I finally dealt with it 8 months later, it had grown to over $900 with all the penalties and interest. The failure-to-pay penalty is usually 0.5% per month (up to 25%), plus interest that compounds daily. Plus, I spent hours on the phone and filling out payment plan paperwork that could have been avoided if I'd just responded right away. Not worth the stress at all!
I went through this exact same situation about 6 months ago with a CP24 notice for around $750. The anxiety was real! Here's what I learned that might help: First, take a deep breath - these notices are super common and usually straightforward to resolve. The key is acting quickly rather than letting it sit. What worked for me was gathering ALL my tax documents (W-2s, 1099s, bank statements, etc.) and doing a line-by-line comparison with what the IRS claimed I didn't report. In my case, they were right - I had completely forgotten about a small 1099-MISC from some freelance work I did early in the year. If you determine the IRS is correct (like I did), paying online through IRS Direct Pay is the fastest way to stop interest from accumulating. The process was actually pretty simple once I stopped panicking about it. But if you think there's an error, definitely dispute it. The notice should have instructions on how to respond. Just make sure you do it within the timeframe they specify (usually 30 days from the notice date). Either way, don't let this snowball like some people do. Address it now while it's still manageable. You've got this!
This is really helpful advice! I'm dealing with my first CP24 notice too and was wondering - when you did that line-by-line comparison with your documents, did you use any specific method or just go through everything manually? I have a lot of different income sources from last year and I'm worried I might miss something again even while trying to figure out what I originally missed.
This is such a common confusion for remote workers! I went through the same thing when I started working from home for a company in a different state. Just to add to what others have said - make sure you also check if your employer's payroll system is set up to handle remote workers correctly. Some companies automatically withhold taxes for their headquarters state until you specifically tell them otherwise. I had to contact HR to make sure they switched my withholding to my home state. Also, keep good records of where you're physically working from each day, especially if you ever work while traveling or visiting family in other states - it can matter come tax time! The good news is that once you get it set up correctly the first time, it's pretty straightforward going forward. Welcome to remote work - it's awesome once you get past the initial paperwork hurdles!
This is really helpful advice! I hadn't thought about the payroll system potentially withholding for the wrong state automatically. I'll definitely reach out to HR once I get my paperwork sorted to make sure they have me set up for Michigan withholding instead of Nevada. The record-keeping tip is smart too - I can see how traveling while working remotely could create complications if I'm not careful about tracking where I'm physically located when working. Better to be prepared from the start than scramble later during tax season!
Welcome to the remote work club! Just wanted to chime in with a quick tip that might save you some headaches - when you contact your HR department about setting up Michigan withholding, ask them to confirm in writing (email) exactly which state they're withholding taxes for. I learned this the hard way when my company's payroll system kept defaulting back to their headquarters state even after I thought I had it corrected. Having that email confirmation helped me catch the error quickly during my first pay stub review. Also, since Nevada has no state income tax, you're actually in a pretty good spot compared to remote workers who have to navigate between two states that both have income taxes. Michigan will be your only state tax concern, which simplifies things quite a bit!
That's excellent advice about getting the confirmation in writing! I definitely don't want to discover months later that taxes were being withheld incorrectly. It sounds like having documentation will make it much easier to catch any payroll errors early. You're right that being in the Nevada/Michigan situation is probably simpler than dealing with two states that both have income taxes. I feel much more confident about this whole process after reading everyone's experiences and tips. Thanks for sharing what you learned the hard way - it'll help me avoid the same mistakes!
Just be careful about the timing of all this. I closed my LLC last year but made a mistake in the sequence and it cost me. Make sure you: 1) File your final tax return first 2) THEN dissolve with the state 3) THEN cancel any local licenses/permits 4) THEN notify vendors, banks, etc. If you dissolve with the state first, you might have trouble filing your final tax return because technically the business no longer exists. I learned this the hard way and had to reinstate my LLC temporarily just to file properly.
Did you have to pay extra fees to reinstate the LLC? That sounds like a nightmare scenario I'd like to avoid!
Great advice in this thread! I went through a similar situation last year with both an LLC and sole proprietorship that had been mostly inactive. One thing I'd add is to make sure you handle any outstanding business debts or contracts before filing for dissolution. I almost forgot about a small monthly software subscription I had for the LLC and a couple of vendor accounts that were still open. Even though the amounts were tiny, having open obligations can complicate the dissolution process. Also, if you have any business bank accounts, don't close them until after you've filed all your final returns and received any potential refunds. I made the mistake of closing my business checking account too early and had to deal with getting an IRS refund sent to a closed account - took months to sort out. For the sole proprietorship side, since you mentioned selling on eBay/Amazon, make sure to update your tax settings on those platforms so they stop sending 1099s to that business name/SSN combo. Otherwise you might get confusing tax documents next year.
This is really helpful advice! The point about keeping business bank accounts open until everything is finalized is something I wouldn't have thought of. Quick question - when you say update tax settings on eBay/Amazon, do you mean switching from business seller to individual seller status, or is there a specific tax form/setting I need to change? I want to make sure I don't mess up the 1099 situation for next year.
Hiroshi Nakamura
Just wanna point out that an S corp with $1M profit should be maxing out retirement contributions too! You can put up to $68,000 in a Solo 401k for 2025 (that's $23,000 employee contribution plus 25% of your salary as employer contribution up to the max). This reduces your taxable income immediately. Also look into setting up a defined benefit plan if you're planning to have similar profits for several years. Our S corp was able to legally contribute over $200k annually to retirement this way, creating a massive tax deduction.
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Isabella Costa
ā¢This is great advice. We implemented this strategy with our S corp last year and it made a huge difference. One question tho - for the employer contribution part, is that based on W2 wages only or can you calculate it based on the full K1 income?
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Mateo Sanchez
One thing I haven't seen mentioned yet is the potential for Section 199A deduction (QBI deduction) which can be huge for S corp owners. With $700K in pass-through income, you could potentially deduct up to 20% of that ($140K) if your business qualifies and you're under the income thresholds. However, there are some complexities with S corps and QBI - the deduction is generally based on your K-1 income minus your W-2 wages from the S corp. So if you take a $150K salary, your QBI would be calculated on $550K, potentially giving you up to $110K in additional deductions. The rules get tricky around the income limits and whether your business is a "specified service trade or business" (SSTB), but with proper planning this could save you tens of thousands. Your accountant should definitely be running these numbers for you, especially since you're right at the income levels where the phaseouts start kicking in.
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Yuki Ito
ā¢This is exactly the kind of detail I was hoping to find! The QBI deduction could be massive for our situation. Quick question - you mentioned the income thresholds where phaseouts start. What are those limits for 2025? I want to make sure we structure things optimally before it's too late in the year to make adjustments. Also, our family business is in manufacturing/distribution - definitely not an SSTB - so it sounds like we should qualify as long as we're under the income limits. Is there anything specific we should be documenting now to support the QBI deduction if we get audited later?
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