My s-corp lost almost $60k last year and my accountant specifically told me that taking a reasonable salary is STILL required even during loss years if you're active in the business. The losses just pass through to your personal return where they offset other income.

Just want to emphasize what others have said - you're absolutely doing the right thing by continuing to take a salary even during the loss year. The IRS is very clear that active shareholders must receive reasonable compensation regardless of profitability. Your brother's situation is actually pretty straightforward since he's truly inactive. No services = no compensation required. Just make sure you document his non-involvement clearly as others suggested. One thing to keep in mind: that $47k loss will flow through proportionally to both of you on your K-1s, which could actually provide some tax relief on your personal returns depending on your other income sources. The salary you're taking is actually helping to increase that loss (since payroll is a business expense), so you're handling this correctly from both a compliance and tax strategy perspective.

I'm in exactly the same situation and feel your pain! Filed my amended return in June 2022 and it's been 20 months of absolutely nothing. The "Where's My Amended Return" tool has shown "received" since August 2022 with zero updates. What's really helped me cope with this nightmare: **Set realistic expectations**: I've accepted that 2022 amended returns are basically in purgatory right now. The IRS is prioritizing current year returns, and amendments are getting pushed to the back burner indefinitely. **Check your account transcript monthly**: Sometimes you'll see processing codes appear there before the online tool updates. Look for codes like 570 (additional review) or 766 (credit to account). At least it gives you something concrete to monitor. **Document your timeline**: Keep a record of when you filed, every status check, and any phone calls. If this drags on much longer, you'll need this documentation for the Taxpayer Advocate Service or potentially Tax Court if they try to claim statute of limitations. **Don't stress about calling yet**: Honestly, the phone wait times are brutal and the agents often don't have any more information than what's available online. Save your sanity for now unless something urgent comes up. The whole system is completely broken. It's infuriating that they can process regular returns in 21 days but take 2+ years for amendments. Based on what I'm seeing here, some early 2022 amendments are finally starting to move, so hopefully we're getting close to our turn. Hang in there - we'll get through this eventually!

I'm so relieved to find this thread - I thought I was going crazy! Filed my amended return in September 2022 and it's been 17 months of complete silence. The "Where's My Amended Return" tool hasn't budged from "received" since October 2022. Reading everyone's experiences here is both reassuring and terrifying. Reassuring because clearly this is a widespread systemic issue, not just my return that got lost. Terrifying because some of you have been waiting even longer than me! I've been checking the status obsessively, which is probably making my anxiety worse. Based on all the great advice in this thread, I'm going to: 1. Start checking my account transcript monthly instead of the online tool weekly 2. Look for those specific transaction codes (570, 766, etc.) that others mentioned 3. Create a documentation log of all my interactions and status checks 4. Stop panicking and accept that this is just the new reality for 2022 amended returns The interest payment point several people raised is something I hadn't considered. Definitely going to ask about that when this finally gets processed. After waiting this long, they absolutely should be paying interest on the delay. It's absolutely ridiculous that they can process regular returns in weeks but take 2+ years for amendments. The system is clearly broken, but at least we're all suffering through this together. Thanks everyone for sharing your experiences and tips - it helps to know I'm not alone in this nightmare!

This is such helpful information from everyone! I'm actually dealing with this exact situation right now - filed my taxes two weeks ago and have been dreading the conversation with my trustee. Reading through these experiences, it sounds like the key things are: 1) Don't spend the refund before getting approval, 2) Have documentation ready for any expenses you want to justify, and 3) Know that each district really does handle it differently. @Mei Chen - that's really encouraging that your district allowed you to keep 100% of the EIC! I'm hoping mine has a similar policy. Did you have to file any specific paperwork beyond just notifying them, or was it more automatic once they reviewed your return? For anyone still figuring this out, it might be worth calling your trustee's office early in tax season to ask about their specific procedures. Better to know upfront than be scrambling after you've already filed!

I'm new to Chapter 13 and this thread is incredibly helpful! I filed my petition about 4 months ago and my first tax season under bankruptcy is coming up. Reading everyone's experiences, it seems like the common thread is to be proactive and transparent with your trustee. A few questions for those who've been through this: • Is there a typical timeline for when you need to notify your trustee after filing taxes? • Do most of you use tax preparation software or go to a professional given the bankruptcy complications? • Has anyone had success arguing that certain credits should be treated as "tools of the trade" or necessary for maintaining employment? I'm particularly concerned because I have a large Earned Income Credit coming and my plan payments are already pretty tight. Any advice on how to frame the request to keep a portion would be amazing. Thanks for sharing your experiences - this community is a lifesaver!

Great question! I went through this exact decision two years ago when I started my tax prep business. Here's what I learned: Start as a sole proprietorship (LLC taxed as sole prop) for your first year or two. It's simpler, cheaper to maintain, and gives you flexibility while you're getting established. You'll just file Schedule C with your personal return and pay self-employment tax on profits. The magic number where S-Corp starts making sense is usually around $60-70k in annual profit. At that point, the self-employment tax savings from S-Corp election can offset the additional complexity and costs. For payroll with S-Corp - yes, you absolutely need to set up payroll to pay yourself a reasonable salary. I use ADP for about $60/month, but QuickBooks payroll works too. The IRS is very strict about this - no salary means no S-Corp benefits. My advice: Focus on getting your business profitable first, then revisit the S-Corp election once you have a solid year of income data. You can always elect S-Corp status later (effective beginning of the tax year you make the election). Good luck with your barbershop! The chair rental model is smart - just make sure you have solid rental agreements in place.

One more consideration that might be helpful - don't forget about quarterly estimated tax payments! Whether you go sole prop or S-Corp, you'll likely need to make quarterly payments to avoid penalties since you won't have taxes automatically withheld like with a W-2 job. For sole proprietorship, you'll calculate these based on your expected net profit and self-employment tax. For S-Corp, it's a bit more complex since you'll have both payroll taxes (handled automatically if you use payroll software) and taxes on any distributions. I'd recommend setting aside about 25-30% of your net profit in a separate savings account for taxes - better to overpay than get hit with penalties. Once you get through your first year, you'll have actual numbers to work with for more accurate quarterly estimates. Also, since you're opening next month, make sure you get an EIN (Employer Identification Number) even if you start as sole prop. You'll need it for business banking and it makes things smoother if you decide to switch to S-Corp later. The IRS website lets you get one instantly online - takes about 10 minutes.

I'm a new minister dealing with this exact situation! Reading through everyone's responses has been incredibly helpful, but I'm still a bit confused about the timing aspect. My church board meets quarterly, and I just started my position last month. Can I retroactively designate a housing allowance for the months I've already worked, or does it need to be designated before I receive the salary? I've been paying regular income tax on my full salary so far. Also, I'm renting an apartment and my actual housing costs (rent + utilities + renters insurance) come to about $1,800/month. My salary is $55,000 annually. Would it make sense to designate the full $21,600 annually as housing allowance, or should I be more conservative? I don't want to run into issues with the "fair rental value" test since I don't own my home. Thanks for all the great advice in this thread - especially about the FICA withholding issue. I need to check my paystubs immediately!

Great thread everyone! As someone who's worked in church administration for over a decade, I want to emphasize a few key points that can save ministers significant money: First, the confusion in the original post is very common - many ministers think the housing allowance creates additional tax burden when it actually ALWAYS saves money on federal income taxes. The 15.3% self-employment tax applies to your full ministerial income regardless of housing allowance designation. Second, timing is crucial. Unlike some tax benefits, housing allowances must be designated BEFORE payment, not when you file taxes. Churches should document this through board minutes or official letters. Third, don't forget about state taxes! While the housing allowance reduces federal income tax, most states don't recognize this exclusion, so you'll still pay state income tax on your full salary. This is still usually beneficial overall, but factor it into your calculations. Finally, for those struggling with the "fair rental value" determination, consider that this includes utilities, furnishings, and maintenance - not just bare rent. A $1,200/month apartment might have a fair rental value of $1,500+ when you factor in what a furnished rental with utilities would cost. Keep excellent records and don't be afraid to take advantage of this legitimate tax benefit that Congress specifically created for ministers!