My buddy got audited last year because of sports betting. He won around $4.5k total but the IRS notification made it look like he won $22k because it didn't account for his losses! The sportsbooks report your WINS to the IRS but don't report your LOSSES. So you might get a letter saying you underreported income even if you properly reported your net winnings. Keep ALL your records, especially if you're using multiple betting platforms. The $600 is just the beginning of the headache lol.

This is exactly the kind of situation that trips up new sports bettors! The $600 threshold is just when the platform has to report your winnings to the IRS - it doesn't mean they start withholding taxes automatically. You'll still be responsible for paying taxes on your net gambling income when you file. Since you're planning to stay under $6k total, you probably won't have withholding unless you hit a single large win (usually $5k+). My advice: start tracking everything now in a simple spreadsheet - date, platform, bet amount, win/loss amount. Download your betting history from each app monthly and save it. When tax time comes, you'll report your total winnings as income, and if you itemize deductions, you can deduct losses up to your winnings amount. The key thing people miss is that ALL gambling income is taxable from dollar one, not just after $600. That threshold is purely about reporting requirements, not tax liability. Keep good records and you'll be fine!

This thread has been incredibly helpful! I'm in a similar situation - first year S-Corp owner with marketplace insurance. One thing I want to emphasize that I learned the hard way: make sure your S-Corp actually has the cash flow to handle paying these premiums throughout the year. I initially set up the reimbursement structure but didn't plan well for the timing. My business has seasonal cash flow, so I ended up having to pay premiums personally for a few months when cash was tight, then reimburse myself later. This created some messy bookkeeping. My advice: if you're going to have your S-Corp pay the premiums directly (which is cleaner), make sure you have a business bank account with enough buffer to handle the monthly premium payments even during slower periods. The tax benefits are definitely worth it, but the cash flow management aspect caught me off guard in my first year. Also, a quick tip for anyone using QuickBooks - set up the health insurance as a separate payroll item so it automatically flows to the right boxes on your W-2. Saves a lot of headache at year-end!

As someone who just went through this exact transition to S-Corp status this year, I can't stress enough how important it is to get this health insurance setup right from the beginning. The advice in this thread is spot-on, but I want to add one more perspective. Make sure you coordinate this with your tax preparer BEFORE implementing it. I initially started having my S-Corp pay the premiums based on online research, but my CPA caught an issue with how I was documenting it that could have caused problems during an audit. The key things my CPA emphasized: 1) The corporate resolution needs to be dated before you start the reimbursements, 2) Keep detailed records showing the premiums were paid as compensation (not just regular business expenses), and 3) Make sure your payroll system properly codes these payments so they flow correctly to your W-2. At your income level, you're definitely not going to qualify for Premium Tax Credits anyway, which simplifies things considerably. But getting the S-Corp health insurance deduction structure right will save you significant money - probably a few thousand dollars annually in tax savings based on your premium amounts. One last tip: if you haven't already, consider setting up a separate business savings account just for these types of recurring owner compensation expenses (health insurance, retirement contributions, etc.). It helps with cash flow management and makes the paper trail much cleaner for tax purposes.

I've had the opposite experience with interest. I miscalculated my quarterlies one year and thought I'd paid enough, but ended up owing more. The IRS hit me with underpayment penalties AND interest that was way more than what they'd pay me in the reverse situation.

This is such a great reminder that the tax system can occasionally work in our favor! I had no idea about the 45-day interest rule until reading this thread. It's refreshing to hear about the IRS actually paying taxpayers interest for once, especially after all the stories we hear about penalties and fees going the other way. Your identity verification experience sounds absolutely painful though - 8 weeks is ridiculous for something that should be straightforward. I'm glad you at least got compensated for their delay with that interest payment. The irony of getting a 1099-INT from the IRS for money they paid you because they were late is pretty amusing! Thanks for sharing this - I'm definitely going to keep this in mind if I ever have a large refund situation. Every little bit helps, especially when it's the government finally paying US interest for a change.

Has anyone dealt with the practical aspects of getting ITINs for foreign members? I've found that to be one of the most time-consuming parts of the process.

One thing I haven't seen mentioned yet is the potential impact of tax treaties between the US and the foreign corporation's country of residence. If there's a favorable tax treaty in place, it could significantly reduce the branch profits tax rate or potentially eliminate it altogether. The standard branch profits tax is 30%, but many treaties reduce this to 5% or even 0% in some cases. Also, consider the timing of your ownership change carefully. If you make the switch mid-year, you'll need to file both a short-year partnership return (Form 1065) for the period with multiple members AND treat the remainder of the year as a disregarded entity/branch operation. This creates additional complexity and potential for errors. I'd strongly recommend consulting with a tax professional who specializes in international business structures before making this change. The compliance burden and potential penalties for getting foreign-owned entity reporting wrong can be substantial.

One thing I haven't seen mentioned is how the tax treaties between the US and Canada might impact your situation. As a Canadian citizen who's a US tax resident, you might be eligible for certain protections under the US-Canada tax treaty. However, tax treaties generally don't help much with offshore structures in places like the Cayman Islands. In fact, these structures often trigger anti-avoidance provisions in tax laws. My biggest concern would be that this arrangement could potentially be viewed as a tax avoidance scheme by the IRS, especially given the lack of substantial business operations in the offshore jurisdiction. The IRS has become extremely aggressive in pursuing offshore accounts in recent years.

I want to emphasize something that hasn't been fully addressed - the potential criminal penalties for willful failure to report foreign accounts. As someone who went through an offshore voluntary disclosure program, I can tell you the stakes are much higher than just paying additional taxes. The willful failure to file FBAR can result in penalties of up to 50% of the account balance PER YEAR, and in extreme cases, criminal prosecution. Given that you're talking about potentially substantial trading profits, these penalties could be devastating. Also, consider that the IRS has extensive data sharing agreements with financial institutions worldwide. Interactive Brokers, for example, reports account information to the IRS under FATCA requirements, regardless of where your account is domiciled. The idea that offshore accounts provide privacy from the US tax authorities is largely a myth in 2025. My strong recommendation would be to consult with both a US tax attorney specializing in international taxation AND a Canadian tax professional familiar with US treaty provisions before moving forward. The cost of proper planning upfront is minimal compared to the potential penalties and legal fees if this goes wrong.