For ed-tech companies like Khan Academy, you'll likely want to use SIC code 7372 (Prepackaged Software) as your primary classification, especially if your revenue model is subscription-based software delivery. The key factor is how your business generates revenue - if it's primarily through software licensing/subscriptions, then 7372 is most appropriate. However, I'd strongly recommend also familiarizing yourself with the corresponding NAICS code 511210 (Software Publishers), as most government forms and business registrations now use NAICS instead of SIC. Many banks, investors, and regulatory agencies have transitioned away from SIC codes entirely. One thing to consider is that some states have specific licensing or regulatory requirements for educational service providers, regardless of your delivery method. It's worth checking with your state's business registration office to see if there are any additional requirements for companies providing educational content, even through software platforms. The educational component doesn't necessarily require a separate classification if your primary business activity is software development and distribution - the fact that your software serves an educational purpose doesn't change the fundamental nature of your business model.

I went through this exact same classification dilemma when launching my educational platform last year. After consulting with both a business attorney and my accountant, we settled on SIC 7372 (Prepackaged Software) as the primary code since our core business model is software subscription services. The key insight my attorney shared was to focus on your primary revenue-generating activity rather than just the subject matter of your content. Even though we're in education, we're fundamentally a software company that serves educational markets - similar to how Salesforce is a software company that serves sales teams. One practical tip: when filling out forms, I've found it helpful to have a brief one-sentence explanation ready for why you chose your classification. Something like "Software development and licensing with educational applications" has worked well for me when questions arise about why an education-focused company uses a software classification. Also worth noting that some business insurance policies have different rates based on classification codes, so this choice can have real financial implications beyond just paperwork compliance.

For e-filing Form 1120, I'd recommend FreeTaxUSA Business - they support C-corp filing and are significantly cheaper than most alternatives (around $150-200 vs $600+ for Drake). The interface is pretty intuitive and they have good QuickBooks import functionality. Regarding your shareholder payment situation, you definitely need to get this sorted before filing. Since C-corp shareholders who work in the business are considered employees, those "distributions" should have been processed as payroll with proper withholding. You'll likely need to file corrected payroll returns (941-X) and pay the missed payroll taxes plus penalties. One suggestion - consider consulting with an EA (Enrolled Agent) for just this first year to make sure you get the employment tax issues resolved properly. They're less expensive than CPAs but can represent you before the IRS if needed. Once you get the compliance issues sorted, you can handle future years yourself with the software.

Yes, FreeTaxUSA Business handles the complete e-filing process for Form 1120 - it's not just form preparation. They submit directly to the IRS and you get confirmation when it's accepted. I used them for our C-corp last year and the whole process was smooth. Definitely agree on getting an EA involved for the payroll tax cleanup. We had a similar situation with informal payments to founders, and our EA helped us file the 941-X forms and minimize penalties. The IRS was actually pretty reasonable about it since we were proactive in fixing the issue rather than waiting for them to discover it. One tip - when you do find an EA, make sure they have experience with startup employment tax issues. Some are more focused on individual returns and might not be as familiar with the nuances of C-corp shareholder-employee situations. The right EA can also help you set up proper payroll processes going forward so you don't repeat the same mistakes.

i feel u fam. got one last week and almost had a heart attack but it was just confirming my address change lmaooo

Hey! I totally get the anxiety - IRS letters can be super intimidating even when they're nothing serious. Like others said, you really need to open it to know what's going on. Most of the time it's just routine stuff like confirming info or asking for documentation. The notice number (usually CP### or LTR####) will tell you exactly what type it is. Once you open it, definitely post a pic with your personal info blurred out and we can help you figure out next steps!

Looking at your transcript, I can see why you're stressed - those are some significant adjustments! The key thing to understand is that codes 767 and 765 (your credit reductions totaling $5,080) happened back in April 2024, but your amended return wasn't filed until October 2024. That 6-month gap is likely what triggered the interest charge. The good news is that code 291 showing -$1,848 is actually money being credited back to your account (negative amounts are refunds on IRS transcripts). So while you lost $5,080 in credits, you're getting $1,848 back, making your net loss around $3,232 plus the interest. Since your amended return is still processing (the "forwarded for processing" status), there's still hope that some or all of those original credit reductions could be reversed if the amendment addresses whatever triggered them. The IRS usually reduces EIC when they can't verify income or dependent eligibility, so make sure your amended return includes all supporting documentation. I'd recommend calling the Practitioner Priority Service at 1-866-860-4259 if you can get a tax pro to call for you, or try the Taxpayer Advocate Service at 1-877-777-4778 - they're much better at explaining these complex situations than regular IRS customer service. Keep that reference number 43277-696-04828-4 handy when you call!

The timeline of events on your transcript tells a clear story of what happened. Your original return was processed normally, but then in April 2024 the IRS conducted an automated review that flagged issues with your Earned Income Credit and other credits, leading to those substantial reductions (codes 765 and 767). What likely happened is the IRS couldn't verify information like income amounts, filing status, or dependent eligibility during their post-filing review process. This is pretty common with EIC claims since they're heavily scrutinized due to fraud concerns. The fact that you filed an amended return in October 2024 suggests you discovered what caused the original adjustments and are trying to correct them. The 6-month gap between the credit reductions and your amendment is what generated that interest charge - the IRS considers the credits as "overpaid" from April onward until resolved. Here's what to watch for: Your amended return (reference 43277-696-04828-4) is currently being processed, which typically takes 16-20 weeks. If it successfully addresses the original issues, you could see those credits restored. The code 291 credit of $1,848 might be a partial adjustment while they work through your case. Keep checking your transcript weekly and definitely call the Taxpayer Advocate Service at 1-877-777-4778 - they can provide much clearer explanations than regular IRS phone lines. Stay patient, but stay on top of it!

Why not just setup an LLC and have the business buy the alcohol? Then its clearly a business expense and you personally arent drinking it, your business entity is providing it as part of the service?

As someone who's dealt with similar content creator tax issues, I'd strongly recommend getting professional guidance on this one. The IRS has very specific rules about entertainment expenses, and alcohol deductions are heavily scrutinized regardless of business purpose. While your situation is unique since you only drink for content creation, you'll still likely face the 50% limitation on these expenses. The key is proving business necessity - keep detailed records linking each purchase to specific streams, viewer engagement metrics, and revenue generated from that content. Consider also documenting that these venues/drinks are essential to your brand and audience expectations. If you can show that your audience tunes in specifically for this type of content and that removing alcohol would significantly impact your business income, that strengthens your case. But definitely consult with a tax professional who understands creator economics before taking any large deductions.