This thread has been incredibly helpful! I'm dealing with a similar Form 2553 issue where my CPA put an effective date that doesn't align with my incorporation timeline. What I'm finding most valuable from everyone's experiences is the emphasis on being proactive rather than waiting for the IRS to catch and reject the error. It sounds like filing a corrected form immediately is definitely the way to go. One thing I'm curious about - for those who successfully corrected their Form 2553, did you need to include any specific documentation with the corrected form beyond the explanation letter? I want to make sure I submit everything the IRS needs the first time to avoid further delays. Also, Jessica (the original poster), have you had a chance to file your correction yet? Would love to hear how it goes since your situation seems very similar to what several of us are dealing with.

I'm a tax attorney and see this exact issue come up frequently with new S-Corp elections. You're absolutely right to be concerned - an effective date that predates the corporation's existence is a fundamental error that will likely result in rejection of your Form 2553. The good news is that this is completely fixable, and you're catching it early. Here's what I recommend: 1) File a corrected Form 2553 immediately - don't wait for the IRS to reject the original. Check the box indicating it's a corrected election and use either your incorporation date (06/05/24) or any date after that as your effective date. 2) Include a brief explanation letter stating that the original form contained an error due to professional preparation and that you're correcting the effective date to comply with the requirements that it cannot predate the corporation's existence. 3) Keep detailed records of both filings in case you need to reference them later. Regarding your accountant - multiple errors including getting your company name wrong suggests a lack of attention to detail that's concerning for tax matters. At minimum, they should fix this at no charge since it was their mistake. The key is acting quickly. The sooner you file the correction, the less likely you'll face the delays that some others have mentioned. This is a common error and the IRS has procedures in place to handle corrections efficiently when they're submitted proactively.

This thread has been incredibly helpful! I'm in a similar boat as a freelance digital marketer just starting to scale beyond my home state. One thing I'd add from my research is that some states have "de minimis" thresholds below their main economic nexus limits where you might still need to register or at least report. For example, I discovered that even if you're under the $500k threshold in some states, if you're doing regular business there (like monthly recurring clients), you might trigger other registration requirements. Colorado has some unique rules around this. Also, for anyone dealing with affiliate marketing or referral commissions as part of their services - that can create nexus in ways you might not expect. I learned this when a client wanted me to manage their affiliate program across multiple states. The documentation advice from @Ivanna St. Pierre is spot on. I now use separate line items for "Marketing Strategy & Consulting (Non-taxable service)" vs "Digital Asset Creation (Potentially taxable deliverable)" on all my invoices. Takes a few extra minutes but gives me solid backup if questions arise. Thanks everyone for sharing real-world experiences - this is exactly the kind of practical advice you can't find in generic tax articles online!

As someone who's been dealing with multi-state sales tax compliance for my digital marketing business for the past two years, I wanted to share a few key insights that might help you navigate this maze. First, you're absolutely right to be cautious about assumptions regarding exemptions. While most states do exempt pure marketing services like strategy consulting, campaign management, and SEO work, the lines get blurry quickly when you start offering hybrid services or digital deliverables. Here's what I've learned the hard way: document everything from day one. Keep detailed records not just of what services you provide, but HOW you provide them and to clients in which states. This becomes crucial if you ever face an audit or need to establish your compliance history. For the states you mentioned specifically - Florida, California, and New York - you're generally on solid ground with pure marketing services. But watch out for bundled offerings. If you're providing marketing strategy AND creating digital assets (templates, graphics, reports) as part of a package deal, some states may view the entire package as taxable. A few practical tips: - Set up quarterly reviews of your client base by state to monitor nexus thresholds - Consider separate contracts/invoicing for clearly exempt services vs. potentially taxable deliverables - Don't forget about local jurisdictions - some cities have their own business licensing requirements - When in doubt, get official guidance from the state rather than relying on general advice The landscape changes frequently, so staying informed through official state resources and professional guidance is worth the investment. Better to be overly compliant than face penalties later when your business has grown!

My transcripts been showing this since March... still nothing. This system is broke af

Ugh I feel you so hard on this! I've been stuck with the same 570/971 codes for about 6 weeks now and it's driving me absolutely insane 😤 The waiting game is brutal especially when you really need that money. I've been checking my transcript like every other day hoping something changes lol. From what I've read here and other places, seems like most people do eventually get their refunds but the timeline is all over the place. Some get it in 2-3 weeks, others are waiting months. The IRS really needs to get their act together with communication - like at least give us a realistic timeframe instead of leaving us in limbo! Hang in there, we got this 💪

One thing nobody mentioned - if your son is under 27, could you possibly cover him under YOUR health insurance instead? Might be cheaper than what he's paying, and then this whole deduction issue becomes moot. Just a thought!

Just to add one more perspective to this great discussion - make sure your son keeps detailed records of when employer health coverage was available versus when it wasn't. The IRS can be pretty strict about this if they audit. I'd recommend creating a simple spreadsheet showing each month of the tax year, which employers he worked for, whether health insurance was offered (even if he declined it), and the premiums he paid. This documentation will be invaluable if there are ever questions about the deduction. Also, don't forget that if he does take the self-employed health insurance deduction, it goes on Schedule 1 (Line 17) and reduces his adjusted gross income, which can have other beneficial effects on his overall tax situation - like potentially qualifying for other income-based deductions or credits.

I'm dealing with a similar situation (though thankfully not quite as much - around $180k). One thing I learned from my research is that you should absolutely get multiple consultations before committing to that $13,500 fee. I found Enrolled Agents who specialize in tax resolution charging significantly less for similar services. Also, don't let the IRS collections timeline pressure you into making hasty decisions. While you don't want to ignore this, you do have time to explore your options properly. The IRS would rather work with you on a payment plan than go through the expensive process of trying to collect through liens and levies. Have you received any formal collection notices yet, or are you getting ahead of this based on what you discovered about the unreported income? That timeline can affect your negotiating position and urgency level.

I can't emphasize enough how important it is to act quickly but thoughtfully with a debt this size. $250k puts you in serious collection territory once the IRS starts the enforcement process. Here's my practical advice from handling similar cases: 1) That $13,500 attorney fee isn't unreasonable for the complexity, but shop around. Get at least 3 consultations - mix of attorneys and Enrolled Agents. 2) Start gathering ALL your financial documentation now: bank statements, pay stubs, mortgage/rent, utilities, insurance, car payments, etc. The IRS will want to see everything to determine your ability to pay. 3) Consider your long-term strategy. With your current $95k income and $250k debt, you're looking at either a long-term installment agreement or potentially an Offer in Compromise if your financial situation is truly dire. 4) Don't panic, but don't delay either. The interest and penalties keep adding up daily. Even if you end up on a payment plan, stopping the penalty clock sooner rather than later saves you money. The IRS is actually pretty reasonable to work with when you approach them proactively rather than waiting for them to come after you. You're doing the right thing by addressing this head-on.