From your description, sounds like you might have a reasonable salary already. But another advantage of S Corp status you should be taking advantage of - the pass-through income isn't subject to self-employment tax (15.3% between Social Security and Medicare). That's a huge savings compared to running the same business as a sole proprietorship where ALL your profit would face SE tax. That's why the salary vs. distribution balance matters so much. You need to pay FICA taxes on your salary, but not on distributions. Just don't go too low on salary or you'll raise red flags.

One thing that might help clarify this for you - think of your S Corp as essentially "transparent" for tax purposes. The IRS basically pretends it doesn't exist when calculating your personal taxes. Your $140k salary gets reported on your W-2 and taxed as regular wages. The remaining $335k gets reported on Schedule K-1 and flows to your personal return as pass-through income. Then your TOTAL income ($475k plus any other personal income) determines which tax brackets apply to different portions. So yes, most of your income will likely fall into higher brackets, but remember that tax brackets are marginal - you don't pay 37% on all $475k, just on the portion that exceeds the 37% bracket threshold. Also definitely look into that QBI deduction mentioned earlier - as a design business, you should qualify for up to 20% deduction on the pass-through portion, which can significantly reduce your effective tax rate on that $335k. Just make sure your total taxable income doesn't push you into the phase-out ranges where the deduction gets limited.

Just FYI, there's a special charitable giving deduction for 2025 that lets you deduct up to $600 for married filing jointly ($300 for single) EVEN IF YOU TAKE THE STANDARD DEDUCTION! So you can get at least some benefit from your church donation regardless.

Thanks everyone for the helpful discussion! This has been really educational. I just wanted to clarify one more thing - since we're definitely taking the standard deduction this year, should I still keep all my donation receipts and records from our church? I'm wondering if it's worth tracking everything just in case our situation changes in future years, or if there's any other reason the IRS might want to see proof of these donations even when we're not claiming them as deductions. Also, that "bunching" strategy several people mentioned sounds interesting - basically doubling up donations every other year to get over the standard deduction threshold. Has anyone actually tried this approach successfully?

To all those having trouble reaching a human at IRS. I just ran across this video that gave me a shortcut to reach a human. Hope it helps! https://youtu.be/_kiP6q8DX5c

If your call gets disconnected after paying for the service, you should definitely contact Claimyr's customer support immediately. Most legitimate callback services have policies in place for technical issues like this. Document the time of disconnection and your payment confirmation. You can also try calling the IRS directly using their main line (1-800-829-1040) - while wait times are long, it's free. For future reference, consider calling early morning or late in the week when call volumes might be lower.

I'm actually a tax preparer and see this scenario often. Just to be super clear: if you received NO compensation whatsoever (no wages, no benefits, nothing of monetary value) from the second job during 2024, then there's nothing to report on your 2024 return. The employer won't issue a W-2 for zero dollars. Just keep those employment documents for your 2025 taxes when you actually start earning from that position.

This is a really common question that trips up a lot of people! The key thing to remember is that tax reporting is based on actual income received, not employment status or paperwork. Since you didn't earn any money from that second job in 2024, there's no income to report and the employer won't even generate a W-2 for you. Just make sure to keep all those employment documents you signed - you'll need them for reference when you do start earning income from that job in 2025. TurboTax will handle everything correctly when you input only the jobs that actually paid you during the tax year. You're doing everything right by only including income you actually received!

I went through this same verification process about 6 months ago and completely understand your concern about scams! Here's what helped me feel confident it was legitimate: The real Letter 5071C will have: - Official IRS letterhead with the Department of Treasury seal - Your correct name, address, and the last 4 digits of your SSN - Reference to your specific tax year (2023) and filing status - The exact website: idverify.irs.gov (no variations) - Phone number 800-830-5084 for the Identity Protection Specialized Unit The verification process itself asks questions only you would know - things from your previous year's tax return (specific line amounts) and credit report information like previous addresses, loan details, etc. It took me about 15 minutes once I had my 2022 return and ID ready. If you're still unsure about the letter's authenticity, you can call the main IRS line at 800-829-1040 and ask them to confirm whether they sent you a 5071C letter. They can verify it without you having to give any sensitive info to a potentially fake number. My refund was released about 3 weeks after I completed the verification, so there is light at the end of the tunnel!

I got the exact same letter about 3 months ago and totally understand your paranoia - my first instinct was that it had to be a scam too! But it turned out to be completely legitimate. Here's what helped me verify mine was real: The letter had the official IRS letterhead with Treasury Department seal, referenced my specific 2023 tax return, showed the last 4 digits of my SSN, and directed me to idverify.irs.gov (exactly that URL - no variations). The phone number matched what others have mentioned: 800-830-5084. When I did the online verification, they asked very specific questions about my 2022 tax return (exact amounts from certain lines) and credit-related info like previous addresses and account details. It was actually pretty straightforward once I had my documents ready - took about 25 minutes total. The Fresno address you mentioned is definitely legitimate - that's one of their main processing centers. If you're still worried, you can always call the main IRS customer service line at 800-829-1040 first to confirm they actually sent you a 5071C letter before proceeding with verification. My refund was released exactly 21 days after I completed the verification process. Hang in there - it's stressful but totally worth getting through!