Just to add another perspective - I'm an accountant and see this mistake all the time. Companies frequently issue 1099-NECs for expense reimbursements when they shouldn't. The proper way to handle this is exactly as others have mentioned: report the income on Schedule C and offset it with the legitimate business expenses. One additional tip: create a separate business activity description on your Schedule C specifically for this income/expense. Something like "Business Travel Reimbursement" so it's clear to the IRS what this Schedule C represents. That way it's separated from any actual self-employment activity you might have. Remember, the key to avoiding problems is matching the income and expenses exactly so there's zero net profit, and keeping thorough documentation of all reimbursed expenses.

This is exactly why companies need better training on tax form requirements! I've dealt with this same issue multiple times as a tax preparer, and it's always frustrating when businesses incorrectly classify expense reimbursements as non-employee compensation. The Schedule C approach everyone mentioned is absolutely correct - report the 1099-NEC amount as income, then deduct the exact same amount as business expenses. Just make sure you categorize the expenses properly: airfare goes under "Travel," meals at 50% (unless it was a company-provided meal during travel), and hotels under "Travel" as well. One thing I'd add: if any of your reimbursed meals exceeded the federal per diem rates for those locations, you might not be able to deduct the full amount. The IRS has specific per diem rates for different cities, and meal reimbursements above those rates could be considered taxable income. Check the GSA website for the per diem rates that were in effect during your 2023 travel dates. Keep digital copies of all receipts and any communication with Company Z about these reimbursements. The paper trail is crucial if the IRS ever questions why you have a Schedule C with zero net profit.

This whole conversation is making my head spin. I looked into this same thing and the complexity/cost made me abandon the idea. Between GILTI, Subpart F, 962 elections, PFIC rules, annual reporting... I just keep my business structure simple now. In my experience, smaller businesses (<$5M revenue) often spend more on compliance and international tax experts than they save with these structures. The rules are designed to make it difficult for exactly the scenario you described. Just something to consider before going down this rabbit hole. Maybe explore other visa options that don't require such complex tax structures?

I've been through this exact scenario and want to share some practical insights. The complexity everyone's discussing is real, but it's manageable with the right approach. First, regarding your CPA's $12K quote - that's actually reasonable for comprehensive international tax planning. I paid similar amounts and it saved me significantly more in avoided penalties and optimized structures. The issue isn't the cost, it's finding someone who specializes in this area rather than a generalist CPA. On the technical side, your assumption about undistributed funds being shielded is unfortunately incorrect. Under current rules (post-2017 Tax Cuts and Jobs Act), the US has largely eliminated tax deferral for CFCs. GILTI inclusions happen annually regardless of distributions, and the rates can be substantial depending on your structure and jurisdiction. However, there are legitimate ways to optimize this. The Section 962 election mentioned above is huge - it can reduce your effective tax rate on foreign earnings from individual rates (up to 37%) down to corporate rates (21% base, potentially lower with deductions). The foreign tax credit calculations become complex but can provide significant relief in higher-tax jurisdictions. My recommendation: start with the comprehensive analysis (whether through a specialist or service like the ones mentioned), understand your actual tax liability under different scenarios, then decide if the benefits still justify the complexity. Don't make structural decisions based on outdated information about how these rules work.

Thanks everyone for all the helpful info! @Logan - I've been using Square Payroll for about 6 months now and can confirm they do handle most of the federal reporting automatically. One thing I'd add is to make sure you verify your business information is correct in their system, especially your EIN and business address. I had a small typo in my EIN that caused a delay with my 941 filing until I caught it and got it corrected. Square's support was helpful in fixing it, but it's better to catch these things early. Also, definitely keep those separate records you mentioned - they've been super helpful when I needed to reference specific pay periods or double-check calculations.

As someone who's dealt with payroll tax confusion before, I'd definitely recommend getting familiar with Square's tax calendar feature if you haven't already. They send notifications before each quarterly deadline, but it's helpful to know the dates yourself (March 31, June 30, Sept 30, Dec 31 for 941s). One thing that caught me off guard my first year was that while Square handles the federal and state reporting, you're still on the hook if there are any errors or if they miss a deadline. I learned to screenshot my quarterly reports and keep copies of everything they file, just in case I ever need to prove what was submitted and when. The IRS doesn't care if it was your payroll service's mistake - they'll come after you as the employer. Also, make sure you understand what happens if you ever need to switch payroll providers mid-year. Square makes it relatively easy to export your data, but you'll want those detailed records to ensure nothing falls through the cracks during a transition.

Titles aside, make sure you're keeping your business and personal finances totally separate if you go the S Corp route. The IRS looks at S Corps more closely, especially small ones. You'll need a separate business bank account, keep good records, and be careful about how you categorize expenses. Just my two cents from someone who went through an audit last year after electing S Corp status for my LLC. The business card title wasn't a problem but they definitely scrutinized my salary vs distributions ratio carefully!

Great question! I went through this same decision process last year. You can definitely use "CEO" on your business cards and marketing materials - it's purely a business title and has zero impact on your tax status with the IRS. The key thing to remember is context matters. For internal business purposes (business cards, LinkedIn, website, etc.), use whatever title feels right - CEO, President, Founder, etc. But on official tax forms and state filings, you'll still need to use the proper LLC terminology like "Member" or "Managing Member" depending on your LLC structure. One thing I wish someone had told me earlier: if you're serious about the S Corp election, start planning for the payroll requirements now. You'll need to pay yourself a "reasonable salary" as an employee, which means setting up payroll, withholding taxes, and filing quarterly reports. It's more administrative work but can save significant money on self-employment taxes if your business is profitable enough. The title change is the easy part - it's all the operational changes that come with S Corp taxation that require more attention!

Ugh, this is so relatable! The same thing happened to me in 2023. My bank (Chase) rejected my direct deposit for some reason they never fully explained, and I had to wait for a paper check instead. Here's what I learned from that experience: 1. Your transcript will definitely update with code 846 and the date they mail the check - that's your most reliable source of info 2. From that 846 date, expect 8-12 business days for delivery (I'm on the East Coast and mine took 10 business days exactly) 3. The IRS typically processes and mails checks in batches, usually mid-week The waiting is absolutely nerve-wracking when you need the money, but the paper checks are pretty reliable once they're actually sent. I'd recommend checking your transcript every few days rather than calling the IRS since their phone system is basically useless for getting real updates. And definitely sign up for USPS Informed Delivery if you haven't already - seeing that preview of your mail each morning will save you from the daily mailbox anxiety! Hang in there, it'll come! 💙

This is such a common issue unfortunately! The same thing happened to me two years ago with my refund. What I found helpful was setting up text alerts through my bank so I'd know immediately if any deposits were rejected - turns out they had flagged it as "unusual activity" since I'd never received a deposit that large from the government before. One thing that might help while you're waiting: if you have a smartphone, you can also download the USPS mobile app in addition to Informed Delivery. It sometimes updates faster than the email notifications and you can track any mail pieces that have tracking numbers. Also, just a heads up - when the check does arrive, make sure to deposit it as soon as possible. IRS refund checks are only valid for one year from the issue date, but banks sometimes hold them for longer verification periods since they're government checks. Most people don't have issues, but it's good to know just in case! The waiting really is the worst part, but hang in there - once that 846 code shows up on your transcript, you're in the home stretch! 🤞