Has anyone used an umbrella LLC with a separate tax election for the entity? My CPA suggested forming an LLC but then electing to have it taxed as an S-Corporation (Form 8832 followed by Form 2553). He said it gives the liability protection and flexibility of an LLC with the tax benefits of an S-Corp.

This is a great discussion thread! I'm in a very similar situation - household income around $380K and considering a side business. One angle I haven't seen mentioned much is the state-level implications. I'm in Texas (no state income tax), but for those in high-tax states like California or New York, the state treatment of S-Corps vs LLCs can significantly impact the overall analysis. Some states don't recognize S-Corp elections and will tax the entity at the corporate level regardless. Also, regarding the ownership question - even if your spouse isn't actively involved, there could be estate planning benefits to joint ownership, especially if the business becomes successful. If something happens to you, having your spouse as a co-owner can simplify business continuity compared to having to transfer a sole proprietorship through probate. Has anyone factored in the potential exit strategy implications? If you plan to eventually sell the business or bring in outside investors, the corporate structure (even if taxed as S-Corp) might be more attractive to buyers than an LLC structure.

11 One thing nobody mentioned - if your 1099 income is below $400 for the year, you don't need to file Schedule SE because you won't owe self-employment tax. Saved me some paperwork last year!

Great question! I went through this exact same confusion last year. You definitely need to mail all the schedule forms along with your 1040 and W-2. The schedules aren't just supporting documents - they're integral parts of your tax return that show how you calculated the numbers on your main form. Make sure to arrange them in the correct order: Form 1040 on top, then your schedules (typically Schedule 1, then C, then SE), and attach your W-2 Copy B where indicated. Use one staple in the upper left corner and send everything via certified mail so you have proof of delivery. Don't worry about messing up - you're asking the right questions! The IRS processing centers are used to handling returns with multiple income sources. Just double-check that you've signed and dated everything before mailing.

Everyone's giving good advice about claiming a domestic partner, but don't forget to consider the future! When your partner finishes law school and starts working, your tax situation will change dramatically. My wife and I were in the same boat (I supported her through med school), and we actually ended up paying MORE in taxes after marriage because of the marriage penalty when both people have good incomes.

Just wanted to chime in as someone who works in tax preparation - you're on the right track! Based on your description, your domestic partner would likely qualify as a "qualifying relative" dependent. The key things to document are: 1. Keep receipts for all the expenses you're paying (rent, utilities, groceries, phone, insurance) 2. Get a statement of his total student loan disbursements for the year 3. Track any income he earns from tutoring or other sources Since you mentioned he only makes about $2,500 from tutoring and the loans only cover tuition/books while you handle all living expenses, you should easily meet both the income test (under $5,000) and the support test (you're providing more than 50% of total support). One thing I always tell clients - calculate the actual dollar amounts to be sure. Add up everything: tuition, books, rent, food, utilities, transportation, clothing, medical expenses, etc. Then make sure your contributions are more than half of that total. It sounds like they definitely are, but having the numbers documented will give you confidence and protection if questions ever arise. The dependent exemption can be a significant tax benefit, so it's worth claiming if you qualify!

Quick tip that helped me - if you can pay even part of what you owe immediately, do it! Even paying $500-1000 of your balance shows good faith and might make them more willing to work with you on the rest. I was able to get on an installment plan for the remaining balance and they held off on filing the lien.

Don't let this overwhelm you - a Notice of Federal Tax Lien sounds scarier than it actually is in practice! I went through something very similar about 18 months ago when I owed around $4,200 to the IRS after some freelance work complications. The key thing to remember is that the IRS actually WANTS to work with you - they'd rather get their money through a payment plan than go through the hassle of seizing assets. When I called them (after many attempts to get through), the agent was surprisingly understanding and helped me set up a $130/month payment plan. Here's what I wish I'd known earlier: once you're on an approved installment agreement, they typically won't file the lien as long as you keep making your payments on time. Even if they do file it, you can request a lien withdrawal after making just 3 consecutive payments under your agreement. My biggest mistake was waiting so long to contact them. The penalties and interest kept piling up while I was avoiding the situation. Act now - call them first thing Monday morning, explain your job loss situation, and they'll likely be very willing to work with you on affordable monthly payments. You've got this!

Something similar happened to me and it turned out I had checked the wrong box on step 2 of the W4. I had checked 2(b) which is the "use the multiple jobs worksheet" option instead of 2(c) "if there is only one job total". This made the system think I needed to withhold at a higher rate to cover multiple jobs. Rookie mistake but easy to fix!

The W4 form definitely takes some getting used to after the old allowances system! Based on your situation, I'd suggest double-checking a few key areas: 1. **Step 1**: Make sure you selected "Married filing jointly" not "Single or Married filing separately" 2. **Step 2(c)**: Since your spouse doesn't work, you should check the box that says "If there is only one job total" 3. **Step 3**: Enter $2,000 for your child (qualifying children under 17 get the full Child Tax Credit) Missing any of these could easily cause the overwithholding you're experiencing. The good news is you can submit a corrected W4 to your payroll department anytime - it usually takes effect within 1-2 pay periods. For future reference, the IRS Tax Withholding Estimator tool on their website is really helpful for getting your withholding dialed in perfectly. It walks you through your exact situation and tells you exactly what to put on each line of the W4. Don't worry about the money already over-withheld - you'll get it back as a refund when you file your taxes!