This is such a smart approach to teaching your kids about work and saving! I went through something similar with my landscaping business and my two sons. One thing I'd add that hasn't been mentioned yet - make sure you're paying them at least minimum wage for your state. The IRS will scrutinize family arrangements, and paying below minimum wage could trigger questions about whether it's a legitimate employment relationship or just an allowance disguised as wages. Also, consider having them open their own business bank accounts to deposit their paychecks. It creates a clear paper trail and teaches them banking responsibility. My boys loved seeing their money grow in their accounts, and it made the Roth IRA conversations much more meaningful when they could see their actual earned income. The documentation aspect can't be overstated - I keep a simple spreadsheet with dates, hours, specific tasks completed, and even photos of their work. Makes tax time much smoother and gives you confidence if any questions ever come up.

Great question! I actually went through this exact situation last year with my property management business. You're on the right track with wanting to hire your kids, but definitely go the employee route rather than 1099 contractors - the IRS is very particular about legitimate contractor relationships, and with family members doing directed work, it's much safer to treat them as employees. A few practical tips from my experience: Make sure you have them fill out I-9 forms and W-4s just like any other employee, even though they're your kids. Keep detailed time logs - I use a simple app where they clock in/out with photos of the work site. For the types of tasks you mentioned (painting, cleaning, landscaping), those are perfect for teens and generally allowed under child labor laws. The Roth IRA strategy is fantastic! Since they'll likely be in the 0% tax bracket with $3,000 annual income, they can essentially get tax-free money into retirement accounts that will compound for 50+ years. Just remember they can only contribute up to their actual earned income, so if one kid earns $2,000, that's their max Roth contribution for the year. One last thing - consider having them complete basic safety training for any tools they'll use. It shows you're treating this as a legitimate business operation and helps protect everyone involved.

This is such a helpful thread! I'm dealing with a similar situation where my family's construction business has a multi-member LLC that owns two single-member LLCs (one for residential, one for commercial work). Based on everyone's input here, it sounds like we've been overcomplicating things by preparing separate books for potential separate filings. The confirmation that everything consolidates onto one 1065 is exactly what I needed to hear. One question though - when you're consolidating the income and expenses from both SMLLCs onto the 1065, do you need to use specific line items or schedules to show the different business activities? Or does it all just get lumped together as partnership income/expenses regardless of which SMLLC generated it?

This thread has been incredibly helpful! I'm in a similar boat with my landscaping business - we have a multi-member LLC that owns two SMLLCs (one for lawn care, one for hardscaping). I've been stressing about this for weeks because my previous accountant moved and the new one I consulted gave me conflicting advice about whether I needed three separate 1065s. Reading through all these responses, especially the confirmation from actual IRS agents that some folks were able to reach, gives me confidence that we only need the one consolidated 1065. The tip about maintaining separate bank accounts even though they're disregarded entities is gold - we already do this but I was wondering if it was necessary. Sounds like it makes the consolidated filing much cleaner when everything is properly separated on the books even if it all flows to one tax return. Thanks everyone for sharing your experiences. This community is such a valuable resource for navigating these complex business structures!

I went through almost the exact same situation last year with a small foreign fund investment that I had no idea would create such a tax nightmare. After lots of research and consulting with a tax professional, here's what I learned: You're correct that the $25,000 exemption applies to the ENTIRE Form 8621, not just Part I. The key is in Treasury Regulation 1.1298-1(c)(2) which provides complete relief from filing if you meet all the criteria. For your $65 investment, assuming you haven't received any distributions or sold any shares, you should qualify for the complete exemption. Just make sure to document this decision in case you're ever questioned. My advice? If you're planning to continue investing internationally, consider switching to US-domiciled international funds (like VTI or VXUS) to avoid future PFIC headaches entirely. The reporting requirements are so disproportionate to small investments that it's often not worth the hassle. Also, keep detailed records of your investment amounts and any distributions (or lack thereof) to support your exemption claim. The IRS burden of proof is on you to show why you didn't file if they ever ask.

I've been dealing with PFIC reporting for several years now, and I want to emphasize something important that hasn't been fully addressed here - the documentation piece is absolutely critical. When claiming the $25,000 exemption, you should keep a formal written memo in your tax files explaining: 1. The total value of all PFIC investments on the last day of your tax year 2. A statement that you received no excess distributions 3. A statement that you recognized no gains from sales/dispositions 4. The specific regulation you're relying on (Treasury Reg 1.1298-1(c)(2)) 5. Copies of year-end statements showing investment values Regarding the statute of limitations - generally it's 3 years from when you file your return, but it can be extended to 6 years if the IRS believes you understated income by more than 25%. For PFIC issues specifically, some practitioners argue there's no statute of limitations if you don't file the required forms, though this is debated. One more critical point: Make sure your foreign funds are actually PFICs before stressing about this. Not all foreign mutual funds qualify as PFICs - they need to meet specific income or asset tests. Sometimes what looks like a PFIC nightmare turns out to be a non-issue because the fund doesn't actually meet the PFIC definition. I'd recommend having a qualified international tax professional review your specific situation at least once, even if just for peace of mind. The cost is usually far less than the stress of wondering if you're compliant.

This happened to me too! They offset $2,800 of my refund for old Pell Grant overpayments that I had completely forgotten about. The frustrating part is that they sent the notice to an address I hadn't lived at in 3 years, so I had zero warning. What really helped was using taxr.ai to understand exactly what was happening with my transcript - it broke down all the codes and showed me that I could apply for a compromise offer since I'm currently unemployed. The $4.99 was totally worth it because it saved me from calling around to different agencies trying to figure out what my options were. Now I'm working on getting the remaining balance reduced through their hardship program. Don't give up hope - there are definitely ways to work with them even after the offset happens!

Oof, this is happening to so many people this year! I went through the same thing in 2023 - they took about $4,500 from my refund for loans I'd been ignoring for way too long. The worst part is feeling blindsided by it, especially when you're counting on that money. One thing I learned is that even if they already took your refund, you can still contact your loan servicer to get on a rehabilitation program or income-driven repayment plan to prevent future offsets. It won't get this year's money back, but it'll protect next year's refund. Also, definitely check if your address is updated with both the IRS and Department of Education - that's usually why people don't get the advance notices. Hang in there, it gets easier once you know what you're dealing with! 💙

Has anyone had luck with the automated phone system? I've been trying for days and it keeps hanging up on me 😭

I just went through this whole process last week and finally got verified! Here's what worked for me: I called first thing Monday morning at exactly 8 AM when they opened, had all my documents spread out on my desk, and got through in about 45 minutes (which felt like a miracle compared to my previous attempts). The rep was super helpful once I got connected. One thing that caught me off guard - they asked for a Form 1040 from my last tax return to verify my identity, which wasn't mentioned anywhere in their initial requirements. So maybe have that handy too! Don't lose hope, it's definitely doable even though the process is frustrating.