


Ask the community...
5 One additional thing to consider - if you're claiming your son as a dependent on your taxes, make sure you're indicating that correctly on his return. If TurboTax thinks he's filing independently when he's actually a dependent, that could cause calculation issues too!
This is such a common issue with student internships! The key thing to check first is which box on the 1099-MISC is filled out. If it's Box 3 (Other Income) rather than Box 7, then it's NOT self-employment income and shouldn't be subject to that 15.3% SE tax. Many tax software programs automatically assume 1099-MISC = self-employment, but that's not always correct. If it's in Box 3, you'd report it as miscellaneous income on Schedule 1 instead of Schedule C, which would eliminate most of that $782 tax bill. If it IS self-employment income, then yes, you can offset it with legitimate business expenses - transportation to the internship, supplies he had to purchase, portion of phone/internet used for work, etc. Even simple things like mileage can add up to significant deductions. The misclassification issue is real too - many interns should receive W-2s instead of 1099s, but fighting that battle with the company can be time-consuming. Sometimes it's easier to just file correctly with the 1099 and claim appropriate deductions.
Does anyone know if you can e-file a return with a pending ITIN application? My tax software keeps rejecting it saying I need a valid ITIN or SSN.
Unfortunately you can't e-file without a valid ITIN/SSN. That's one of the main limitations. You have to paper file when applying for an ITIN - there's no way around it. The system literally can't process the return electronically without a valid identification number.
I went through this exact same situation about 6 months ago and can confirm what others have said - the IRS language is confusing but they do process your return and hold your refund until you get the ITIN approved. In my case, the rejection was due to insufficient identity documentation. What really helped me was keeping detailed records of everything. I created a simple spreadsheet tracking: - Original application date - Rejection notice date and reason - Resubmission date - All documents included in resubmission - Follow-up call dates and notes When I reapplied, I included a cover letter explicitly stating "ITIN Reapplication - Previous Application Rejected" and referenced my original tax return by form type and approximate filing date. This seemed to help them connect everything in their system. One tip that saved me time: before mailing my reapplication, I made copies of absolutely everything and took photos of the package before sealing it. The IRS processing can be slow, and having that documentation was helpful when I called for status updates. The whole process from rejection to finally getting my ITIN and refund took about 14 weeks total, but once the ITIN was approved, the refund came pretty quickly (about 3 weeks after that). Stay patient and make sure you address exactly what they flagged in the rejection notice. Good luck!
This is really helpful advice about keeping detailed records! I'm just starting this process after my ITIN got rejected last week. Quick question - when you say you referenced your original tax return in the cover letter, did you include the actual return filing confirmation number or just general details like "Form 1040NR filed approximately March 15th"? I want to make sure I give them enough info to match everything up but I'm not sure how specific to be.
This is a great question and one that comes up frequently with multi-entity business structures! Based on what you've described, this arrangement is definitely doable, but there are several key considerations to get right: **Documentation is crucial** - You'll want formal service agreements between the LLCs outlining the scope of work, payment terms, and rates. Simple invoicing might not be sufficient if you get audited. **Fair market value** - The rates your single-member LLC charges should be comparable to what an unrelated third party would charge for similar services. This protects against IRS challenges about inflated expenses. **Operating agreement compliance** - Make sure your Trio Consulting LLC's operating agreement doesn't restrict this type of arrangement, and get explicit approval from your partners. **Tax implications** - Your single-member LLC income will flow through to your personal return, and you'll owe self-employment taxes on it. Meanwhile, Trio Consulting can deduct these payments as legitimate business expenses. One thing to consider: since you're essentially wearing two hats (partner in Trio AND service provider through Solo Marketing), maintain clear boundaries about which work belongs to which entity to avoid conflicts with your partners. Have you discussed this arrangement with your partners yet? Their buy-in will be essential for making this work smoothly.
This is really comprehensive advice! I'm particularly interested in the "fair market value" point you mentioned. How do you typically determine what constitutes fair market value for marketing services between related entities? Is it enough to research what freelance marketers charge in your area, or does the IRS expect more formal documentation like getting quotes from unrelated third parties for comparison?
Great question about LLC payment structures! I've been dealing with something similar and want to add a few practical points: **State-specific considerations** - Don't forget to check your state's LLC laws too. Some states have additional requirements for related-party transactions or disclosure obligations that go beyond federal tax rules. **Quarterly estimated taxes** - Since you'll have income flowing from both LLCs, make sure you're calculating estimated tax payments correctly. The income from your single-member LLC billing the multi-member LLC could push you into different tax brackets or trigger additional Medicare taxes. **Record keeping** - Keep meticulous records of time spent, specific deliverables, and communications about the work. If the IRS ever questions whether this was legitimate business activity vs. just moving money around, detailed contemporaneous records will be your best defense. **Consider liability implications** - Having your single-member LLC provide services to the multi-member LLC could create additional liability exposure depending on the type of marketing work you're doing. Make sure your insurance coverage accounts for this arrangement. The arrangement itself is totally legitimate as others have mentioned, but the devil is really in the details of execution and documentation. Better to over-document than under-document with these types of related-party transactions!
Really appreciate you bringing up the state-specific considerations! I hadn't thought about potential state-level disclosure requirements. Do you happen to know if there's a good resource for checking these state-specific LLC rules? I'm in California and want to make sure I'm not missing any additional compliance requirements beyond the federal tax considerations everyone's discussed. Also, your point about liability implications is spot-on. I'm wondering if having separate professional liability insurance for each LLC might be necessary, or if there are ways to structure the coverage to protect both entities under one policy?
I'm actually a tax preparer and want to add some context. The mortgage interest deduction was never really designed to be "unfair" to renters - it's a legacy policy from when almost all interest was deductible (including credit cards, car loans, etc). Those other deductions were eliminated but mortgage interest stayed because of heavy lobbying from the real estate industry. With the increased standard deduction ($13,850 single/$27,700 married in 2025), about 85% of taxpayers don't itemize anymore anyway. So many homeowners aren't even getting that benefit unless they have very large mortgages.
But what about property tax deductions? Those still benefit homeowners and not renters, right? Even though technically renters are paying property taxes through their rent.
That's exactly right about property taxes. Renters do indirectly pay property taxes through their rent, but they get no deduction for it while homeowners can deduct up to $10,000 annually (thanks to the SALT cap). And yes, the real estate industry has historically had very effective lobbying. The National Association of Realtors is one of the largest political donors in the country and has successfully defended the mortgage interest deduction for decades, even when other interest deductions were eliminated in the 1986 tax reform. What's particularly frustrating is that many economists argue the mortgage interest deduction actually drives up housing prices by increasing demand, which ironically makes it harder for renters to eventually buy homes. So it's a policy that benefits current homeowners at the expense of future homebuyers.
As someone who's been renting for over a decade while watching friends benefit from homeowner tax breaks, I completely understand your frustration. The system really does feel stacked against renters, especially when you consider that we're often paying the same or more monthly than mortgage holders but getting zero tax relief. One thing that helped me was learning about the Renter's Credit available in some states. I'm in California and discovered we have a renter's credit that I'd been missing for years - it's not huge, but every bit helps when you're trying to save for that elusive down payment. Also, if you do any freelance work or have a side gig, you might be able to claim a portion of your rent as a home office deduction. I started doing some consulting work from my apartment and was able to deduct about 10% of my rent costs through the simplified home office deduction method. The whole system definitely needs reform though. It's particularly frustrating that landlords can deduct their mortgage interest, property taxes, maintenance, and even depreciation on the same property we're paying rent for, while we get nothing. At minimum, there should be some federal renter's credit to level the playing field.
This is exactly the kind of comprehensive perspective I was hoping to find! The California renter's credit is something I'll definitely look into - I had no idea states like CA offered anything for renters. Your point about the home office deduction for side work is really helpful too. I do some freelance graphic design work from my apartment, so I might actually qualify for that 10% deduction you mentioned. Do you know if there's a minimum amount of freelance income required, or can any legitimate business use of your home space qualify? And you're absolutely right about the fundamental unfairness - it's maddening that my landlord gets to deduct literally everything related to the property I'm paying him to live in, while I get zero recognition that I'm covering those costs through my rent payments. The system really does seem designed to keep renters as renters and reward those who already have enough capital to buy property.
Fiona Sand
yall need to chill fr. its only been 2 weeks. last year took me 6 weeks to get my IL refund š
0 coins
Nathaniel Mikhaylov
ā¢6 WEEKS?! nahhh i cant wait that long š
0 coins
Andre Lefebvre
Same here! Filed my IL return on 1/28 and still showing "processing" with no DDD. The PATH Act is definitely causing major delays this year. I called the IL tax line yesterday and they said they're processing returns in the order received but with extra verification steps for EITC/ACTC claims. Hang tight - we're all in this together! š¤
0 coins