Check if your state has minimum tax requirements even for inactive LLCs. Here in California, we have that annoying $800 annual tax even if you made $0. Learned this the hard way with my dormant real estate LLC and got hit with penalties. Also, if you're definitely closing the LLC, it might be worth filing the final tax form so there's a clear record that everything was properly wrapped up. Some states require a "tax clearance" certificate before they'll process dissolution paperwork.

One thing to consider is timing - if you're planning to dissolve the LLC anyway, you might want to do it sooner rather than later to avoid any potential 2024 compliance requirements. Even though 2023 was inactive, keeping the LLC open through 2024 could trigger additional state filing obligations depending on where you're located. Also, when you do file for dissolution, make sure to indicate the effective date carefully. Some states allow you to dissolve retroactively to avoid additional tax periods, while others require dissolution to be effective going forward. This could impact whether you need to worry about any 2024 requirements. Since you've already returned all funds and covered the expenses personally, you're in a clean position to close everything out. Just double-check your state's dissolution requirements - some want to see that all tax obligations are current before they'll approve the dissolution paperwork.

This is exactly what happened to me when I first started doing freelance work alongside my regular job! The self-employment tax shock is real and unfortunately very normal. Here's what's happening: At Domino's, your daughter and her employer each pay 7.65% for Social Security and Medicare taxes (totaling 15.3% combined). But with self-employment, she's both the employee AND the employer, so she pays the full 15.3% herself. Add regular income tax on top of that, and you're looking at a significant tax burden. A few things to check that might help reduce her bill: **Business expenses she might have missed:** - All materials for jewelry making (beads, findings, wire, tools) - Shipping costs and packaging materials - Business use portion of her cell phone and internet - Any photography equipment for product shots - Marketing expenses (even small social media ad costs) - Storage containers or workspace setup costs **The QBI deduction** - She should qualify for the 20% Qualified Business Income deduction which can provide substantial savings on her net business profit. For next year, definitely set up quarterly estimated tax payments using Form 1040ES. I learned this the hard way too! Setting aside about 30% of self-employment income usually covers both income tax and self-employment tax. The amount sounds painful but is unfortunately typical when you combine both taxes plus no withholding throughout the year. Double-check all possible deductions and consider having a tax pro review it if you're unsure about anything.

The shock you're experiencing is completely normal for first-time self-employed individuals! Your daughter is essentially paying both the employee AND employer portions of Social Security and Medicare taxes on her jewelry business income. Here's what's happening: At Domino's, she pays 7.65% in payroll taxes while her employer pays the matching 7.65%. For self-employment, she pays the full 15.3% herself, PLUS regular income tax on top of that. Some ways to potentially reduce her tax burden: **Double-check these business deductions:** - All jewelry-making materials (beads, wire, clasps, tools) - Shipping supplies and postage costs - Business portion of phone/internet if used for social media marketing - Photography supplies for product photos - Packaging materials and labels - Any craft fair booth fees or online marketplace fees **Make sure she's getting the QBI deduction** - This 20% deduction on qualified business income could save her several hundred dollars and should be calculated automatically by most tax software. **For future planning:** She should definitely make quarterly estimated payments next year. A good rule is setting aside 25-30% of self-employment earnings. She can use Form 1040ES or pay online through the IRS website. The $4,900 bill is painful but unfortunately typical when combining both self-employment tax and income tax with no withholding. If you haven't already, consider having a tax professional review the return to ensure you're claiming all eligible deductions - it might be worth the fee given the size of the tax bill.

Oh my gosh I was STRESSING about this same issue last month! If you need to make your April 15th estimated payment but are worried about accuracy, just pay what you reasonably think you'll owe based on last year's numbers. The safe harbor rule (Publication 505) says you won't face penalties if you pay at least 100% of last year's tax (or 110% if your AGI was over $150k). You can always adjust your June 15th estimated payment once your return is processed! That's what I did and it saved me so much anxiety!

Based on my experience working with IRS systems, the Friday morning update cycle is accurate, but there's an important detail many people miss: the IRS actually runs TWO separate update processes. The first is the Master File update (which affects transcripts) that typically completes between 2-6am ET on Fridays. The second is the transcript display system update that can take an additional 2-4 hours to reflect those changes. For business returns specifically, I've noticed that Schedule C income over $25,000 or any foreign account reporting (FBAR/8938) triggers additional review cycles that can extend processing by 2-3 weeks beyond the normal timeline. Since you mentioned "significant business income," this could explain your delay. One tip: if you need documentation for estimated tax calculations before your transcript updates, you can request a "Verification of Non-filing" letter online, which sometimes processes faster and can serve as interim proof while waiting for full transcript availability.

Just to throw another option out there - could you hire your friend as a consultant or for some administrative work they could do remotely? Then it becomes a legitimate business expense, and they get income they can use for medical bills. You'd need to make sure they actually provide services and you document everything well, but it might be more straightforward than setting up a charity.

I really appreciate everyone's thoughtful responses here. As someone new to this community, I'm dealing with a similar situation where my small business wants to help a family member with medical expenses. From reading through all the comments, it seems like the key takeaway is that direct donations to individuals aren't deductible no matter how you label them, but there are some legitimate alternatives worth exploring. The suggestions about QSEHRAs and Medical Expense Reimbursement Plans caught my attention, especially if there's genuine work that could be performed. I'm also intrigued by the 501(c)(3) option, though the 5-month timeline might be challenging if the need is urgent. The fiscal sponsorship approach while waiting for approval sounds promising. One question I have - for those who've successfully implemented any of these strategies, what kind of documentation did you find most important to maintain? I want to make sure everything is completely above board from day one. @Beatrice Marshall - your situation sounds really tough, and it's clear you genuinely want to help while being responsible about taxes. Whatever approach you choose, it sounds like getting official IRS guidance might be worth the investment given the amounts involved.

Ugh same boat here. Been showing zeros for a week now. The wait is killing me 😫

I've been dealing with IRS account balance fluctuations for years and can offer some insight. What you're experiencing is actually pretty common, especially during processing periods. The IRS systems run batch updates overnight, and your account can show different amounts depending on when various transactions are processed. A few things that could be happening: - Payments you made are still being applied to your account - The IRS is processing correspondence or adjustments - System maintenance is causing temporary display issues - Your account is being reviewed for some reason Since you mentioned seeing $1,200 owed for 2023 yesterday and $750 for 2022 before that, but now everything shows $0.00, it's likely that payments or credits are being processed. The fact that all years now show zero is actually a good sign - it suggests your obligations may be satisfied. I'd recommend downloading your account transcripts (if available) to get a more detailed view of what transactions are being processed. The online account view is just a summary and can be misleading during active processing periods. Give it another week or two, but if the fluctuations continue beyond that, definitely call the IRS to get clarification on your account status.