Has anyone dealt with an innocent spouse relief situation? My friend is dealing with something similar but her ex apparently hid some income and now she's on the hook for taxes on money she never knew about. She's making payments but I told her she should look into innocent spouse relief.

This is a great question that confuses a lot of people! Just to add to what others have said - when you set up that payment plan under your name, you're actually setting it up for both of you since you filed jointly. The IRS doesn't track "your portion" vs "your spouse's portion" internally. One thing that might help clarify this: if you log into your IRS online account, you should be able to see the current balance and payment history for your joint returns. Your spouse should also be able to see the exact same information when they log into their own IRS account - because it's the same debt. Also, just a heads up - if you're planning to continue filing jointly in future years, any refunds you might get will automatically be applied to your existing balance before you receive anything. Same goes for any economic impact payments or other credits. The IRS will offset those against your outstanding balance automatically.

One thing to consider - if the IRS gives you the June 2021 effective date and you keep the S election, you'll need to file amended returns for any periods you treated as an S corp before that date. That could mean filing C corp returns for 2020 and part of 2021, which might trigger some nasty tax consequences. Have you calculated what the actual tax difference would be between the two scenarios? Sometimes it's not as bad as people expect.

I went through almost the exact same situation last year with my LLC's S corp election. The IRS initially gave me an effective date that was 18 months later than what I requested, which would have cost me thousands in additional self-employment taxes. Here's what worked for me: I submitted a detailed letter specifically citing Revenue Procedure 2013-30 Section 5.03, which provides relief for situations where the original election was filed but not processed due to IRS administrative issues. The key is proving you had the intent to be an S corp from your requested effective date. I included copies of my original Form 2553 (even though it apparently got lost), certified mail receipts, all my S corp tax returns I'd been filing, and a timeline showing consistent S corp treatment. I also referenced the IRS's own acknowledgment of processing delays during COVID as reasonable cause for the late election. The whole process took about 3 months, but they ultimately approved my original effective date. Before considering revocation, I'd strongly recommend trying this approach first. The documentation requirements are pretty specific, so make sure you hit all the points in Section 5.03 of the Revenue Procedure. If you need help getting through to the IRS to check on your current request status, definitely consider using one of those callback services mentioned above - it saved me weeks of frustration trying to get through on my own.

Great questions about the LLC timing! I actually went through this exact same situation with my Golden Retriever breeding operation two years ago. Here's what I learned from experience: I'd recommend starting the LLC sooner rather than later, especially since your boss (who's already an established breeder) is advising it. The key is demonstrating business intent from the beginning - which you clearly have since you're planning this systematically. For tracking expenses, definitely start recording everything now: premium dog food, supplements, vet visits (including health testing which can be expensive for breeding dogs), training classes, grooming supplies, crates, whelping boxes, and any breeding-specific equipment. Don't forget about registration fees, health clearances, and even travel costs if you plan to show your dog or travel for breeding. One thing I wish I'd known earlier - keep detailed records of everything, even small purchases. Take photos of receipts and store them digitally. The IRS really scrutinizes breeding businesses because some people try to write off pet expenses as business deductions when they're really just hobbyists. Also consider getting business insurance once you start breeding - liability coverage is important when you're selling puppies to families. The premiums are deductible as a business expense too. The LLC protects your personal assets if anything goes wrong, and starting it now means all your prep expenses are legitimate business deductions from day one. Just make sure you're serious about turning a profit - the IRS hobby loss rules are real!

Starting an LLC for your dog breeding business is definitely a smart move, especially with your boss's guidance! I've been running a small breeding operation for about three years now and wished I had started the LLC structure earlier. One thing I'd add to all the great advice here - consider opening a dedicated business checking account as soon as you form the LLC. This makes expense tracking SO much easier and provides clear separation between personal and business expenses, which the IRS loves to see. I use a simple spreadsheet to categorize all my breeding-related purchases, but having that separate account makes reconciliation much cleaner. Also, regarding timing - you definitely don't need to wait until after the first litter. All your preparation expenses (health testing, premium nutrition, training, equipment) are legitimate business expenses if you're operating with genuine profit intent. The fact that you're planning systematically and taking advice from an established breeder shows clear business purpose. Don't forget about networking expenses too! Joining breed clubs, attending dog shows (even as a spectator to learn), and breed-specific seminars are all deductible business expenses that help establish your credibility in the breeding community. French Bulldogs have such a dedicated community - getting connected early will pay dividends later. One last tip - start building relationships with a good reproductive vet now, even before you need breeding services. They can be invaluable resources for timing, health monitoring, and ensuring successful outcomes. Good luck with your new venture!

Sorry to jump in with a basic question, but can someone explain WHY law partners have to pay self-employment tax in the first place? I thought that was just for independent contractors and freelancers. If they're partners in a big established firm, why aren't they just considered employees for tax purposes?

This is a really helpful thread! I'm a CPA who works with several law firm partners, and I wanted to add a few practical considerations that might be useful: 1. **Quarterly estimated payments are crucial** - Partners earning $1.9M need to be very careful about underpayment penalties. The IRS expects you to pay 110% of last year's tax liability (or 90% of current year) through withholdings and estimated payments. 2. **State taxes vary significantly** - Some states don't have self-employment tax equivalents, while others (like California) have additional taxes that can really add up for high earners. 3. **Retirement planning is actually a huge advantage** - Partners can often contribute much more to retirement plans than W-2 employees. For 2025, SEP-IRA contributions can go up to 25% of net self-employment income or $70,000, whichever is less. 4. **Business expense deductions** - Partners can deduct things like continuing legal education, bar association dues, professional subscriptions, and even portions of home office expenses if they work from home regularly. The tax burden is definitely substantial, but the flexibility and deduction opportunities often make it more manageable than it initially appears. I always recommend partners work with a CPA familiar with partnership taxation - the rules are complex and mistakes can be expensive.

Don't forget that if you absolutely can't get your W2, you can file Form 4852 (Substitute for W-2) with your tax return. You'll need to estimate your wages and tax withholding as accurately as possible using your last pay stub. Not ideal, but it's there as a last resort if you truly can't get your W2s any other way.

Another option that worked for me was checking if your former employers used a payroll service like ADP or Paychex. Even after leaving on bad terms, you might still be able to access your employee portal if you remember your login credentials. Many people don't realize these accounts often stay active for a while after termination. I was able to download my W2 directly from ADP's website without having to contact my awful former boss at all. Just go to the payroll company's website and try logging in with your old credentials - worst case scenario it doesn't work, but if it does, you can get your W2 immediately.