I think everyone's missing something here. While buying stocks/ETFs with company money doesn't create a deductible expense, there could be strategic reasons to do it anyway. My S-corp holds some investments as part of our cash management strategy. The key is understanding it won't reduce your current tax liability. Also, talk to your accountant about the Qualified Business Income deduction (Section 199A) - if your business qualifies, it can give you a deduction up to 20% of your qualified business income. Much more valuable than trying to hide money in investments.

This is a really common question for S-corp owners! As others have mentioned, investing company cash in stocks/ETFs won't reduce your current tax liability since it's just converting one asset to another, not creating a deductible expense. However, there are some legitimate year-end tax strategies worth considering with that $75k: 1. **Accelerate business expenses**: Purchase equipment, software, or supplies you'll need in 2026 before year-end 2. **Maximize retirement contributions**: Solo 401k or SEP-IRA contributions can be substantial for S-corp owners 3. **Consider bonus depreciation**: Qualifying business assets may be eligible for immediate depreciation 4. **Prepay deductible expenses**: Insurance, rent, or professional services for early 2026 The key is making sure any purchases are ordinary and necessary business expenses, not just trying to park money somewhere. The IRS looks at the substance of transactions, so everything needs to have a legitimate business purpose. I'd strongly recommend consulting with a tax professional who can review your specific situation - the savings from proper year-end planning often far exceed the consultation cost.

Lifehack: If you file a paper return instead of e-filing, you're much less likely to get flagged for identity verification. I haven't been asked to verify in 5 years since I switched to paper filing. Yes it takes longer initially but no verification hassles.

Ugh, the whole identity verification process is such a nightmare! I went through this exact same thing last year. Filed early, got accepted immediately, then... nothing. Blank transcripts for weeks while I watched everyone else get their refunds. When I finally did the in-person verification, it took about 12 days for my transcript to update and then another 4 days for the actual refund to hit my account. The appointment itself was super quick - maybe 15 minutes - but the waiting afterward was brutal. One thing I learned: call your local office RIGHT when they open (usually 7 AM) to get an appointment. They release new slots each morning and they go fast. Also bring literally every piece of ID you own - I brought driver's license, passport, social security card, birth certificate, W-2s, and a utility bill. They didn't need everything but better safe than sorry! The verification system is completely broken though. How do they expect you to have a code from a letter that doesn't exist? 🤦‍♀️ Good luck with your appointment - hopefully you'll see movement soon!

Keep an eye on your transcript for code 971. That's the notice they sent you. Then look for code 570 which is a hold on your account. When you see code 571, that means the hold was released after verification. Then you'll see 846 which is your refund issued date! 🎉

I went through the exact same thing last year! Verified my ID online immediately after getting the letter, but it took almost 3 weeks to show up in their system. The key thing is to look for the specific codes on your transcript like others mentioned - code 971 for the notice, then 570 for the hold, and finally 571 when it's released. What really helped me was calling the dedicated ID verification line (800-830-5084) around 7 AM - that's when I had the best luck getting through. They were able to confirm my verification was in progress even when it wasn't showing up yet. The waiting is absolutely brutal, but once it processes, things move pretty quickly. Hang in there!

Has anyone tried just setting up a separate sole proprietorship for the equipment rental part? I'm wondering if I could invoice clients separately - one invoice from my service business and another from an equipment rental business with a different name and EIN.

I've been dealing with this exact issue for the past three years as a freelance DP who rents out my RED camera package. What I learned from my CPA is that the key isn't necessarily how your clients issue the 1099s, but how you can substantiate separate business activities. The IRS Publication 535 actually covers this - if your equipment rental is "incidental" to your services (meaning you primarily rent to clients you're also providing services to), then it's all considered one business subject to SE tax. However, if you can show that you have a separate equipment rental business (renting to other operators, production companies you don't work for, etc.), then you might qualify to report that portion on Schedule E. I started tracking every equipment rental separately in QuickBooks and made sure to actively market my gear rental independently. Now about 30% of my equipment income comes from rentals where I'm not providing services, which helps establish it as a separate business activity. The documentation is crucial if you get audited. Your current QuickBooks setup is a good start, but make sure you're also tracking which rentals include your services versus equipment-only rentals. That distinction could save you significant money in self-employment taxes down the road.

I was in a very similar situation - hadn't filed for 3 years and was absolutely terrified about what would happen. The good news is that if you had taxes withheld from your paychecks, you're in a much better position than you think! Here's what I learned when I finally dealt with it: The IRS isn't going to come after you criminally for this. They reserve criminal prosecution for people who are actively trying to defraud the government, not people who just procrastinated on filing. Since you had regular W-2 jobs with withholding, the IRS already knows about your income anyway. My advice: Start gathering your tax documents now (W-2s, 1099s, etc.) for all four years. If you're missing any, you can request transcripts directly from the IRS. Focus on getting the most recent 3 years filed first since those are the ones where you can still claim refunds if you're owed them. I ended up owing a small amount for one year but got refunds for the other two. The penalties weren't nearly as scary as I'd imagined, and the IRS was actually pretty reasonable to work with once I voluntarily came forward. The relief of finally having it handled was incredible - I wish I hadn't stressed about it for so long!

I understand how scary this feels, but take a deep breath - you're not going to jail over this! The fact that you had taxes withheld from your W-2 jobs actually works in your favor here because it shows you weren't trying to hide income from the IRS. Here's the reality: Criminal prosecution for tax issues is extremely rare and typically reserved for cases involving deliberate fraud, hiding large amounts of income, or filing false returns. Simply failing to file when you had proper withholding doesn't fall into that category. Since you mentioned you'd likely be owed refunds for at least 2 of those years, there are no penalties for filing late when you're due a refund. The only downside is that you can only claim refunds going back 3 years, so if any refund is from 2020, that one would be lost. For any years where you might owe money, yes there will be failure-to-file penalties (usually 5% per month up to 25%) plus interest, but these are manageable civil penalties, not criminal charges. The IRS also offers payment plans if you need them. My suggestion: gather all your tax documents for those 4 years and consider working with a tax professional who handles back taxes. They can help you file everything correctly and deal with any IRS correspondence. The sooner you get started, the sooner you'll have this weight off your shoulders. You've got this!