Something no one has mentioned yet is that this issue varies HUGELY by industry. I work in healthcare IT consulting and have found that hospitals and healthcare systems are extremely rigid about only using staffing agencies because of compliance requirements. Meanwhile, my friend who does similar work for retail companies has much better luck contracting directly through his S-corp. What industry are you in, OP? That might be a factor in how difficult this battle is going to be.

One thing I learned after 15 years as an incorporated contractor - this whole landscape changes every few years. Back in 2018-2020 companies were much more open to direct contracts with S-corps. Then AB5 happened in California, and similar legislation started popping up elsewhere, and suddenly everyone got super conservative. So just because it's difficult now doesn't mean it will stay that way. Companies tend to overreact initially and then gradually develop more nuanced policies. I suspect by 2026-2027 we'll see more companies creating specific carve-outs for incorporated contractors vs. sole proprietors.

I'm curious about this whole issue myself cuz I just started a commission job too. Anyone here know if tax withholding for commissions is different between states? Or is it all federal rules? Like if I move from NY to Texas mid-year, would it affect how my commission is taxed?

One thing I'd add as someone who went through this exact situation - keep detailed records of your paystubs throughout the year! I wish I had done this better my first year in commission sales. When tax time comes, having all your pay stubs organized makes it much easier to verify that your W-2 is accurate and that all the withholding amounts are correct. Sometimes payroll systems can have glitches, especially with variable commission structures. Also, consider setting aside a small percentage of those big commission checks in a separate savings account. Even though you'll likely get a nice refund, it's good to have a buffer in case there are any surprises or if you want to make estimated payments next year to avoid the overwithholding cycle altogether. The peace of mind of knowing you have some tax money set aside is worth it, especially when your income swings are as dramatic as yours. Congrats on the $107k YTD - sounds like you're killing it in sales!

Don't forget about the "Deluxe" trap that both companies use. The basic version advertised at a low price usually won't cover homeowner deductions or self-employment income. You'll need at least the Deluxe version for mortgage interest and the Self-Employed version for your freelance work. If you really want to save money, the IRS has a Free File program where you can use name-brand tax software for free if your AGI is under about $73k. Worth checking that out before paying for either one.

Based on your situation with W-2 income, freelance work, and new homeownership, I'd lean toward H&R Block for 2025. Here's why: 1. **Cost**: H&R Block's Deluxe version (which you'll need for mortgage interest) is typically $20-30 cheaper than TurboTax's equivalent. 2. **Homeowner focus**: Their mortgage interest and property tax sections are really well-designed for first-time homeowners. They walk you through points deductions, PMI, and other homeowner benefits you might not know about. 3. **Freelance handling**: For $5,800 in freelance income, both platforms handle Schedule C fine, but H&R Block won't pressure you to upgrade to their most expensive tier like TurboTax often does. Just be aware that you'll definitely need their Deluxe version (not Basic) to handle both the mortgage interest and self-employment income. Don't let them upsell you beyond Deluxe unless you have more complex investments. One tip: Both companies run early-bird discounts in January, so if you can wait a few weeks into tax season, you might save another 15-20% off the regular price.

To all those having trouble reaching a human at IRS. I just ran across this video that gave me a shortcut to reach a human. Hope it helps! https://youtu.be/_kiP6q8DX5c

Hey Montana! I totally get your confusion - transcript codes can be really overwhelming. The multiple 290 codes you're seeing are actually pretty normal and usually just indicate routine adjustments the IRS makes while processing your return. Since WMR switched from PATH to regular processing, that's actually a good sign that things are moving forward. The lack of a tax code right now just means they're still working through verification. I wouldn't stress too much about the audit rumors - if there were serious issues, you'd typically get official correspondence from the IRS directly. Keep checking WMR every few days, and if you don't see movement in another week or two, then maybe consider calling the IRS for clarification.

Does anyone know if using TurboTax or H&R Block can handle this kind of situation properly? I'm in a similar boat with Illinois and Wisconsin withholding.

I went through almost the exact same situation when I moved from California to Texas a couple years ago! The good news is you're definitely going to get that money back - it's just a matter of filing correctly. Since you mentioned you moved in April, you'll need to file as a part-year resident for both states. For Pennsylvania, you'll only report income earned from January through March (or whenever exactly you moved). For Ohio, you'll report income from your move date through December 31st. One thing that really helped me was keeping a detailed record of my exact move date with supporting documentation like utility connection dates, lease agreements, and even receipts from the moving company. Both states may ask for proof of when you established residency. Also, don't stress too much about the HR mistake - this happens more often than you'd think, especially with larger companies that have employees across multiple states. The important thing is getting it fixed going forward and filing your returns correctly to get that overpayment back. You should definitely get a nice refund from Pennsylvania since you weren't actually liable for those taxes after moving!