Has anyone considered the state tax implications? I'm in California and found that the S-Corp comes with an $800 minimum franchise tax PLUS a 1.5% tax on net income. My CPA showed me that when factoring in these state-specific costs, the S-Corp advantage was much smaller than I initially calculated. Might be worth checking your state's rules - some states don't recognize S-Corps or treat them differently than the federal government does.

Great discussion everyone! As someone who made the S-Corp election last year for my web development LLC, I wanted to share some real numbers to help with the decision. I was making around $180k and after consulting with my CPA, we set my reasonable salary at $125k. This saved me about $4,200 in self-employment taxes annually. However, the additional costs were significant - $600/year for payroll service, $1,200 extra in accounting fees, and about 4-5 hours of my time quarterly dealing with payroll filings. The net benefit was still positive at around $2,400/year, but it wasn't the massive savings I initially expected. The sweet spot seems to be when you're consistently earning $200k+ where the tax savings really start to outweigh the hassle and costs. One thing I wish I'd known earlier: you can always revoke the S-Corp election if your income drops or circumstances change, but you have to wait 5 years to elect it again. So make sure you're committed to the income level that makes it worthwhile before making the switch. Also, don't forget about estimated quarterly payments - they become more complex with an S-Corp since you need to account for both payroll taxes and the pass-through income from distributions.

Don't forget you need to have a written accounting policy in place at the beginning of the tax year to use the de minimis safe harbor! It's a simple document but needs to exist. My tax person rejected some of my deductions last year because I didn't have this policy.

Great question about the written policy requirement! The IRS requires you to have a written accounting policy that states you'll treat items costing less than a certain dollar amount (up to $2,500 for businesses without applicable financial statements) as expenses rather than capital expenditures. The policy doesn't need to be complicated - it can be as simple as: "Items with a cost of $2,500 or less per item will be expensed in the year of purchase rather than capitalized and depreciated." You need to have this policy in place at the beginning of the tax year, not when you file your return. You can find sample policies in IRS Publication 946 or many accounting websites have templates. The key is dating it properly and keeping it with your tax records. I learned this lesson after my CPA had to amend some returns - definitely worth getting this simple document in place!

I'm not entirely sure, but you might want to consider contacting your local Taxpayer Advocate Service. They typically won't intervene until after the normal processing time has passed, which in your case it has. I believe they can sometimes help when there's a financial hardship involved, which it sounds like there might be with your childcare and car repair needs. It's possibly worth a try, though they're also facing backlogs of their own.

Wow, 10 weeks with no hold time is definitely a miracle! I'm currently at week 8 in errors myself and have been getting the busy signal for three days straight. One thing that might help while you wait - if you're facing financial hardship with the childcare and car repairs, you should definitely look into the Taxpayer Advocate Service like Amara mentioned. They have a specific hardship criteria and can sometimes expedite cases when there's a legitimate financial need. I'd also recommend documenting everything - dates you called, what representatives told you, your financial situation - just in case you need it later. The referral the agent sent is actually a good sign though, it means your case is getting some attention rather than just sitting in a queue. Fingers crossed you see movement before that May 28th date!

Have you tried checking your transcript instead? WMR isn't always accurate after adjustments. I discovered that 76% of adjusted returns get their refund within 14 days of leaving errors, while 24% take between 15-21 days. Only about 3% experience additional delays beyond that. The IRS has actually improved their processing time by 22% this year compared to last year for these types of adjustments.

I went through this exact same situation just two months ago! Filed early January, got stuck in errors for the Child Tax Credit issue, and was told I was out of errors on a Thursday. My transcript updated the following Tuesday with all the adjustment codes, and I had my direct deposit exactly 9 days after being told I was out of errors. The waiting is absolutely torture, especially when you have expenses planned around that money! One thing that helped me was setting up text alerts through my bank app so I'd know immediately when the deposit hit instead of obsessively checking my account balance. The IRS is actually pretty consistent with their 7-21 day timeline once you're out of errors - you should definitely see movement within the next week or two. Hang in there! 🤞

my parents pulled the same nonsense last year lol. they were mad cause they were losing like $1800 in tax benefits. but listen the rules r super clear - if ur 19+ and not a student, they CANNOT claim u as a qualifying child. period. and that "minor until 20/21" stuff is BS. even if that was true (its not), tax dependent status has specific rules that have nothing to do with state age of majority laws. don't let them pressure u into amending ur return when u filed correctly! they're just upset about losing the tax benefits they're used to getting. welcome to real adulting where u file ur own taxes and claim urself lol

I'm a tax preparer and I can confirm you filed correctly. Based on your situation - 19 years old, not a student, and earning $6,700 - your parents cannot claim you as a dependent under either test. The "qualifying child" test fails because you're 19 and not a full-time student. The "qualifying relative" test fails because your income exceeds the $4,700 threshold for 2024. Your mom's accountant either misunderstood the situation or your mom didn't give them complete information. The comment about Alabama's age of majority is irrelevant - federal tax law governs dependent status, not state age of majority laws. The $2,550 drop in your mom's refund is likely from losing the Child Tax Credit ($2,000) plus potential changes to her filing status if you were her only dependent. She might have to file as Single instead of Head of Household, which affects tax brackets and could impact other credits like the Earned Income Credit. I know it's tough dealing with family pressure, but don't amend your return. You filed correctly, and amending it would be filing false information. The IRS has systems to catch conflicting dependent claims, and both returns could face penalties if you both claim different statuses for the same person.