My accountant told me that Schedule C's with home office deductions get flagged more often. Anyone know if thats true?? I started working from home and want to claim the space but worried it'll trigger something.

As someone who's been freelancing for about 3 years now, I totally get the paranoia! What really helped me was understanding that the IRS is actually looking for patterns that don't make business sense, not just high expenses. For your situation with $7,500 in income, claiming legitimate software subscriptions and equipment is totally normal and expected. The key things that helped me feel more confident: 1. Keep detailed records of HOW you use business expenses (like what percentage of internet is actually for work) 2. Don't claim personal expenses as business ones (even if it's tempting) 3. Be reasonable with your deductions - if you're claiming more in expenses than you made in income, that's when eyebrows get raised I've claimed everything from Adobe subscriptions to a new monitor to client meeting expenses, and never had an issue. The IRS understands that freelancers have legitimate business costs, especially in creative fields where software and equipment are essential. Your income level actually puts you in a lower-risk category for audits. Just keep doing what you're doing - claiming legitimate expenses with proper documentation!

Has anyone here actually formed an S-Corp after being sole prop? I'm considering it for 2023 after getting hit with massive SE taxes like OP. Is it worth the hassle and extra costs?

I've been in a similar situation and it's incredibly frustrating! Unfortunately, as others have confirmed, retroactive S-Corp elections for 2022 are essentially impossible at this point. The deadlines are very strict. However, don't give up on reducing your SE tax burden! A few additional strategies to consider: 1. **Quarterly estimated payments for 2025** - Start making them now to avoid underpayment penalties and spread the cash flow impact 2. **Maximize retirement contributions** - If you haven't already, consider a SEP-IRA contribution (up to 25% of net SE income or $66,000 for 2023, whichever is less). This reduces your taxable income. 3. **Payment plan with IRS** - If the tax bill is overwhelming, the IRS offers installment agreements. You'll pay interest, but it can make the burden manageable. 4. **Professional review** - Given the size of your potential tax bill, it might be worth having a CPA or EA review your return one more time before filing to ensure you're not missing any legitimate deductions. For 2023 and beyond, definitely explore S-Corp election if your profits justify it. The SE tax savings can be substantial once you account for the additional compliance costs. Hang in there - this too shall pass!

idk but my cousin had the same issue last year and it turned out to be a mistake on their end. keep pushing!

Have you tried calling the IRS directly at 1-800-829-1040? They can usually tell you if there are any holds or offsets on your account that might not show up on the Treasury offset line. Also, if you have an online IRS account, you can check your account balance there - sometimes it shows pending offsets before they actually process. Keep documentation of all your calls and reference numbers in case you need to dispute something later.

I still don't understand how our tax system works. If I'm in the 12% bracket based on my annual salary, why does a bigger check suddenly get taxed at 22%? That's nearly double! The system seems designed to confuse us. 😤

I totally get your frustration! I went through the same thing when I got my first big bonus. The 22% withholding on supplemental wages feels like a punch to the gut when you're expecting your regular withholding rate. What helped me was thinking of it this way: the payroll system doesn't know your full financial picture - it just sees a big paycheck and assumes you might be in a higher tax bracket. The 22% rate is like a "safety net" to make sure the IRS gets enough upfront, even if it's too much. You're absolutely right that it's annoying to give the government an interest-free loan, but at least you know you'll get it back at tax time if you're actually in the 12% bracket. Some people actually prefer the forced savings aspect, but I'm like you - I'd rather have my money now!

I've been filing taxes for over 15 years, and I've learned that while exceptions exist, it's best to assume the system works as designed. In my experience, about 95% of refunds follow the same pattern: transcript updates with an 846 code and DDD, then money arrives on that exact date (or 1-2 days early for certain banks). Last year I thought I might get paid early because my transcript hadn't updated but WMR showed approved, but it still followed the normal timeline. Just trying to set realistic expectations - the waiting game is tough but almost everyone goes through it.

I can share my experience from this filing season - I actually did receive my refund 2 days before the DDD appeared on my transcript! Filed in early February, transcript showed "still processing" for weeks, then suddenly got the direct deposit. The DDD (846 code) didn't show up until the day after I received the money. My bank (Chase) processed it on a Friday even though the official date was the following Monday. So yes, it can happen, though it seems pretty rare. I think it depends on your bank's processing schedule and how the IRS batches payments. Don't count on it happening, but it's not impossible. The transcript system definitely lags behind the actual payment processing sometimes.