How did you handle pricing when outsourcing? Did you find you could charge the same as when you did the work yourself? And did you tell clients upfront that someone else would be doing the actual preparation?

I kept my pricing mostly the same because even though I was paying others to do the preparation, I was still spending significant time on review and quality control. The main benefit was being able to handle more volume, not necessarily making more per return. I was completely transparent with clients. I explained that I personally reviewed every return and was still their main point of contact, but that I had trained preparers handling the data entry and initial calculations. Most clients were fine with this arrangement as long as they knew I was still overseeing everything and they could reach me with questions.

Do you have any specific recommendations for secure data handling if someone does want to outsource? Are there certain countries that would be better/worse from a legal standpoint?

That's genius about the separate bank account! Do you also use a different credit card for delivery-related expenses? I currently just use my personal card for everything and I can see how that would get messy come tax time.

Yes, I absolutely use a separate credit card too! I have a dedicated "delivery driver" credit card that I only use for business expenses. This makes it super easy at tax time because I can just download the annual statement and everything is in one place. It also helps with proving business intent if you ever get audited. The IRS loves to see clear separation between personal and business expenses, especially for gig work. Just make sure you're only putting legitimate business expenses on that card.

Is there an easy way to separate business vs personal miles if I sometimes do personal errands between deliveries? Like if I drop off a order then swing by the grocery store before going back online?

I haven't considered electing to be treated as a corporation - could you explain a bit more about when that might be advantageous for investment activities? Would the corporate tax rates be better than the withholding rates in some cases? And would I still need to file Form 5472 if I made that election?

Making an election to be treated as a corporation (Form 8832) can sometimes be advantageous because U.S. corporate tax rates might be lower than the withholding rates applied to foreign persons, especially for certain investment types. For example, while dividends are typically subject to 30% withholding (or lower with tax treaties), the corporate income tax rate is 21%. Yes, you would still need to file Form 5472 if you made the election, as it applies to 25% foreign-owned U.S. corporations. However, instead of filing a pro-forma 1120, you'd file a regular Form 1120 as an actual tax return. Another benefit is that a corporation can potentially claim deductions against income that might not be available to a foreign person receiving passive income. The downside is increased compliance requirements and potential for double taxation if you eventually distribute earnings to yourself. The optimal structure really depends on your specific situation, investment amounts, and how your country's tax treaty interacts with U.S. tax law.

I've had an account with Interactive Brokers for my foreign-owned Delaware LLC for about 3 years now. They're definitely more accommodating to international structures than many other brokerages. The documentation requirements were still extensive, but their system is set up to handle foreign ownership situations. They also have good systems for handling tax withholding based on tax treaty status.

What's a good ratio of salary to distributions that won't trigger IRS concerns? I've heard different things from different sources.

There's no fixed percentage that's universally "safe" as the IRS looks at what's reasonable for your industry, experience, and business circumstances. A common approach is researching what comparable positions in your industry would pay and documenting that research. For many service businesses, I've seen recommendations ranging from 50-70% of profits as salary being reasonable, but it varies widely. Healthcare professionals often need higher salary percentages while capital-intensive businesses might justify lower percentages. The key is having solid documentation for whatever number you choose.

This! So many people don't understand marginal tax rates and make decisions based on completely wrong assumptions. OP needs to look at effective tax rate across all income, not just the highest bracket they hit.

Thanks for mentioning this! I didn't even think about the asset list. Do you know if there's a standard format for this? And for the customer concentration report, did you just create a spreadsheet or is there a more official way to present that information?

For the asset list, I just created a simple spreadsheet with columns for: description, date acquired, original purchase price, current estimated value, and condition (excellent, good, fair, etc.). Nothing fancy, but buyers appreciated the organization. The customer concentration report was also just a spreadsheet showing my top 10 customers, what percentage of revenue each represented, how long they'd been customers, and brief notes about the relationship. My broker actually said these simple documents made a huge difference in buyer confidence because they showed I was organized and transparent.

Is there an easy way to calculate this? I've owned my S-corp for 12 years and honestly have no idea what my current basis is.