Keep in mind that the "best" incorporation state isn't just about taxes. I incorporated in Delaware, and while I do pay the annual franchise tax, the legal protection has been invaluable. Had a major contract dispute with a client, and Delaware's Court of Chancery handled it efficiently. Also, if you ever plan to seek venture capital, many investors prefer Delaware C-Corps because of the predictable legal framework. Even if you save a little on taxes elsewhere, you might face higher costs if you incorporate elsewhere then need to convert to a Delaware entity later.

Great discussion here! As someone who went through this exact decision last year, I'd add that you should also consider the ongoing administrative burden of your choice. While Wyoming and Nevada are tax-friendly, Delaware has the most streamlined annual reporting process I've encountered. Their Division of Corporations website is actually user-friendly (shocking for a government site), and you can handle most filings online without needing to mail paperwork or deal with antiquated systems. Also, since you mentioned retaining earnings in the corporate structure - make sure to factor in potential accumulated earnings tax implications at the federal level if you're planning to hold onto significant cash without distributing it. This is a federal issue regardless of state, but some states have additional rules around unreasonable accumulation that could affect your strategy. Given your SaaS model and remote workforce, I'd seriously consider running the numbers on a Delaware C-Corp vs. the traditional tax haven states. The legal predictability and ease of administration might be worth the modest tax difference, especially as you scale.

Has anyone had experience with how long it actually takes for the IRS to process Form 8822? The instructions say 4-6 weeks, but when I did this last year it seemed to take forever and I still had mail going to my old address months later.

I went through this exact same situation when I moved from Texas to California last year. The key thing to remember is that the "most recent location" they're referring to in the instructions just means where you currently live now, not where you previously filed. Since you're now in Arizona, you'll use the Arizona mailing address for Form 8822. Like Molly mentioned, it goes to Kansas City, MO 64999-0023. The IRS has regionalized processing centers, so all Arizona residents send their address change forms to the same place regardless of where they previously lived or filed. One thing I learned the hard way - make sure you also update your address with any estimated tax payments if you make them quarterly. The IRS doesn't always connect these systems immediately, so you might get notices sent to your old address even after Form 8822 is processed. Also, since you mentioned e-filing for years, don't forget to update your address in whatever tax software you use for next year's filing. It'll save you from having to remember to manually enter your new address when tax season comes around.

Has anyone used QuickBooks Self-Employed for tracking both methods simultaneously? I heard there's a way to set it up to compare them at tax time.

As someone who's been through this exact scenario with my photography business, I completely understand your frustration! The "locked in" rule for actual expenses is one of those tax traps that catches a lot of small business owners off guard. Given your high mileage (15,782 business miles), the standard mileage deduction would give you about $10,337 this year alone (at 65.5 cents per mile). With actual expenses, you're probably looking at significantly less unless you have unusually high vehicle costs. Here's my take: if you're planning to keep this car for several more years and maintain similar mileage patterns, paying the $2,750 now is likely worth it. You'll probably recoup that cost within the first year of using standard mileage, and then continue saving thousands annually. Before making the final decision, I'd recommend calculating your total actual expenses for this year (including depreciation, gas, insurance, repairs, registration, etc.) and comparing that to what standard mileage would give you. If the gap is as wide as I suspect, the math strongly favors taking the hit now. Also consider consulting with a tax professional who specializes in small business returns - they can run the numbers for your specific situation and help you avoid any pitfalls with the amendment process.

Pro tip - sign up for a tax transcript account on irs.gov. Usually any notices will show up there before you get them in the mail. Helps ease the anxiety of waiting!

Don't panic yet! This time of year it could be a simple CP2000 notice if there was a minor discrepancy between what you reported and what was reported to them (like a 1099 that didn't match perfectly). Since you already got your refund, it's likely just a routine notice that needs a response. The fact that it's thin is a good sign - audit packets are usually thick. Keep us posted on what it turns out to be!

Something else to consider - you might be eligible for a whistleblower reward if the IRS collects taxes based on your information. If the amount exceeds $2 million, you could get 15-30% of what they collect. Even for smaller amounts, you might still get something. Just use Form 211 instead of or in addition to Form 3949-A.

I reported my previous employer for almost the exact same thing in 2023. They were calling everyone "contractors" even though we worked regular 9-5 schedules in their building using their equipment. Make sure you document EVERYTHING before you leave - copies of schedules, emails about your duties, anything showing they controlled how/when you worked.