Are you and your fiancée filing taxes together? Because if so, I think there might be a different issue - you can't claim someone as a dependent if you're filing a joint return with them.

Just to add another perspective - I work as a tax preparer and see this confusion all the time! You're absolutely right that it's the net profit from Schedule C that counts toward the qualifying relative income test, not gross receipts. One thing to also keep in mind is that if you had any estimated tax payments or self-employment tax throughout the year, those don't reduce your "gross income" for dependency purposes - it's still the $2,700 net profit that counts. The self-employment tax is calculated separately and doesn't affect whether you meet the income test. Also, since you mentioned you're getting married next year, just be aware that once you're married, you'll need to decide whether to file jointly (which would be more beneficial in most cases) or separately if one of you wants to continue being claimed as a dependent by someone else. But that's a problem for next year's taxes!

has anyone looked into the tax treaty between Paraguay & the US? that could be super important for determining how ur income gets taxed. also check if Paraguay has a territorial tax system (only taxes income earned within the country) or worldwide. also whats ur citizenship? that matters a ton for how this all shakes out. if ur a US citizen u cant escape US tax filing no matter what u do lol

One thing I haven't seen mentioned yet is the potential impact of the UK's IR35 rules on your situation. Since you're working remotely for a UK recruitment company, they might still consider you a "disguised employee" rather than a genuine contractor, which could affect how your income is classified and taxed. The UK has been cracking down on contractors using offshore structures to avoid employment taxes, especially in the recruitment/staffing industry. Even if you set up a US LLC, HMRC might still view your relationship with the UK company as employment rather than B2B services. This could create complications because: 1) The UK company might be required to operate PAYE (Pay As You Earn) and deduct taxes 2) You might still be liable for UK National Insurance contributions 3) The income classification could affect how it's treated under any tax treaties Before you commit to the LLC structure, I'd strongly recommend getting clarity from the UK company about how they plan to classify and pay you. Some companies won't work with contractors through foreign entities specifically because of IR35 concerns. You might want to consult with a UK tax advisor who specializes in IR35 alongside your international tax planning, as this could significantly impact the effectiveness of any offshore structure you choose.

Did you efile both returns through the same tax software? I had an issue where I used TurboTax for current year but FreeTaxUSA for prior year and somehow the prior year one got stuck in limbo for like 3 months.

I went through something very similar last year and it was incredibly frustrating. One thing that helped me was requesting my tax transcripts directly from the IRS website (irs.gov) - you can get them online instantly if you can verify your identity. The transcript will show you if they actually received your 2023 return and what status it has in their system. Even if "Where's My Refund" shows nothing, the transcript often has more detailed information. Look for your "Account Transcript" for tax year 2023 - it'll show transaction codes that can tell you exactly what's happening with your return. Common codes like 150 (return filed) or 846 (refund issued) will give you a clearer picture. If the transcript shows they received it but it's just stuck in processing, at least you'll know it didn't disappear. And if it doesn't show up at all on the transcript, that could indicate the e-file wasn't actually accepted, even though you got a confirmation. Worth checking before spending more time on hold with the IRS!

Great question about S Corp distributions! Just to add another perspective - make sure you're also considering the timing of when you take the distribution. If you're planning to take it near year-end, you'll want to ensure your basis calculation accounts for the current year's income that will be allocated to you on your K-1. Also, since you mentioned this is for home renovations, keep in mind that taking the distribution doesn't create any additional tax deductions for the home improvement expenses - those would generally need to be personal expenses unless part of your home is used for business. One more thing to consider: if your S Corp has been profitable and you're planning future distributions, you might want to establish a regular distribution schedule to avoid large lump sums that could affect your personal tax bracket in any given year.

One additional consideration for your $50k distribution - make sure you understand how it might affect any business loans or credit lines you have. Some lenders have restrictions on distributions that could put you in violation of loan covenants, especially if the distribution significantly reduces the company's cash reserves. Also, since you mentioned the business has accumulated $300k in assets, you might want to consider keeping some cash in the business for future opportunities or unexpected expenses. IT consulting can be cyclical, and having that financial cushion has probably served you well over the past 5 years. Have you considered whether taking the full $50k at once is optimal, or if spreading it across multiple distributions might be better for both tax and business cash flow purposes? Sometimes a series of smaller distributions gives you more flexibility to adjust if business conditions change.

Former IRS employee here. The "TAX PERIOD BLOCKED FROM AUTOMATED LEVY PROGRAM" typically means your account was temporarily removed from automated collection actions. This can happen for various reasons - often when a taxpayer has made contact with the IRS, when the account is under review, or sometimes due to hardship indicators. The "INITIAL LEVY IMPOSED" is more concerning. However, before an actual levy is executed, you should receive several notices, with the final one being a "Final Notice of Intent to Levy." This notice gives you 30 days to request a Collection Due Process hearing. Given the timeline (these entries are from 2019 and 2021), and the fact you haven't had any bank accounts frozen, it's possible the levy was prepared but never executed, or it was attempted against an account that no longer existed. Your best option is to immediately call the IRS and request an installment agreement. For a $5,400 debt, $100/month is very reasonable and should be approved without much issue. You can also apply online through the IRS website for installment agreements under $50,000.

I'm going through something similar and this thread has been incredibly helpful! One thing I wanted to add - when you call the IRS to set up your payment plan, make sure you have all your information ready: your Social Security number, the exact amount you owe, and a realistic monthly payment amount you can stick to. Also, don't be surprised if the first representative you talk to can't help with everything. Sometimes you need to ask to speak with someone in Collections or request a supervisor if you're not getting the answers you need. The IRS employees are generally helpful once you get to the right person. For what it's worth, your situation sounds very manageable. You've been filing on time, you have a plan to put your refund toward the debt, and you're being proactive about setting up payments. That shows good faith effort which the IRS typically responds well to. The stress is totally understandable though - tax debt anxiety is real! But you're taking the right steps to resolve this.