As an S-Corp owner for 6 years I'll give u the real talk no bs. S-Corp is worth it IF: - ur making at least 80-100k profit - can handle extra paperwork/costs - willing to run payroll (even if just for urself) - dont need all the money each month (gotta leave some in biz) LLC is better if: - simpler operations/lower income - need all the money each month - hate paperwork - just starting out the mistake I see peeps make is jumping to s-corp too early when profits dont justify the hassle. start LLC then convert later!!

Great question, Luca! I went through this exact decision process about 2 years ago as a freelance graphic designer working similar contract arrangements. One thing I'd add to the excellent advice already given - definitely talk to your staffing agency (TechTalent) about how they handle contractor vs. business entity payments. Some agencies prefer working with individual contractors for simplicity, while others are totally fine invoicing your LLC or S-Corp. A few agencies I've worked with actually preferred the business entity route because it made their 1099 reporting cleaner. Also, regarding timing - if you do decide to form an entity before Dec 31st, make sure you understand the prorated tax implications. You'll need to start treating income differently from the formation date forward, which can complicate your 2024 filing if you're switching mid-year. One practical tip: Start tracking ALL your potential business expenses NOW (home office, equipment, software, internet, phone, professional development, etc.) regardless of which entity you choose. I was surprised how much I was spending on legitimate business costs that I wasn't even thinking about deducting. Having 2-3 months of detailed expense tracking will help you make a more informed decision about whether the tax benefits justify the entity costs. The $80-100k profit threshold mentioned by Jamal is pretty spot-on in my experience. Below that, the administrative burden often isn't worth the SE tax savings.

What mileage tracking app do you guys recommend? I'm terrible at remembering to log my trips.

Just want to add another perspective here - I'm a tax preparer and see this situation all the time. The key thing that trips people up is understanding what constitutes a "principal place of business." The IRS looks at two main factors: (1) where you spend the most time conducting business activities, and (2) the relative importance of the activities performed at each location. Even if you spend more time at client sites doing the actual service work, if your home office is where you do the administrative and management activities that are essential to your business (scheduling, bookkeeping, client communications), that can still qualify as your principal place of business. StarSailor, based on what you've described - doing all your scheduling, client calls, and paperwork from a dedicated home office - you should be good to go for the mileage deduction. Just make sure you're consistent about using that spare bedroom exclusively for business and keep good records of both your mileage and your home office use. One more tip: consider also claiming the home office deduction itself! If you're using that spare bedroom exclusively for business, you can deduct either actual expenses (percentage of utilities, rent/mortgage interest, etc.) or use the simplified method ($5 per square foot up to 300 sq ft). Many people miss this additional deduction.

Friendly reminder that if you owe taxes for other years, the IRS will automatically apply any refund from 2020 to those outstanding balances. So if you're expecting a refund but have tax debt from other years, don't count on seeing that money.

Just want to echo what others have said about the May 17, 2024 deadline - you really need to act fast! Since you can't e-file 2020 returns anymore, make sure you're using the actual 2020 tax forms (not 2024 forms) which you can download from the IRS website under "Prior Year Products." One thing I haven't seen mentioned yet - if you had health insurance through the marketplace in 2020, make sure you have your 1095-A form to reconcile any advance premium tax credits. Missing this could delay your refund processing significantly. Also, double-check that you're mailing to the correct IRS processing center for your state. The address for paper returns is different from where you'd normally send correspondence, and using the wrong address could cause delays that might push you past the deadline. Good luck getting your refund!

I'm confused about something - if you're a foreign investor, shouldn't you be filling out a W-8BEN rather than a W-9? W-9 is generally for US persons while W-8BEN is for foreign persons to claim treaty benefits and establish foreign status.

This is a really important distinction that everyone should pay attention to! As a foreign investor, you should definitely be using Form W-8BEN, not W-9. The W-9 is specifically for U.S. persons (citizens, residents, etc.), while W-8BEN is designed for foreign individuals to establish their foreign status and claim any applicable tax treaty benefits. Using the wrong form is probably what triggered the backup withholding in the first place. When you submit a W-9 as a foreign person, the broker's system sees a mismatch between your foreign status and the domestic tax form, which automatically flags your account for withholding. I'd recommend calling your broker to clarify which form they actually need from you. If you're truly a foreign investor, switching to the correct W-8BEN form might not only stop the future withholding but could also reduce your overall tax burden if there's a tax treaty between your country and the U.S. This could save you a lot of headache (and money) going forward!

I've been through this exact situation! The 570 code is frustrating but very common, especially when you haven't filed in a while. Based on your transcript, you're looking at a $6,827 refund once the hold is lifted. Since you've been locked out for 5 years, the IRS is probably doing identity verification or reviewing your EIC claim (that $5,213 is substantial). Here's what helped me get through it faster: 1. Check your mail religiously - they may send verification requests 2. Keep refreshing your transcript every Friday for updates (look for 971 or 846 codes) 3. Double-check that your current address is on file with them The waiting game sucks, but most 570 holds resolve within 4-12 weeks. If you're facing financial hardship from the delay, definitely call the Taxpayer Advocate Service - they can sometimes push things along if you qualify. Hang in there! Once that hold lifts, your refund should process pretty quickly.

I went through something very similar last year! The 570 code held up my refund for about 6 weeks. In my case, they were reviewing my Earned Income Credit because I had a gap in filing (similar to your 5-year situation). What really helped me was being proactive rather than just waiting. I called every few days using different times of day - early morning (8 AM) seemed to have shorter wait times. When I finally got through, the agent was able to tell me exactly what they needed and walked me through the verification process right on the phone. Your refund amount looks substantial at $6,827, so it's definitely worth the effort to follow up. Don't just wait for mail - sometimes those notices get lost or delayed. The IRS agent I spoke with said they see this situation a lot with people who haven't filed recently, and it usually resolves once they can verify your identity and income. Keep checking that transcript every Friday for updates, and don't hesitate to be persistent with calling. The squeaky wheel really does get the grease with the IRS!