I tried both TurboTax and Jackson Hewitt - denied by TurboTax first, then got offered $350 from Jackson Hewitt (on a $3800 refund). Not great but better than nothing. I think different companies use different banks so it might be worth trying.

Thanks for sharing your experience! I might try Jackson Hewitt then. $350 isn't much compared to a full refund but it would at least help with a car repair I've been putting off. Did you have to start your whole tax return over with them or was there a way to transfer information?

That's easy to say when you're not living paycheck to paycheck. Some of us have bills due now and can't just "wait 2-3 weeks." Last year's advance helped me avoid an eviction while waiting for my full refund. I get your point about hidden fees, but for people in tough situations, these advances can be the difference between keeping the lights on or not.

Do you still have to pay self-employment tax on the rental income since you're renting to your own business? I've heard conflicting things about this.

I had no idea about UBIT affecting retirement accounts. Thanks everyone for all this information - you've convinced me to abandon this idea. I'm going to look into either buying the property personally or using an SBA loan through my LLC instead. Definitely don't want to mess with my retirement funds and trigger all these complicated tax issues!

That's super helpful, thanks! My accountant mentioned something about "reasonable compensation" requirements for S Corps but wasn't clear on how that interacts with the K-1 income flowing in. Does the K-1 income from the LLC affect how much I need to pay myself as reasonable salary from the S Corp?

The K-1 income does indirectly affect reasonable compensation considerations. The IRS expects S Corp owner-employees to take a "reasonable salary" before taking distributions, which means your salary should be comparable to what would be paid for similar services in your industry. When your S Corp receives additional income (like K-1 income from an LLC), it increases the total profit available in the S Corp. If your responsibilities or time commitment increase due to this additional business activity, it might justify a higher reasonable salary. The key test is always what's reasonable for the actual services you're providing to the S Corp. Remember that paying yourself too little in salary and taking large distributions instead can be a red flag for the IRS, as it can look like an attempt to avoid payroll taxes.

I did this last year. The paperwork is a pain, honestly. You need to formally admit the S Corp as a member of the LLC, which means amending the LLC operating agreement. Then there's the whole issue of how to value the membership interest if the S Corp is purchasing it rather than being granted it. We had to get a business valuation done which cost about $3,500.

Thank you for this! That's actually really good to know. So I did the right thing by filing even though I can't pay right now. Do you know if there's any way to get the penalties waived? I read something about "first time abatement" somewhere.

Yes, there is a First Time Penalty Abatement that the IRS offers if you haven't had any penalties in the past 3 tax years. You usually need to call and request it, and they don't automatically tell you about it. It won't waive the interest, but it can remove the failure-to-pay penalties. Definitely worth asking for if this is your first time owing or being late with payment. You typically need to have paid the tax or set up a payment plan before requesting the abatement.

I did this last year. The processing fee was around 2% of the tax amount. My credit card had 22% APR, while the IRS interest rate was like 6-7%. So unless you can pay off that credit card REALLY fast or have a 0% intro offer, the IRS plan is usually cheaper.

Totally valid point! Real IRS checks have watermarks and security features. The paper should have a slight blue tint and there's usually a watermark visible when held up to light. Also, if you're not expecting a check or the amount seems off, it's another red flag. Scammers count on people being excited about surprise money and not questioning it too carefully.