Have you considered that your Form 2553 might have been filed late originally? There's a specific rule that Form 2553 must be filed either within 2 months and 15 days of the beginning of the tax year the election is to take effect, OR at any time during the tax year preceding the tax year it is to take effect. If you missed this deadline, you might need to request relief under Revenue Procedure 2013-30, which allows for late S corporation elections. This involves attaching a statement explaining why you had "reasonable cause" for filing late.

I'm dealing with a very similar situation right now with my 2022 return. The IRS initially accepted my 1120-S but then sent a rejection letter months later claiming they had no record of my S-corp election. What's frustrating is that I filed Form 2553 well within the deadline and have the certified mail receipt. One thing that helped me understand what happened was requesting my Entity Control Document (ECD) from the IRS Business Master File. This shows exactly how they have your business classified in their internal system versus what your actual filings indicate. You can request this by calling the Business & Specialty Tax Line or including it in your written correspondence. In my case, the ECD showed that someone had manually entered my business as a "disregarded entity" (single-member LLC) even though my formation documents clearly established a corporation. This was purely a data entry error on their end. I'm now working with a tax attorney to file a formal protest of the rejection along with all supporting documentation. The key seems to be proving that any classification error originated from IRS processing mistakes rather than incorrect filings on your part. Since your business is dissolved, you might want to act quickly as there are time limits on how long you can dispute these issues. Have you tried requesting your complete business file from the IRS to see exactly what they have on record?

Navy Fed member here. I've tracked my deposits over the last three years. Here's what happens: 1) IRS assigns your DDD on transcript with code 846. 2) IRS initiates ACH transfer 1-2 days before DDD. 3) Navy Fed posts it as soon as they receive it, not on the official date. 4) Most people see it 1-2 days early, but not always. Drives me crazy when people say they always get it early because it's not guaranteed!

Navy Fed member for 3 years here! Can confirm they do release early sometimes, but like @Anastasia Sokolov said, it's not guaranteed. What I've noticed is it seems to depend on what day of the week your DDD falls on. When my DDD was on a Friday last year, I got it Wednesday. But when it was on a Tuesday, I only got it one day early on Monday. The ACH system doesn't run on weekends, so that might explain the pattern. Also worth noting - make sure your account info is exactly right because any mismatch can delay things significantly!

The form you need is Form 4797 Part III for this situation. You'll report the business percentage of the car, the sale price, and your adjusted basis. The key is calculating that adjusted basis correctly by subtracting all the depreciation you took (or were deemed to have taken with standard mileage). The IRS Publication 463 has charts showing the depreciation portion of the standard mileage rate for each year. For example, it was 26 cents per mile in 2022, 25 cents in 2021, etc. Multiply your business miles each year by that year's rate to get your total depreciation.

This is a perfect example of why keeping detailed records is so important for rideshare drivers! What you're experiencing is completely normal but definitely confusing the first time you encounter it. The key insight that others have mentioned is that the standard mileage rate isn't just covering gas and maintenance - it includes depreciation too. So every year you claimed those business miles, the IRS was essentially saying "okay, we'll let you deduct this amount, but we're also going to reduce what you 'own' in this car by the depreciation portion." One tip for the future: if you do rideshare driving again, consider keeping a simple spreadsheet tracking your total business miles each year and the depreciation rates. That way when you eventually sell your next vehicle, you won't be surprised by the tax implications. You can find the historical depreciation rates in IRS Publication 463. Also, remember this "gain" will likely be taxed as ordinary income (depreciation recapture) rather than capital gains, so factor that into your tax planning!

One thing nobody's mentioned - be careful about how this affects your estimated tax payments! If you were paying quarterly estimated taxes as a sole prop and then switched to S-Corp mid-year, the calculation gets tricky. When I converted, I underpaid my estimated taxes and got hit with a penalty. Make sure your accountant helps you figure out the right amounts for each business structure during the respective periods.

You're absolutely right to be concerned about that second accountant's advice. Filing S-Corp returns for periods when you weren't actually operating as an S-Corp is risky and could cause serious issues down the road. The incorporation date error needs to be corrected properly. Here's what I'd recommend: 1. File Form 8822-B to correct the business information with the IRS. Include a detailed letter explaining the error and attach documentation showing your actual incorporation date. 2. For 2024 taxes, file as a sole proprietor (Schedule C) for January through June, then file a short-year S-Corp return (Form 1120-S) for July through December when you were actually operating as an S-Corp. 3. Don't worry about "drawing attention" to yourself - correcting errors is normal and expected. The IRS processes these corrections regularly. The key issue is that S-Corp status comes with specific requirements like taking reasonable salary, maintaining separate accounts, and following corporate formalities. If you claim S-Corp status retroactively for periods when you weren't meeting these requirements, you could lose your liability protection and face problems in an audit. Better to take a few extra steps now to fix this properly than to deal with much bigger headaches later. Find a new accountant who understands the importance of getting this right!

One important thing to consider that I haven't seen mentioned - as a W-2 employee, you get certain legal protections that 1099 contractors don't have. This includes workers' compensation if you're injured on the job, unemployment benefits if they let you go, and protection under labor laws. As a 1099, you're essentially running your own business, which means you need to handle your own liability insurance and you won't qualify for unemployment if the relationship ends. This is a big consideration beyond just the tax implications.

Great question! I went through this exact decision last year when I started doing real estate work. Here's what I learned: The math really depends on your total business expenses. As a 1099, yes you'll pay the full 15.3% self-employment tax, but you can deduct SO much more - mileage (huge for real estate!), home office, phone, internet, marketing materials, continuing education, even meals with clients. One thing that helped me decide: I calculated my expected annual income and business expenses, then ran the numbers both ways. For me, the deductions saved more than the extra 7.65% in self-employment tax cost me. But also consider the non-tax factors - as others mentioned, you lose unemployment protection and workers comp as a 1099. However, you gain flexibility in how you work and when you work, which is valuable in real estate where you might need to show properties at odd hours. My advice: start tracking ALL your potential business expenses now (even before you decide) for a month or two. That will give you real numbers to work with instead of guessing. If your monthly business expenses are significant, 1099 is probably better. If they're minimal, W-2 might be the safer choice. Either way, definitely consult with a tax professional who understands real estate before making the switch!