Does anyone have experience with state taxes when it comes to S-Corps vs LLCs? My accountant mentioned something about some states imposing franchise taxes or fees on S-Corps that don't apply to LLCs reporting on Schedule C.

The key factor everyone seems to be missing is timing and cash flow management. Yes, S-Corps can provide SE tax savings, but there's a hidden cost that hits many small businesses hard: you MUST run payroll every pay period, which means regular cash outflows for payroll taxes, even during slow months. With Schedule C, you pay estimated taxes quarterly based on your actual earnings. If you have a bad quarter, you can adjust. With S-Corp payroll, you're committed to that salary regardless of business performance. I've seen too many seasonal businesses struggle with this requirement. Also, the "reasonable salary" standard isn't just about avoiding audits - it affects your Social Security benefits calculation. If you artificially suppress your salary to minimize payroll taxes, you might be shortchanging your future retirement benefits. For younger entrepreneurs, this could mean giving up decades of higher Social Security payments to save a few thousand in current taxes. The math works great on paper, but real-world cash flow and long-term planning often tell a different story.

Another thing to consider is that even if you don't owe taxes, there might be credits you're eligible for that you can only get by filing. Like the Earned Income Tax Credit or education credits if you were in school. These can be worth thousands of dollars, but you have to file to claim them, even if you didn't have any tax withheld. Some tax credits are even refundable, meaning they can give you money back even if you didn't pay any taxes in. Don't leave that money on the table!

I forgot to file an extension last year and was freaking out, but since I was owed a refund it really wasn't a problem! The only thing that bit me was that I waited too long (like 4 years) to file one of my returns and lost out on like $800 refund. Dont be me lol.

21 One other thing to consider - doing delivery work might affect your financial aid package if you're getting any for university. The extra income could potentially reduce your aid eligibility for the next academic year. Might want to check with your school's financial aid office about how that works before diving in.

Great question about financial aid! For FAFSA purposes, there's actually a student income protection allowance of around $7,040 for the 2024-2025 academic year. This means you can earn up to that amount without it affecting your Expected Family Contribution (EFC) at all. However, once you go over that threshold, about 50% of your additional income will be counted toward your EFC, which could reduce your aid eligibility. The exact impact depends on your total family income and circumstances. The good news is that business expenses (like mileage deductions for delivery driving) reduce your Adjusted Gross Income, so they help keep you under the threshold. If you're planning to do delivery work just during breaks, you might be able to stay within the protected amount anyway. Definitely worth having a conversation with your financial aid office before you start - they can run some scenarios to show you exactly how different income levels might affect your aid package.

You mentioned buying your first home - don't forget there are first-time homebuyer benefits that might help with your overall financial situation even if they don't directly relate to the car sale. Depending on your state, there might be assistance programs. Also, make sure you're tracking all your closing costs - some of them might be tax deductible next year!

Great question! As others have mentioned, you're likely in the clear tax-wise since personal vehicles almost always depreciate. Just to be thorough though, make sure you keep documentation of what you originally paid for the Camry (purchase receipt, financing documents, etc.) and what you sell it for. One thing I'd add - if you've made any significant improvements to the car over the years (major repairs, new engine, etc.), keep those receipts too as they can be added to your "cost basis" if needed. But honestly, with a 6-year-old Camry selling for $11,500, you're almost certainly selling at a loss from what you paid originally. Good luck with the home purchase! Using your car sale proceeds for a down payment is a smart move - just make sure your lender knows where that money is coming from so there are no surprises during underwriting.

As someone who's been through the ERC audit nightmare, I want to echo what others are saying about being extremely cautious. The fact that your online sales increased 18% while your physical location was closed actually works AGAINST you in an ERC claim. The IRS looks at whether your business as a whole was substantially impacted. If you were able to maintain or even grow revenue through alternative channels (online sales), they'll argue you successfully adapted and continued operations - which disqualifies you from the "suspension of operations" test. I'd strongly recommend getting a second opinion from a qualified CPA before moving forward with ANY ERC company, especially one that's pressuring you to act quickly. The legitimate credits are still there for businesses that truly qualify, but the audit risk is very real. I'm dealing with a $60K clawback demand right now because the ERC company I used didn't properly document our qualification. Don't let the size of the potential refund cloud your judgment - the penalties for incorrect claims are severe and the companies collecting fees upfront won't be there to help you when problems arise.

I've been following this thread closely as someone who almost fell into the same trap with an ERC company last year. What saved me was doing exactly what several people here mentioned - I got multiple professional opinions before proceeding. The key issue with your situation (and what the ERC companies won't tell you) is that the IRS uses a "facts and circumstances" test for partial suspensions. Even if your physical location was completely shut down, if your business was able to continue operations and actually GROW revenue through other channels, the IRS will likely determine that your core business operations weren't suspended. The IRS specifically looks at whether the business found "comparable" ways to continue operations. In your case, the 18% growth in online sales during the shutdown period would be a major red flag in an audit. It suggests your business successfully pivoted rather than being suspended. I'd recommend documenting exactly what percentage of your pre-pandemic business came from the physical location versus online sales. If online was already your primary channel, you're almost certainly not going to qualify under the suspension test. And with these companies taking 20-30% fees upfront, you're risking a lot for what sounds like a very questionable claim. The horror stories in this thread about disappeared companies and audit nightmares should be all the warning you need. Trust your instincts - if something feels off, it probably is.