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Consider using a tax professional with military expertise rather than trying to navigate this yourself. VITA (Volunteer Income Tax Assistance) programs on military bases specifically handle these situations and they're free. Most bases have them from January through April. Alternative option: Military OneSource offers free tax filing with H&R Block that includes state returns and access to tax consultants who understand military-specific situations. Their service is available until October 15th for extensions. These specialized services understand PCS moves, multiple state filings, and combat zone tax exclusions better than general tax preparers.
As someone who's dealt with military tax situations across multiple states, I want to emphasize checking your Leave and Earnings Statement (LES) for state tax withholdings - this can give you a clue about how your unit's finance office is handling your state tax situation. Also, make sure you understand California's "safe harbor" provisions under Revenue and Taxation Code 17014. If you maintained California voter registration, driver's license, and bank accounts, you're likely still a CA resident for tax purposes. One thing that trips up many military families is assuming that being stationed somewhere automatically makes you a resident there - military orders specifically prevent this under SCRA. Document everything about your California ties (voter registration, vehicle registration, etc.) in case you need to prove residency status later. The key is consistency - don't claim non-resident status in California while maintaining all the legal indicators of being a California resident.
Does anyone know if there's a minimum salary requirement for S Corps? My CPA told me I need to pay myself at least $40k, but a buddy with an S Corp says he only pays himself $30k on $90k of revenue. I'm confused by all the different advice.
There's no specific minimum dollar amount required by the IRS for S Corp owner salaries. The key requirement is that it must be "reasonable" for the work performed and your industry. Your friend paying himself $30k on $90k revenue (33%) might be fine if he's in an industry where a lot of the work could legitimately be done by lower-paid employees or if much of the profit comes from non-service factors (like product sales or passive income). But if he's providing skilled professional services himself, that's likely too low and could trigger an audit.
This is such a common struggle for new S Corp owners! I went through the exact same thing when I converted my consulting business two years ago. Based on my research and discussions with my CPA, here's what I learned: The IRS doesn't have a magic formula, but they do look at several factors - what you'd pay someone else to do your work, your geographic location, your experience level, and the time you spend on the business. For a web developer in the Midwest making $120k net profit, I'd lean toward the higher end of reasonable compensation - probably around $70-80k salary. Since you're doing ALL the work (coding, design, client meetings), you can't really argue that a significant portion of the profit comes from business assets or other employees. One thing that helped me was looking at actual job postings for senior web developers in my area and calculating what a full-time equivalent would make, then adjusting slightly for the entrepreneurial risk/reward factor. I kept screenshots of those job postings as documentation. Also, don't forget that paying yourself a higher salary isn't necessarily "bad" from a tax perspective - yes, you'll pay more in employment taxes, but you'll also build up more Social Security credits and potentially qualify for higher unemployment benefits if needed. The key is finding the sweet spot that's defensible to the IRS while still providing S Corp tax benefits.
Anyone know if it makes a difference whether you set up the campaign for yourself vs for someone else? Like if I create it for my brother but use my account, does that make me responsible for taxes?
Great question! I went through something similar when helping my neighbor after a house fire. The key thing to remember is that donations for personal hardships like legal fees are generally treated as gifts, not taxable income to the recipient. However, there are a few important considerations: First, keep detailed records of all donations and how the money is used - this documentation will be crucial if there are ever any questions. Second, be very clear in your campaign description that the funds are for personal legal expenses, not for any business purpose or in exchange for goods/services. Regarding who sets it up - it doesn't fundamentally change the tax treatment, but having your cousin create it directly might be simpler administratively. If you set it up and the money flows through your account first, you'll technically be making a gift to him when you transfer the funds (though this usually doesn't create tax issues either). One heads up: if the campaign raises over certain thresholds (typically $20,000+ with 200+ transactions), the platform may issue a 1099-K form. Don't panic if this happens - it doesn't automatically make the money taxable. You just need to properly document on the tax return that these were non-taxable gifts for personal expenses. Consider consulting with a tax professional if you end up raising a substantial amount, just to make sure everything is handled correctly.
check your mail! sometimes when wmr changes like that it means they sent you a letter asking for more information. if you don't respond to those letters your refund just sits in limbo forever
I went through the exact same thing last month! The WMR progress bars disappeared and it just showed "processing" for about 3 weeks. That 570 code on your transcript is definitely what's causing it - it puts your return into manual review which takes it out of the automated system that feeds WMR. In my case, it was EIC verification since I also had a substantial EIC like you do ($4,446 is pretty significant). They were just making sure all my income and dependent info matched up. The good news is that once they complete the review, you'll see a 571 code (which releases the hold) followed by an 846 code with your actual refund date. Mine took exactly 21 days from the 570 date to get resolved. Keep checking your transcript every few days - that's way more reliable than WMR right now. And don't worry too much, the vast majority of these holds get resolved without you having to do anything. Hang in there!
CosmicCruiser
Watch ur bank account like a hawk. Mine hit exactly 5 days after processing date
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Malik Davis
ā¢good to know! ill keep checking š
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Ethan Wilson
The IRS transcript can definitely be confusing at first glance! Just to add some context to what others have said - that $2,259 credit (Code 766) might be the Child Tax Credit or Additional Child Tax Credit since you filed HOH with 3 exemptions. The combination of your EIC ($6,164) plus that additional credit ($2,259) minus your self-employment tax ($2,543) gives you that sweet $5,880 refund. Since your processing date was March 27th and credits posted April 15th, your refund should have been issued shortly after. Have you received it yet or are you still waiting?
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