Thanks for this detailed breakdown! I didn't realize getting an EFIN was so involved. Do you know roughly how long the whole process takes from applying for a PTIN to getting approved for e-filing?

Getting a PTIN is pretty quick - usually just a few days if there are no issues with your application. The EFIN process is much longer. After you submit the application, get fingerprinted, and complete the background check, it typically takes 45-60 days for approval. So if you're thinking about offering this service for the upcoming tax season, you should start the application process immediately. And remember that you'll need to renew your PTIN annually, which means additional fees. The EFIN doesn't need annual renewal, but you do need to keep your information updated with the IRS.

This is misleading. An ERO still needs an EFIN from the IRS, which requires background checks and compliance with IRS e-file regulations. You can't just "become" an ERO without going through the proper channels. And for the PTIN holder, they're still taking on liability for returns they "sign" - most professionals won't do this unless they're properly compensated and have reviewed everything.

You're right, I should have been clearer. Yes, you still need an EFIN to be an ERO, which requires the background check and application process. What I was trying to say is that there are partnership arrangements where one person has the client relationship and another has the PTIN, working together to provide the service. It's definitely not a shortcut around IRS requirements - just a different business model. Thanks for the correction!

But OP said they're becoming a resident for tax purposes in 2025, meaning they're still a nonresident alien right now. I don't think nonresident aliens qualified for stimulus payments unless they were married to US citizens or residents.

I actually checked with the financial aid office already and they said they haven't processed anything for me recently. All my scholarship funds for last semester came through months ago, and the fall semester payments aren't scheduled to process until next month. The deposit definitely came from the Treasury Department based on the routing info.

I used it last year and honestly found it disappointing for quarterly payments. It's decent for annual filing, but the quarterly tool was basic and didn't save me much time. Plus it didn't sync well with my bank accounts. I switched to QuickBooks Self-Employed which is much better for tracking throughout the year and calculating quarterly payments accurately.

Thanks for the honest review! That's really helpful. Maybe I'll look into QuickBooks Self-Employed instead. I'm not doing anything super complicated tax-wise but just want something reliable that won't make me do all the math myself every quarter.

That's really helpful to know! So if this is my first year being self-employed, would I use my tax liability from last year when I was a W-2 employee as the safe harbor amount?

Exactly! Even though your situation has changed, you can use your total tax liability from last year's return (the total tax, not just what you owed at filing time) as your safe harbor amount. Divide that by 4 and pay that amount each quarter, and you'll be penalty-proof even if your self-employment income is significantly higher. Just remember that while this protects you from penalties, you'll still need to pay any additional tax you owe when you file your return. But at least you won't have those nasty underpayment penalties added on top!

This is terrible advice. The IRS absolutely cares about unreported income of any amount! They have automated systems that match reported income against your return. If the employer files a 1099-NEC and you don't report it, you'll likely get a CP2000 notice. Don't risk penalties and interest to save a few bucks in taxes.

I was speaking from practical experience rather than the technical rules. Yes, you're correct that all income should legally be reported. The automated matching system does exist, but in reality, very small discrepancies often don't trigger further action due to the IRS's limited resources. However, I should have been clearer - it's always best practice to report all income regardless of amount because it's the law, and because even small unreported amounts can cause problems if there are other issues with your return that trigger a review.

You have a few options. If you know the employer will issue a 1099-NEC, you'd report it on Schedule C and pay self-employment tax. However, for a one-time payment where your status is unclear, you could report it as "Other Income" on Schedule 1, Line 8z. This reports the income without self-employment tax.

What's the best way to track basis? My accountant never mentioned this but I'm taking pretty large distributions relative to my salary ($60k salary, $120k distributions) this year.

I use a separate spreadsheet that tracks my basis year by year. Start with your initial capital contribution, add your income (or subtract losses) each year, subtract distributions, and that gives you your current basis. For your situation specifically, assuming this is your first year with those numbers, your basis would increase by the full $180k of business income and decrease by the $180k you're taking out ($60k salary + $120k distributions), so you'd be at break-even. But if you've taken losses in previous years or taken prior distributions, you'd need to factor those in. Many tax software programs like TaxACT or TurboTax Business can help track this, or you can ask your accountant to prepare a basis schedule for you annually.

Does this apply to HSA contributions too? I just set up an S-Corp and was planning to do a company-sponsored HSA.