Thanks for the straight talk. I know I messed up big time. Do you think being in Canada offers any protection, or does that actually make it worse? And roughly what percentage of the collected amount would penalties typically be?

Being in Canada doesn't protect you - it potentially complicates things. US states can work with Canadian authorities, plus they can go after your US assets including marketplace accounts/funds. eBay and other platforms also comply with tax authorities when legal action is involved. Regarding penalties, it varies by state, but for intentional fraud (which is what this would be classified as), you're typically looking at: - 100% of the tax collected - Interest (varies by state, typically 4-10% annually) - Fraud penalties (50-100% of the tax amount) - Possibly collection fees and other costs So worst case, you could be looking at 2-3 times the amount you collected. With voluntary disclosure, you might get the fraud penalties waived, which would be huge. But you'd almost certainly still owe the base tax amount plus interest.

That used to be the case, but it all changed after the South Dakota v. Wayfair Supreme Court decision in 2018. Now states can require remote sellers (including international ones) to collect sales tax once they pass certain economic thresholds - usually around $100k in sales or 200 transactions. So if OP was selling enough to US customers in specific states, they would legally be required to collect and remit sales tax to those states, even though they're physically located in Canada.

Thank you so much for this step-by-step breakdown! I tried again following your exact instructions and found the mileage section. You were totally right - I had selected "Other services" instead of specifically "Delivery services" which is why I couldn't find the mileage entry screen. Got all 12,500 miles entered now and seeing a nice reduction in what I owe. You just saved me a ton of money!

I've been using Stride for 2 years with my delivery gigs and it's been super reliable. The automatic tracking works really well and you can edit trips if needed. The best part is it generates a tax-ready summary at the end of the year that you can just input directly into TurboTax. Saves so much time compared to manual logging.

Does this work for regular people too? Like if I have a small YouTube channel or something, would it make sense to set up a company?

It depends entirely on your income level and future expectations. For a small YouTube channel, it's probably not worth the setup and maintenance costs until you're earning at least $75-100K consistently. Below that threshold, the tax benefits usually don't outweigh the additional costs and paperwork. However, if you're growing rapidly or expect significant income in the near future, it might make sense to establish the structure early. This is especially true if you're branching into merchandise, speaking engagements, or other revenue streams beyond just ad revenue. The liability protection alone can be valuable as your public profile increases.

That's interesting! Did the actor also use the company to buy equipment or vehicles that were partly for business use? I've heard that's another tax advantage.

What about the psychological factor though? I know financially it makes sense, but I LOVE getting a big refund. It feels like a forced savings account and I usually use it for something fun or a big purchase I've been putting off.

That's actually a really good point! Personal finance isn't just about the math - psychology plays a huge role too. If getting a refund works as a "forced savings" mechanism for you and you enjoy that annual windfall, there's definite value in that approach for many people. I always tell clients to do what works best for their lifestyle and habits. For some people, the discipline of keeping that extra money each paycheck and investing it is tough. If you know you'd just spend that extra $50-100 per paycheck on random things, but would use a $1,200-2,400 refund for something meaningful, then by all means, set your withholding accordingly!

You're definitely not alone! I do the same thing. With interest rates on savings accounts being so low for so many years, I didn't feel like I was missing out on much. And there's something really satisfying about getting that big deposit all at once.

Wait, can you file the S Corp extension (Form 7004) electronically yourself? Or do you need a tax professional to do it? We're trying to save money where we can since our first year was so rough.

Yes, you can absolutely file the Form 7004 electronically yourself! You don't need a tax professional. You can use the IRS e-file system, or many tax software programs include the ability to e-file the extension. If you're really trying to save money, even the free versions of some tax software will let you prepare and e-file just the extension forms. Just make sure you still estimate any taxes owed properly, as the extension only gives you more time to file the paperwork, not more time to pay.

This is so important! My friend got an extension for his S Corp but didn't realize he still needed to make his quarterly payroll tax deposits on time. Ended up with some hefty penalties.