That's a really good point I hadn't considered. So we need to be careful about both the 99-6 implications AND making sure we satisfy Section 351 for the C corp formation. Does the order of operations matter here? Should we structure the documents differently to better protect the Section 351 treatment?

The order of operations definitely matters for protecting your Section 351 treatment. I'd recommend structuring your documents to emphasize that the partnership interests are being contributed to the new C corp as part of the overall restructuring plan, not as separate transactions. You might want to consider having the agreements executed simultaneously rather than sequentially with a time gap. Even a few minutes between transactions creates risk. Another approach is to use binding agreements that explicitly reference each other and make clear that all steps are conditional on the completion of the entire plan. This strengthens your position that it's a single integrated transaction for tax purposes.

Good point! My LLC operating agreement specifically states that if only one member remains, the LLC continues without dissolution and automatically converts to a single-member LLC. Might be worth checking for similar language in the partnership agreement.

Thanks so much! That's super helpful. One more question - did you have to do anything special to indicate that you made contributions for two different tax years in the same calendar year? That's the part I'm most worried about messing up.

For contributions to different tax years, you report the contribution for the previous tax year on that year's return (so your 2023 contribution would be on your 2023 return), but all conversions go on the return for the year when they actually happened. If you already filed your 2023 return without reporting the contribution, you'll need to amend it. In FreeTaxUSA, go to the "Amend 2023 Return" option from your account page. Then both conversions will be reported on your 2024 return since they both happened in 2024.

You're in the ideal situation for a backdoor Roth! With no existing Traditional IRA balances, you don't have to worry about the pro-rata rule. It is indeed as simple as: 1. Report the nondeductible Traditional IRA contribution 2. Report the conversion to Roth Since you have no pre-tax money in any Traditional IRAs, your conversion will be tax-free (except for any earnings between the contribution and conversion). The pro-rata headaches only come into play when you have existing pre-tax money in Traditional IRAs. Consider yourself lucky!

Does Sprintax handle regular 1040 filing too? I'm actually a resident for tax purposes this year (passed the substantial presence test), so I need to file a regular 1040, not a 1040NR. That's why I was trying to use TurboTax.

Yes, Sprintax can handle your transition from nonresident to resident status. They have a feature specifically for people who were nonresidents in previous years but are now residents. It's called Sprintax Federal and can prepare regular 1040 returns. They're particularly good at dealing with the complications that come with that transition, like handling income from before and after your status change, properly reporting state tax refunds from nonresident years, and applying the correct treaty benefits if you're still eligible for any. Their system is designed to understand international tax situations even after you become a resident.

No, the standard deduction for nonresidents on 1040NR is not the same as itemized deductions. As a nonresident on F-1 last year, you were only eligible for a limited standard deduction (around $12,950 for 2023 if you were single). If you took the standard deduction (which most students do), then your state tax refund is NOT taxable this year. State refunds are only taxable if you itemized AND claimed state taxes as part of those itemizations in the previous year.

Oh that makes sense! I definitely took the standard deduction then because I remember the software recommending it since I didn't have enough deductions to itemize. So I can just put $0 for the taxable portion of my state refund?

16 Do you know if H&R Block offers the same feature? That's what I've been using for years and would prefer to stick with it if possible.

21 Yes, H&R Block does offer 1099 filing capabilities in their small business versions. You'd need their Premium & Business or Business & Investment packages to access those features. However, if you're only filing one 1099, it might be more cost-effective to use one of the standalone services others have mentioned, since the upgrade cost for H&R Block might be higher than just paying for a single 1099 form processing. The benefit of using your existing tax software is everything stays in one system, which makes record-keeping easier for future years.

1 Thanks for this reminder! I completely forgot about that aspect. Would this go under "Contract labor" on the Schedule C, or should I list it somewhere else? I've never had this expense before.

Do you remember how long it took from when the IRS said "refund sent" to when you actually got your money? That's the part that's making me nervous - the gap between the IRS sending it and me actually receiving it after Green Dot takes their cut.

After the IRS showed "refund sent" on the Where's My Refund tool, it typically took about 5 business days before the money showed up in my bank account. The timing was pretty consistent across all three years I used this option. There's definitely a delay compared to direct deposit straight from the IRS, but it was predictable. I just marked my calendar for 5 business days after the IRS sent it and the money always showed up by then.

I called Green Dot last year when this happened to me. They were actually surprisingly helpful. You need your SSN and the exact refund amount to verify your identity. They could see exactly when they received it from IRS and when they sent it to my bank. In my case, they had already sent it but my bank was holding it for 24 hours. Got it the next day.