I went through this EXACT scenario but back in 2022. Honestly, just file an extension right now! Not worth stressing over the S-Corp issue for 2023 - it's too late to use it for last year. Just make sure you're set up correctly for 2024. Here's what I wish someone told me: the S-Corp election is really only worth it once you're making consistent profit. My accountant said rule of thumb is $40k+ profit before the savings outweigh the hassle and extra costs. The first year I spent more money on payroll services, extra tax filings, and accountant fees than I saved in SE taxes!

Just wanted to echo what others have said - you definitely missed the window for 2023 S-Corp election since your LLC was formed in 2024. The IRS is pretty strict about those timing rules being based on entity formation date, not when you started business activities. That said, don't stress too much about it! For a side business that started mid-year 2023, you're probably not missing out on huge tax savings anyway. The S-Corp election really shines when you have consistent higher profits. Definitely file that extension (Form 4868) ASAP to buy yourself time until October. And when you do meet with an accountant, have them run the numbers on whether S-Corp makes sense for 2024 based on your projected income. Sometimes the extra compliance costs and payroll requirements aren't worth it until you hit that $40k+ profit threshold that others mentioned. Good luck getting everything sorted out! The fact that you're thinking about tax optimization shows you're on the right track with your business growth.

Had this exact thing happen to me in 2022! My advice: document EVERYTHING. Save all your incorrect paystubs, take screenshots of the wrong SSN, keep email chains with HR and payroll, etc. I ended up with issues even after they "fixed" it because the first 3 quarters of reporting had already been sent to the IRS with the wrong SSN. When tax time came, I had to file on paper instead of electronically, and I had to include a letter explaining the situation along with documentation. It delayed my refund by months but eventually got sorted out.

This is a serious issue that needs immediate attention. Since you mentioned this started in January 2024 and we're getting close to tax season, time is of the essence here. Beyond what others have mentioned about getting corrected W-2s, I'd also recommend contacting the IRS directly to report the situation proactively. You can call the IRS Business & Specialty Tax Line at 1-800-829-4933 to explain the situation and create a paper trail. This way, if there are any discrepancies when your employer files their quarterly reports, the IRS will already have a record of the issue. Also, make sure to request a Social Security Statement from the SSA to verify that your earnings are being properly credited to your account. You can do this online at ssa.gov. If the wrong SSN was used, your earnings might not be showing up correctly, which could affect your future Social Security benefits. One more thing - if your employer uses a third-party payroll service like ADP, make sure the correction flows through to ALL systems, not just the paystub generation. Sometimes these fixes only get applied to one part of their system while other reporting functions still use the old information.

For anyone still working on their ERC claim, be extremely careful about the documentation. I'm an office manager who handled our company's claim last year, and we just got notification of an audit. The IRS is scrutinizing these claims heavily! Make sure you have: - Specific documentation showing how COVID restrictions directly impacted your operations - Revenue comparisons by quarter showing exact percentage drops - Documentation proving you weren't double-dipping with PPP funds for the same wages - Complete and accurate quarterly payroll records The IRS is especially focused on the "partial suspension of operations" qualification. If you're claiming under that (rather than revenue drop), you need extremely solid evidence connecting government orders to your specific business limitations.

I'm in a similar situation - small business owner who kept employees during COVID but haven't filed for ERC yet. This January 31st deadline is really concerning! From what I'm reading here, it sounds like the key is having solid documentation ready. We had a 35% revenue drop in Q2-Q3 2020 and kept all 8 employees on payroll. I've been procrastinating on this because the paperwork seemed overwhelming, but with potentially $200k+ in credits at stake, I need to act fast. Has anyone successfully filed in the last few weeks of the deadline? I'm worried about the IRS being swamped with last-minute applications and potentially rejecting claims due to processing backlogs. Also wondering if there's any chance Congress might extend this deadline given how short the notice period is for legitimate businesses.

Has anyone who experienced this actually received their refund yet? And if so, did you have to provide any additional documentation to the IRS, or did it just eventually process on its own?

I'm dealing with the exact same situation! Filed on March 5th, got the 5-day denial on March 12th, and now my SBTG account shows "not found" as of yesterday. As a fellow gig worker, this is really stressing me out since I need to make my Q1 estimated payment soon. Based on what everyone's sharing here, it sounds like this is unfortunately normal for our type of returns this year. I'm going to check my transcript tomorrow to look for those TC 570 and TC 971 codes that were mentioned. Really hoping this resolves within the 7-14 business day timeframe that Nora mentioned. Has anyone found that contacting the IRS actually helps speed this up, or should I just wait it out?

Quick question - are there different rules for different types of businesses? I run a small etsy shop and have maybe $600 in undocumented expenses for materials last year.

The good news is that you're planning to report all your income - that's the most important part and shows good faith to the IRS. The penalties for poor record-keeping are typically not as severe as people think, especially for honest taxpayers. Here's what you should do immediately: 1. **Reconstruct what you can**: Go through your bank statements, credit card records, and payment apps (Venmo/PayPal) to create a comprehensive list of all business income and expenses. 2. **Create a simple tracking system**: Use a spreadsheet or basic accounting software to categorize everything. Include dates, amounts, vendors, and business purposes. 3. **Save digital evidence**: Screenshot your payment app histories, save any client emails or text messages about work performed, and gather any photos of your work that might support your income claims. 4. **Start proper record-keeping now**: Going forward, keep all receipts and maintain organized records. Consider using a dedicated business bank account and credit card. For your $3.5k in component expenses, even without receipts, you can still claim legitimate business deductions if you can reasonably reconstruct them using bank statements or credit card records. The IRS understands that small businesses sometimes have imperfect records, especially in the first year. The key is demonstrating that you're making a good faith effort to comply and be accurate. You're much better off than someone trying to hide income entirely.