Would keeping a log of hours worked (which would be basically zero) help document this? I have a similar situation but with a small rental property in my S-Corp that basically runs itself through a property management company. I literally spend maybe 2-3 hours per YEAR on it.

Yes, a log of hours would be extremely helpful documentation. For your situation with just 2-3 hours annually, that's exactly the type of minimal involvement that supports a no/low salary position. I'd recommend documenting not just the hours but specifically what you do during those hours. Show that you're only making high-level oversight decisions while the property management company handles all the actual work. Include copies of your property management agreement in your corporate records to further substantiate your minimal involvement.

The accumulated earnings tax doesn't apply to S-Corps, only C-Corps. S-Corps are pass-through entities where income is taxed to shareholders regardless of whether it's distributed. The penalty you're probably thinking of is for personal holding companies, which is different.

I think I'll make around $18,000 this year if I keep working the same hours, so I guess I will have to file? And yes I'm pretty sure my grandparents claim me as a dependent since I live with them and they pay for most of my stuff. Does that change things?

Yes, at $18,000 you'll definitely need to file a tax return. Being claimed as a dependent does change things a bit. You won't be able to claim your own personal exemption, and there are some credits you might not qualify for. Make sure to check the box on your tax return that says someone else can claim you as a dependent. This is important because if you don't check it but your grandparents claim you, it will create problems for both returns. Also, as a dependent with income, you'll need to file your own return - your grandparents can't include your income on their return.

This!!! Also, set a calendar reminder for mid-February to check if you've received your W-2. If you haven't gotten it by February 15th, you should contact your employer. They're legally required to send it by January 31st.

That's a great point! I don't think I saved my last paystub, but now I'm going to check my email to see if they sent electronic copies. I vaguely remember getting emails when a new paystub was available, but I usually just checked the deposit amount. If I can find that last one from December it would solve everything! Thanks for the suggestion!

Happy to help! Even if you can't find the December one, any paystub from late in your employment might be useful since it would have the year-to-date totals up to that point. You could then estimate the additional earnings for your remaining time there. And don't forget to check your spam folder - payroll emails often end up there.

I had to use Form 4852 two years ago and had zero issues. The IRS actually processes these pretty routinely. As long as your estimates are reasonable and you document your attempts to get the W2, you should be fine. My refund wasn't delayed at all. The employers are the ones who typically get in trouble, not you.

What about if I have to go through a toll on my way to a client but I wouldn't normally take that route for personal stuff? Like I only use that toll road because it gets me to the client faster?

That's a perfect example of a fully deductible business toll expense. If the toll road is specifically being used to reach a client or for business purposes, then 100% of that toll is deductible. The key test is whether you would have incurred that specific toll charge if you weren't conducting business. This is why good record-keeping is so important. Having your appointment calendar or client meeting logs to match up with the toll receipts creates a clear paper trail showing the business purpose. The IRS loves to see that kind of documentation if they ever question your deductions.

While toll expenses alone probably won't trigger an audit, they could come under scrutiny if your return is audited for other reasons. The IRS typically looks at the whole picture of your business deductions.

Thanks for the insider perspective! My audit letter does have a specific person's name and number. I've tried calling a few times but always get voicemail. Is it better to keep trying that direct line or go through the main IRS number?

Definitely keep trying the direct line to your assigned auditor. Leave detailed but brief voicemails with your name, tax ID number (last 4 digits only for security), and the best time to reach you. Most auditors handle multiple cases and check messages regularly, even if they don't answer calls immediately. The main IRS line will just put you in the general queue and whoever answers likely won't have immediate access to your specific case details. Your assigned auditor already knows your file and has the authority to make decisions on your case. Persistence is key - try calling at different times of the day, especially early morning right when offices open.

How did that work out for you? Did they manage to reduce what you owed? I've heard mixed things about H&R Block's representation services.