Doesn't creating an LLC and doing the S-Corp election cost a lot in administrative fees? I've heard you need to run payroll and everything. Is it really worth it for just one property?

You're right that it doesn't make financial sense for just one property. The administrative costs (state filing fees, payroll service, possibly a CPA) would likely outweigh the tax benefits until you have multiple properties generating significant income. For a single property, increasing your W-4 withholding or making quarterly estimated payments is definitely more cost-effective. I'd say the S-Corp approach usually starts making sense around 3-5 properties or when rental income exceeds about $40,000 annually. Until then, the simpler approaches others have mentioned are your best bet.

This is really important. Depreciation is actually required by the IRS even if you don't claim it. And they'll hit you with depreciation recapture taxes when you sell regardless. So definitely claim it!

That exclusive use requirement is so tricky! I have a home daycare and the IRS has different rules specifically for daycare providers. We can claim spaces that have mixed use (like kitchen, bathroom) based on time used for business. I wonder if there's any similar exception for pet boarding? Might be worth looking into.

That's a really good point. Do you think I need to file amended returns for previous years? Or could I just start doing it correctly going forward? I'm a bit worried about opening a can of worms if I start amending returns.

Generally, if you discover an error on past returns, you should file amended returns. However, there's a 3-year statute of limitations on most tax issues, so you'd typically only need to amend returns from the past 3 years. That said, this isn't necessarily a black-and-white error. There are legitimate situations where rental arrangements between yourself and your business can be appropriate, especially if you have the right business structure. Before amending anything, I'd recommend getting that third opinion from someone who can look at your specific situation. If you do need to amend, a tax professional can help you present the changes in the most favorable light, possibly reducing or eliminating penalties. Sometimes when you self-disclose and correct issues, the IRS is more lenient than if they discover the issue during an audit.

Did you use a tax professional to help with your Offer in Compromise or did you handle it yourself? I'm wondering if it's something I can navigate on my own or if I should budget for professional help.

I started the process myself but ended up hiring a tax resolution specialist about halfway through. The forms themselves aren't super complicated, but determining the right offer amount is tricky. The IRS rejected my first submission because I miscalculated my "reasonable collection potential." The professional helped me resubmit with the correct calculations and stronger documentation of my hardships. It cost me about $1,500 for their help, which felt worth it since they got my offer accepted. If your situation is straightforward you might be able to do it yourself, but having someone who knows what the IRS is looking for definitely improved my chances.

Is that automatic or do you have to apply for that specific benefit? My tax debt is around $14k so I'm worried about liens affecting my credit.

Thanks for suggesting this! Do you have any idea how much a CPA typically charges for handling a simple amendment? I'm trying to weigh if the potential refund would be worth the professional fees.

For a relatively straightforward amendment like yours, most CPAs would charge somewhere between $200-500 depending on your location and the complexity of your overall tax situation. If your $3,800 business expense would significantly reduce your self-employment taxes (which can be 15.3% of your net earnings), you could potentially recover $500-700 or more, making the CPA fees worthwhile. Plus, they'll handle all the paperwork and respond to any IRS inquiries, which adds value beyond just the monetary return.

Does anyone know if the free tax filing services like FreeTaxUSA or Credit Karma support e-filing amendments? Or is this only available in the paid versions of software?

Last I checked, FreeTaxUSA does support preparing and e-filing 1040-X amendments, even in their free version for federal returns (though state amendments might have a fee). Credit Karma Tax (now Cash App Taxes) has been a bit behind on amendment e-filing support, but they might have added it by now. One important thing to note is that you can only e-file an amendment if your original return was also e-filed. If you filed by paper originally, you'll need to submit your amendment by paper too.

Thanks for this! I had no idea about Form 8843 being required even without income. Do you know if there's a deadline difference for that form compared to the regular tax filing deadline?

The Form 8843 follows the same deadline as your tax return, which is generally April 15th for the previous tax year. However, if you don't have any income to report and are ONLY filing Form 8843 (no 1040-NR needed), then you actually have until June 15th to submit it. Since you mentioned having research assistant income, you'll need to file both Form 8843 and Form 1040-NR by the April 15th deadline (unless you file for an extension). Make sure you keep copies of everything you submit - international student tax records can be important for future visa applications or if you eventually apply for permanent residency.

Most free services don't support Form 1040-NR which international students need to file. I tried FreeTaxUSA last year and had to stop halfway when I realized it wasn't designed for nonresident aliens. Ended up using Sprintax which costs money but handles both federal and state correctly for F1 students.