What about for a single-member LLC? Are the rules any different since it's a disregarded entity for tax purposes? Could I take loans from my business more easily?

For a single-member LLC that's a disregarded entity, the situation is actually quite different. Since a disregarded entity is treated as the same taxpayer as you for federal tax purposes, technically you can't loan money to yourself - it would be like taking money from one pocket and putting it in another. The business funds are already considered your funds from a tax perspective, so there's no tax advantage to structuring withdrawals as loans. You're already being taxed on the business profits regardless of whether you withdraw the money or not (via Schedule C on your personal return). That said, for proper bookkeeping and to maintain the liability protection of your LLC, you should still document any personal withdrawals properly. If you're mixing business and personal funds without documentation, you risk piercing the corporate veil in legal situations.

Completely different. The billionaire strategy works because they're borrowing from a third party (bank or broker) using assets as collateral. They're not taking money directly from their companies without taxation. When Musk or Bezos get liquidity, they either: 1) Take loans from banks using their stock as collateral (legitimate third-party loans), 2) Sell shares and pay capital gains tax, or 3) Receive salaries/compensation that are taxed as income. The "loan" from your own business isn't actually a loan in the IRS's eyes unless it meets very specific criteria that most small business owners don't satisfy. Otherwise it's just income/distribution with extra steps.

Wait, this sounds serious. I don't have signature authority on any accounts in Ecuador, but since I'm sending money and receiving profits, could that count as having a "financial interest"? How would I know if I need to file this FBAR thing?

The definition of "financial interest" can be broad. If you have an arrangement where you're entitled to profits from the business, the IRS might consider you to have a financial interest in the accounts, even without signature authority. The safest approach would be to consult with a tax professional who specializes in international reporting. But generally, if you're investing in a business and receiving returns based on performance, you likely have a financial interest. If the total of all foreign accounts you have an interest in exceeds $10,000 at any point in the year, you'd need to file the FBAR. You might also need to look into Form 8938 (Statement of Specified Foreign Financial Assets) depending on the amounts involved. These are separate from your tax return and have different filing requirements and deadlines.

That approach could create more problems than it solves. The IRS looks at the substance of transactions, not just what you call them. If there's a pattern of you investing money and then receiving returns that correlate with business performance, relabeling them as "gifts" could be seen as tax evasion. While non-US persons can give gifts to US citizens without triggering gift tax for the recipient, unusual patterns of large gifts might trigger extra scrutiny. If audited, you'd need to prove these were genuine gifts with no expectation of return, which contradicts the investment arrangement described.

Thank you for that tip about separate envelopes! I definitely would have put them all in one package thinking I was being efficient. Did you receive any kind of confirmation when they received/processed the returns? I'm worried about them getting lost in the mail.

You should definitely send them certified mail with return receipt requested through USPS. That way you'll get confirmation they were delivered. As for processing, it took about 4-5 months before we saw any activity - they're very slow with paper returns. Eventually, we received notices for each return - either bills for what was owed (with penalties) or notices about refunds. If you're really concerned, you can check your husband's IRS transcript online about 6-8 weeks after sending them to see if they show as processed.

Yep, this is correct. I worked for a tax firm and we had clients who lost out on thousands in refunds because they waited too long. The 3-year rule for refunds is strict, but the IRS can come after you for taxes owed for much longer!

That's a good point! All of these expenses are legitimate photography equipment (new lenses, lighting, a laptop used only for editing) and documented travel to shooting locations. My business income that year was around $36,000 so the $7,800 in additional expenses isn't out of proportion. Do you think that's going to raise any red flags?

Those expenses sound reasonable given your business type and income level. Photography equipment is clearly a necessary business expense, and as long as your travel was primarily for business purposes and you have documentation (like client contracts showing shoots on those dates), you should be fine. The $7,800 compared to $36,000 in income is a perfectly reasonable ratio for a photography business, which typically has higher equipment costs. Just make sure to categorize everything correctly on your Schedule C - put the equipment under "Equipment" not "Supplies" if it's over $2,500 per item and will last more than a year (might need to be depreciated rather than fully expensed, depending on whether you took Section 179 or bonus depreciation).

Yes! This happened to me. I amended to add some business expenses like OP is planning to do, calculated I was due about $1,300 back, but the IRS sent me $1,467. The difference was interest they added because of how long it took them to process the amendment.

7 Omg thank you for mentioning this! I just checked my W2 and there's like $300 in box 4 and $75 in box 6. SPRINTAX never mentioned anything about this. Do I need to file something special to get these back??

9 You need to file Form 8843 along with a special statement requesting a refund of incorrectly withheld FICA taxes. SPRINTAX should have this capability, but sometimes you need to specifically indicate your FICA exempt status. If they missed this, you can either restart your SPRINTAX return and make sure to answer the FICA questions correctly, or use a different service that better handles J1 visa FICA exemptions. This could easily explain why your friends got larger refunds if they properly claimed their FICA exemptions and you didn't.

13 This is so confusing! I worked 4 months and made about $12,000 total. My employer is a big company that hires tons of J1s every year so I assumed they knew what they were doing with the withholding. Is there any way to know if they did it right?