This is really helpful! I just checked and it's definitely an S-corporation, so sounds like I should be expecting a K-1. Any idea when they typically send these out? The business manager is kind of disorganized and I'm worried they might miss sending it to me.

S-corporations must file their tax returns (including all K-1s) by March 15th, unless they file for an extension. So you should receive your K-1 by mid-March in most cases. However, many smaller businesses do get extensions, which can push the deadline to September 15th. If you're concerned about the manager being disorganized, I'd recommend reaching out to them directly in early March to remind them that you'll need your K-1 for your personal tax filing. You can always file an extension for your personal return if you don't receive the K-1 in time, but it's better to be proactive and make sure they have your current address and contact information.

Be careful with estimating though! If you underestimate by too much, you'll still get hit with underpayment penalties. I learned this the hard way last year with my first K-1 situation.

This is terrible advice. The IRS expects ALL income to be reported regardless of amount or whether you received a form. Intentionally not reporting income is tax evasion. The penalties for getting caught are way worse than just paying the tax you owe now.

That's just what my tax preparer told me. I'm not saying it's for everyone. Obviously if you're worried about it, go ahead and report it. I'm just saying from a practical standpoint, the IRS isn't conducting audits over small amounts especially when there's no paper trail. They focus their limited resources on bigger fish. But everyone should make their own decision based on their comfort level with risk.

I honestly have no idea what he did with his business taxes. We haven't really talked much since I stopped helping out. I'm guessing he probably didn't report it since he specifically mentioned it was "under the table" when I asked about tax forms.

The friend could also get in trouble for not properly classifying workers and paying employment taxes. So many small business owners don't realize they can't just pay people cash without consequences. They need to either treat them as employees and withhold taxes or properly document independent contractors with 1099s.

Can you still do a Solo 401k if you have another W2 job with a 401k already? I thought there were limits to how much you could contribute across all your accounts.

You can absolutely have both a Solo 401k and an employer 401k, but you're right that there are some limitations. The $23,000 employee contribution limit (for 2025) applies across ALL your 401k accounts combined. So if you've already maxed out your employer 401k, you can't make additional employee contributions to your Solo 401k. However, the employer contribution portion of your Solo 401k is completely separate and not affected by your W2 job's 401k. You can still contribute up to 25% of your net self-employment income as the "employer" portion to your Solo 401k, even if you've maxed out your other 401k.

Does Quickbooks handle calculating the home office deduction well? I've heard that's one of the trickier deductions to get right and I don't want to raise audit flags.

Did you have any issues with the I-9 process though? An ITIN doesn't provide work authorization, so I'm curious how you handled the employment eligibility verification requirement.

That's a completely separate issue from tax compliance, and you're right to bring it up. Getting an ITIN only addresses the tax identification requirement, not work authorization. For employment eligibility, each business has to determine their own approach based on their understanding of applicable laws. Some of our workers were able to adjust their status through various programs and eventually obtained work authorization. Others transitioned to providing services through their own small businesses where they had multiple clients (not just us).

Yes! We used a Certified Acceptance Agent for our farm workers' ITIN applications and it was much smoother. The agent verified their original identification documents on the spot, so they didn't have to mail in passports or birth certificates. The processing time was about 5 weeks instead of the usual 7-9 weeks when submitting directly to the IRS. The agent also helped make sure the tax returns filed with the applications were properly prepared, which prevented delays from errors. It cost a bit more but was totally worth it for the faster processing and reduced headaches.

Thanks for that, though it makes me feel even worse knowing they're just sitting on my money! Do you know if they at least apply the unclaimed refunds to the federal deficit, or does it just go into some general fund?

It goes into the general Treasury fund from what I understand. So technically it's reducing the deficit by contributing to general government revenue, but it's not specifically earmarked for debt reduction. The whole situation definitely sucks. If it makes you feel any better, you're far from alone - the IRS reports that they have billions in unclaimed refunds every three-year deadline. The system absolutely doesn't make it easy for people.

That's not accurate. If you're owed a refund, there's no penalty for filing late. The IRS only issues failure-to-file penalties when you OWE them money and don't file. They don't penalize people for not claiming money the IRS gets to keep.