Is there a minimum amount of contractor income before you have to file Schedule C? I just started doing some small side gigs and wasn't sure if I need to bother with all this.

There's no minimum threshold for filing Schedule C if you're self-employed. Even if you only make $400 in contractor income for the year, you need to report it. That's also the threshold where you have to pay self-employment tax. It seems like a pain for small amounts, but it's way better than getting a letter from the IRS later. Plus, reporting even small self-employment income creates a work history for Social Security purposes, which can be important for your benefits later in life.

I use QuickBooks Self-Employed and it's been a lifesaver. You can link your bank accounts and it automatically categorizes expenses. It also tracks mileage if you drive for work. Around $15/month but worth every penny for the time it saves.

Thanks for bringing this up - I hadn't even thought about the corporate formalities aspect. Do you think it's still possible to create those minutes retroactively without it looking suspicious? And would a regular business attorney handle this or does she need someone who specializes in tax issues?

Creating retroactive minutes is actually a common practice when catching up on corporate formalities. The key is to be honest about the dates - you're creating the documentation now, but accurately reflecting when decisions were made. You want to document major business decisions like officer appointments, banking authorizations, major purchases, etc. A regular business attorney who works with small corporations should be fine for this - you don't need a tax specialist for the corporate formalities aspect. Many attorneys will even provide templates for these minutes to make it easier. The important thing is showing a good faith effort to comply with requirements going forward while documenting the history as accurately as possible.

Is there a safe formula for what counts as "reasonable salary" for an S-Corp owner? I've heard everything from 30% to 70% of profits should be salary vs distributions.

Thanks for this suggestion! I do work full-time though and make about $38k per year, so I don't think I'd qualify as his dependent? We split all expenses pretty evenly.

You're right - with that income level, you definitely wouldn't qualify as a dependent. The income limit for a qualifying relative in 2023 is $4,400, and you're well above that. And since you split expenses evenly rather than him providing more than half your support, that would disqualify you anyway. Thanks for the additional info! It's always good to explore all possibilities, but in this case, it looks like neither of you will get tax benefits from your living arrangement.

This! I work in property management and we definitely notice when someone is living in a unit who's not on the lease. Maintenance visits, neighbors mentioning things, security cameras in common areas, etc. The tax stuff is probably the least of your concerns.

That's a really good point about starting mid-year! So should I have more or less withheld since I'm starting in March rather than January? And I like the idea of quarterly check-ins - do you use any particular method to estimate where you stand?

Since you're starting mid-year, you'll have less annual income than your salary rate would suggest for a full year, which could actually result in overwithholding if you don't account for it. However, this might balance out with your husband's income putting your combined total in a higher bracket. For our quarterly check-ins, we use a simple method. We take our year-to-date income from paystubs, multiply our most recent month by however many months are left in the year, add in expected bonuses/commissions, then use a tax calculator to estimate our total tax. Then we compare that to how much tax has been withheld so far plus what will likely be withheld for the remainder of the year. If there's a gap of more than $1,000 in either direction, we adjust our W4s.

The IRS Withholding Estimator is good but I found it super confusing to use. It asks for so much detailed information that I wasn't sure where to find on my paystubs. Does anyone know a simpler alternative?

Thank you for mentioning this! My home country does have a tax treaty with the US. Is it too late to claim any treaty benefits since the payment and withholding already happened? Or can I still somehow claim the treaty benefit when filing my 1040-NR?

It's not too late! You can still claim treaty benefits when you file your tax return, even if the full 30% was already withheld. You'll need to fill out Form 8833 (Treaty-Based Return Position Disclosure) and attach it to your 1040-NR. On the form, you'll need to cite the specific tax treaty article that applies to your situation and explain why your moving expense reimbursement qualifies for reduced taxation under the treaty. The excess withholding will be refunded to you after your return is processed. Just be sure to keep a copy of your 1042-S and any supporting documentation showing the nature of the payment.

Which tax software would you recommend for nonresident aliens with 1042-S income? I tried FreeTaxUSA but it doesn't seem to support 1040-NR at all.

I found Sprintax to be the best option for nonresident alien returns with 1042-S forms. It's specifically designed for international students and scholars, so it understands all the income codes and treaty provisions. H&R Block's online version also works reasonably well if your situation isn't too complex. TaxAct supports 1040-NR but struggles with some of the more unusual income codes. TurboTax can work but requires more manual adjustments and verification. FreeTaxUSA unfortunately doesn't support 1040-NR at all, as you discovered. Whatever software you choose, I still recommend having someone knowledgeable review the final return before filing, especially if significant tax treaty benefits are involved.