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.

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.

Does this calculation change if you have an S-Corp instead of a sole proprietorship? I thought S-Corp owners don't pay SE tax on all business income?

You're right - with an S-Corp the calculation is different because you're only paying SE tax (actually FICA taxes in this case) on your reasonable salary, not on all business profits. In an S-Corp scenario, the depreciation deduction would still reduce your overall business income, but may not have the same SE tax savings as with a sole proprietorship where every dollar of business profit is subject to SE tax. However, you'd still get the income tax savings from the deduction. That's why some tax professionals recommend buying and taking large upfront deductions for sole proprietors, but might have different recommendations for S-Corp owners.

Yes! I got both for my business Tesla Model Y last year. The clean vehicle credit has some income limitations and vehicle price caps, but if you qualify, it's a straight $7,500 credit on top of your business deductions. The vehicle has to be under $80K for SUVs to qualify. Just remember that the business percentage applies to the depreciation/expenses, but the full clean vehicle credit applies regardless of business use (as long as you qualify based on income, etc).

That's awesome! Do you know if leasing an EV would still qualify for these benefits? I'm not sure I want to buy outright.

That's interesting! I do have a finished basement that could potentially work as a rental. Do you have to formally declare it as a rental property or get special permits? And what about the tax implications if it's just a short-term rental (like Airbnb) versus a long-term tenant?

You'll need to check your local zoning laws and HOA rules (if you have one) before renting. Many areas require permits for legal rental units, especially if you're adding a separate kitchen or entrance. Some cities have restrictions on short-term rentals like Airbnb. The tax treatment is somewhat different between short-term and long-term rentals. Short-term rentals (less than 7 days average stay) are treated more like a hotel business than traditional rental property, which affects how you deduct expenses. Long-term rentals are simpler from a tax perspective. Either way, you'll report rental income and expenses on Schedule E. If you rent for 14 days or less per year, you don't have to report the income at all (the "Augusta Rule"), though you also can't claim rental expense deductions.

I haven't heard about the home office stipend approach. How does that work exactly? Is that something employers commonly offer?

I think I still have my last paystub somewhere! Would the numbers on it match exactly what would be on my W-2 or are there sometimes differences? And is the tax software option something the IRS accepts as official?

The numbers on your last paystub may be close but not always exactly the same as your W-2. Sometimes there are year-end adjustments or benefits that affect the final numbers. Your paystub should show your gross wages, federal and state tax withholding, and Social Security and Medicare taxes withheld. Most tax software won't let you e-file without actual W-2 information, but you can use your paystub to file a Form 4852 (Substitute for W-2) if you absolutely cannot get your W-2. This is accepted by the IRS, but you should make every effort to get the actual W-2 first as filing with incorrect information could require you to file an amended return later.

Yes, you should still file. Even if you made under the filing threshold, you may be entitled to a refund of taxes that were withheld from your paychecks. Also, cash tips are still taxable income that legally needs to be reported.