Thanks for mentioning this! I've already gotten my Michigan driver's license, registered to vote, and changed my car registration. I kept my California bank account open though since they have locations in Michigan too. Should I still consider closing it to be safe?

You don't necessarily need to close the California bank account, but definitely make sure you've changed the primary address on the account to your Michigan address. Having a CA bank account with a CA address could be one factor they look at. The most important things are already done - driver's license, voter registration, and vehicle registration show your intent to permanently reside in Michigan. Also make sure your employer has your Michigan address for your W-2, and that any investment accounts are updated with your new address.

TurboTax Premium worked great for my CA to WA move. It walked me through allocating income between states and explained which income belongs where. It costs more than the basic version but worth it for multi-state situations.

Thanks for the suggestion! I don't think I qualify for EITC since I don't have kids and my income is a bit too high for a single person. I am taking the standard deduction though. It sounds like my real issue is the self-employment taxes on that gig income that I didn't plan for. Lesson learned for next year - I'll be setting aside money each month from my gig work.

Completely agree! TurboTax kept trying to upsell me to their $120 version to "maximize self-employment deductions." FreeTaxUSA found all the same stuff for like $15. And their interface actually explains things better too.

That's good to know! I felt like I was taking crazy pills when I switched and suddenly found all these deductions TurboTax never mentioned. Their basic version is practically useless for anyone with slightly complicated taxes. FreeTaxUSA actually walks you through the self-employment section with helpful explanations instead of dangling premium features in front of you constantly.

Thanks for bringing this up. I did pay the Delaware annual franchise tax for 2023, but then stopped when I abandoned the LLC. Should I have formally dissolved it with the state? As for New Mexico, I've registered for gross receipts tax but didn't think about how using the same EIN might create confusion. Would filing state tax returns in NM using the same EIN potentially trigger Delaware to think I'm still active there?

Yes, you should have formally dissolved your Delaware LLC by filing a Certificate of Cancellation with the Delaware Division of Corporations. Without formal dissolution, Delaware will continue to consider your entity active and may assess annual franchise taxes and penalties for failure to file. For New Mexico, using the same EIN shouldn't automatically trigger issues with Delaware, as they're separate state systems. However, for clarity in your records and to prevent future confusion, I strongly recommend formally dissolving the Delaware entity. It typically costs around $200 to file the dissolution paperwork, which is much cheaper than continued annual fees or potential penalties. The good news is that most states allow late dissolutions, so you can still properly close the Delaware LLC even though it's been a while since you abandoned it. This clean break will help you avoid any state tax complications while you focus on resolving the federal filing requirements we discussed earlier.

Is there a way to check if the IRS has already assessed penalties for the unfiled 5472 forms? I'm worried they might have been sending notices to my old address.

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.

That's super helpful info about the timing! So if I want this for 2025 tax year, I'd need to file the S-Corp election by March 15, 2025? What if I form the LLC now in 2024 - does that change anything with the timing?

If you form your LLC now in 2024 but want the S-Corp election to take effect for the 2025 tax year, you would need to file Form 2553 by March 15, 2025. If you plan to operate the LLC for the remainder of 2024 before the S-Corp election kicks in, your LLC would be taxed as either a sole proprietorship (single-member LLC) or partnership (multi-member LLC) by default for 2024, and then as an S-Corp starting January 1, 2025. During that interim period before the S-Corp election takes effect, you'd still be subject to self-employment tax on all profits. Many people form their LLC in Q4 of the year and then immediately file the S-Corp election for the upcoming year to minimize this interim period.

I'm in TX and we don't have the state franchise tax, so that saves a lot! My accountant says the breakeven point is around $60-70k in profit - below that and the administrative costs eat up the SE tax savings. Above $100k is where you really start seeing the benefits.