Another option worth exploring is contacting your state's unemployment office. Sometimes they have employer information on file even when the IRS transcript is incomplete. I had to do this when filing back taxes from 2018, and the state labor department had the EINs for two companies that had gone bankrupt. Also, if your friend contributed to a 401k during that time, the plan administrator might have records with the employer information. Same goes for any health insurance he had through those employers - the insurance company may still have the employer EIN on file.

One thing nobody's mentioned yet - you should consider the statute of limitations for refunds when filing back taxes. If your friend is owed money from the IRS for 2020, he needs to file before April 2024 (3 years from the original due date) or he loses that refund forever! But if he OWES money, there's no time limit for the IRS to collect, so he definitely needs to get this sorted. Also, penalties and interest keep accruing the longer he waits to file.

Anyone else planning to amend previous returns in light of this Limited Partner Self Employment exemption ruling? My accountant says we should go back and amend the last three years, but I'm worried that would just trigger an audit.

For anyone wondering about the Limited Partner Self Employment exemption ruling, I consulted with a former IRS attorney yesterday. He believes the ruling will likely stand on appeal because it's based on a functional interpretation of the statute rather than adding new requirements. His take is that anyone who was truly a passive investor with no management role might still have grounds to exclude income from SE tax. The real targets are active participants using the LP structure primarily as a tax strategy despite material participation in the business. He suggested documenting your lack of involvement if you want to maintain the exemption - meeting minutes showing you don't participate in management decisions, time logs showing minimal hours, etc.

Don't forget about business insurance! As a contractor myself, I discovered that general liability insurance, equipment insurance, and even health insurance premiums can potentially be deducted. This saved me thousands last year. For your husband specifically in construction, he might also be able to deduct: - Professional association dues - Subscriptions to trade publications - Work gloves, boots, and specialized clothing - Temporary job site rentals (like portable toilets) - Permits and inspection fees - Subcontractor payments (if he hires help) One thing I learned the hard way: keep METICULOUS records with dates, amounts, and business purpose for everything. Take photos of receipts before they fade. The IRS loves documentation from contractors.

Has anyone used TurboTax Self-Employed for this? I'm in a similar situation and wondering if it's worth the extra cost compared to the regular version.

To clarify on the original question - I went through this exact process last year with my single-member LLC. The confusion often happens because: 1. By default, a single-member LLC is taxed as a "disregarded entity" (essentially a sole proprietorship) 2. You can elect to be taxed as an S-Corporation WITHOUT changing your legal structure 3. This is done through Form 2553, which it sounds like you already filed 4. You DO NOT need a new EIN to make this election When you call back, specifically ask to speak with someone in the Business & Specialty Tax Line who handles S-Corporation elections. The regular customer service reps often don't understand the distinction between business structure and tax classification.

Quick question - does anyone know if its to late to make the S-corp election for 2024 now? I have a single member LLC to and want to do this but haven't submitted the 2553 yet.

One thing I haven't seen mentioned yet is the holding period requirements for ESPP shares. Based on your dates (acquired 6/15/2018, sold 4/12/2021), you've met the long-term holding period requirements, which is good. If you had sold within 1 year of purchase or within 2 years of the offering date (when your ESPP purchase period began), it would be considered a "disqualifying disposition" which has different tax implications. In that case, you might have had to report additional ordinary income. Since you held the shares for nearly 3 years, you've met both holding period requirements, so you should only need to worry about the cost basis adjustment everyone's talking about. Just make sure you classify it correctly as long-term capital gains on your 8949.

I've been doing my taxes for years and ESPP reporting is consistently one of the most confusing things. Here's a simplified way to think about it that helped me: 1. When you buy ESPP shares at a discount, that discount is considered compensation (essentially like a bonus from your employer) 2. Your employer includes this "bonus" in your W-2 income the year you purchase the shares 3. When you later sell those shares, you need to increase your cost basis by that "bonus" amount to avoid being taxed twice 4. On Form 8949, you list what's on your 1099-B, then use code B to adjust the basis My tax software (FreeTaxUSA) actually has a specific section for ESPP sales that walks through this calculation. I switched to it after TurboTax kept calculating my ESPP sales incorrectly.