IRS
CommunityGovernment Services
Can't reach IRS? Claimyr calls for you, so you don't have to wait on hold.
Claimyr is a pay-as-you-go service. We do not charge a recurring subscription.
Using Claimyr will:
- Connect you to a human agent at the IRS
- Skip the long phone menu
- Call the correct department
- Redial until on hold
- Forward a call to your phone with reduced hold time
- Give you free callbacks if the IRS drops your call
Ask the community...
- DO post questions about your issues.
- DO answer questions and support each other.
- DO post tips & tricks to help folks.
- DO NOT post call problems here - there is a support tab at the top for that :)
How to handle taxes for my online shop as a dependent?
I've been running an online shop through big cartel all of this year and I'm totally lost about handling taxes when filing season comes around. The whole thing is honestly giving me anxiety. I've made about $945 from my shop so far this year. All my payments are processed through Stripe, and I have no idea if they'll send me tax documents or if I need to track everything myself? For context, I'm still claimed as a dependent on my parents' taxes and was unemployed until around September when I got a part-time job. I'm feeling really dumb about this whole situation and mainly just want to avoid getting in trouble with the IRS or owing a bunch of money I didn't plan for. Any advice would be super appreciated!!!
Join the conversation
Late filing taxes for 3 years - considering Optima Tax Relief
I've been putting off dealing with my tax situation for way too long and it's really stressing me out. Finally talked with someone at Optima Tax Relief who gave me some answers, but after looking into it more, I'm thinking their services might be more than I can afford right now. So here's my situation - I normally use TurboTax for my returns, but for 2021 I decided to try my cousin's CPA. Somehow those taxes never actually got filed. I think there was something I needed to mail in, but I dropped the ball. Since then, I haven't filed for 2022 or 2023 either. The 2021 return showed I only owed around $365, but I have no clue what the damage will be for the other two years. I've spoken to a few local accountants, but they're all super vague about what they'd charge or how much I might end up owing to the IRS. Not helpful at all! Optima Tax Relief wants $500 for their "investigation fee" plus they said anywhere from $900-1500+ for their actual services depending on how much I owe in back taxes. That feels steep to me. Are there better options that won't cost me so much? Anyone handled something like this and found a better solution?
Join the conversation
Whatever you do, don't pay Optima or other big tax relief firms those crazy fees! I was in your exact situation (3 years unfiled) and first got quoted $3000+ from a relief company. Ended up finding a local EA (Enrolled Agent) who did all three years for $750 total. The key is finding someone who specializes in tax preparation, not tax relief. The "tax relief" industry is filled with high-pressure sales tactics and huge markups.
Thanks for the suggestion! How did you find your EA? Did you just google local tax professionals or is there a specific directory I should look at?
I found mine through the National Association of Enrolled Agents directory (naea.org). You can search by location and even by specialties like "back taxes" or "IRS representation." I'd recommend calling at least 3-4 of them for quotes and asking specifically about their experience with unfiled returns. Some will also offer free initial consultations where they can give you a ballpark estimate of what you might owe before you commit to hiring them.
Just want to add - make sure you file ASAP! The failure-to-file penalty is much higher than the failure-to-pay penalty, so even if you can't pay what you owe right away, getting those returns filed will stop the bigger penalty from growing.
This is a really important point. The failure-to-file penalty is 5% of unpaid taxes per month up to 25%, while failure-to-pay is only 0.5% per month. So filing even if you can't pay saves you 4.5% per month!
My boss created a system to avoid paying taxes on our tips - is this legal?
So I work at this restaurant and my boss just implemented this weird new tipping system. Instead of having customers tip through our regular POS system, he's set up some kind of direct tipping method where the money goes straight to us servers. The sketchy part is he specifically told us NOT to report these tips to him, and instead just handle it ourselves by reporting directly to the IRS when we file our taxes at the end of the year. I'm pretty sure he's doing this to avoid paying the employer portion of taxes on our tips. From what I understand, if I don't report my tips to my employer throughout the year, then he doesn't have to pay the employer's share of Social Security and Medicare taxes on those tips. But this feels really shady to me and I'm worried about getting in trouble with the IRS. Is this even legal? Has anyone dealt with something like this before? I don't want to mess up my taxes or be part of some tax avoidance scheme, but I also don't want to lose my job by making a big deal about it.
Join the conversation
Restaurant manager here. Your boss is playing with fire. We had a similar "bright idea" at my previous restaurant until we got audited. The IRS specifically looks for this kind of scheme in the service industry. Your employer is required to: 1. Collect your reported tips 2. Withhold income and FICA taxes on those tips 3. Pay the employer portion of FICA taxes When we got caught, the restaurant had to pay ALL back taxes plus penalties and interest. Some servers also got hit with penalties for underreporting. If I were you, I'd keep meticulous records of all your tips, report them properly on your taxes, and possibly start looking for another job with less shady practices.
Thanks for sharing your experience from the management side. Do you think I should start reporting my tips to my employer anyway, even though he specifically told us not to? I'm worried about creating conflict but also don't want to be part of something illegal.
I would absolutely start reporting your tips properly despite what your boss says. Create a simple spreadsheet or use a tip tracking app to document everything. Then submit a monthly tip report to your employer (you can find Form 4070 templates online) and keep a copy with proof of submission. If your boss pushes back, you can simply say that you're following IRS requirements to protect yourself. Frame it as something you need to do for your own tax compliance rather than suggesting he's doing something wrong. Most importantly, document everything in case questions arise later. The reality is that the IRS holds both parties responsible, but you can protect yourself by following proper reporting procedures even if your employer doesn't.
Just a tip - I use the IRS Publication 1244 which contains Form 4070 (Employee's Report of Tips to Employer) and 4070A (Employee's Daily Record of Tips). You can download it from the IRS website or order physical copies. Been in the service industry 15+ years and learned the hard way that proper documentation is your best protection. When employers try these tip reporting workarounds, servers almost always end up paying the price. Keep copies of everything you submit to your employer. If they refuse to accept your tip reports, send them by email or certified mail so you have proof you attempted to comply with the law.
Do you have to report credit card tips too? I thought those were automatically tracked since they go through the POS system. My manager only tells us to track cash tips.
US citizen having lived abroad all my life, where do I start filing taxes?
I'm a US citizen by birth but I've lived in France my entire life. Grew up there, did all my schooling there, and started my career there too. I pay my taxes to the French government regularly. From what I've been reading, I understand that I don't need to pay US taxes as long as my income stays below a certain threshold (which honestly I'll probably never hit with my current career trajectory)... But apparently I still need to ***file*** US tax returns regardless, since that's required of all US citizens worldwide. I have no idea where to begin with this. My employment history so far is pretty brief - I've worked for 3 years earning approximately €18k, €29k, and €16k so far this year in salary. (I've been job hunting since the beginning of September) Also, I've been exploring different investment opportunities here in France (since, you know, I actually live here), but I keep getting rejected from the good investment options because I'm considered a "US person" under FATCA regulations. Is there some resource where I can figure out what investment options are actually available to Americans living abroad? This whole dual-country situation is really confusing!
Join the conversation
One thing nobody's mentioned yet: If you're making under the Foreign Earned Income Exclusion amount (which you definitely are), make sure you're also looking at the tax treaties between France and the US. The treaty has specific provisions for certain types of income that might benefit you when you start investing. Also, consider opening a brokerage account with a US company that accepts foreign residents like Interactive Brokers or Schwab International. This bypasses a lot of the FATCA headaches since you're investing through US institutions rather than French ones.
Are you saying I should just avoid French investment options entirely? That seems extreme just to avoid some paperwork. Are there any decent investment options that are compatible with both French and US tax systems?
I'm not saying avoid French options entirely, but you should be selective. The main investments to avoid are foreign mutual funds and similar pooled investments that get classified as PFICs. Look into individual stocks, bonds, or ETFs that are listed on US exchanges even if bought through a French broker (though finding one that accepts US citizens can be challenging). Some French banks have created US-compliant investment products specifically for Americans living in France. Another option is to use a US brokerage while living abroad. The paperwork is much simpler for US tax purposes, though you'll still need to report the investment income on your French taxes. The US-France tax treaty prevents double taxation in most cases.
Don't forget about state taxes! Depending on which state you had as your last residence before moving abroad (or if you were born abroad, possibly your parents' last state), you might still have filing requirements there too. Some states like California and Virginia are notorious for trying to claim you as a resident even after you've left.
This isn't relevant to the OP's situation. They said they were born in France and have lived there their whole life. There's no prior state residency to worry about.
Starting a Remote Business as a Non-Resident: Which State to Incorporate for Tax Purposes?
I'm in the process of launching a fully remote business where I won't need a physical presence. My situation is a bit complicated tax-wise - I'm technically a non-resident of my home state, and also not a resident in the state I'm currently living in (might be here for 3-4 years). I'm trying to figure out the best approach for incorporation and taxes. Here are the options I'm considering: 1. Wyoming incorporation? Then file Wyoming business taxes and also file as a foreign entity in every state where I conduct business? I'm assuming I'll need to file taxes in all states where I have customers. 2. Incorporate in my home state and fulfill/ship products from there to customers? I'd pay that state's sales tax and only file in that state at year-end. Would this automatically make me a resident there though? 3. Incorporate in my current temporary state, pay taxes here, and become a resident - but this means I'd lose my non-resident status in my home state (which I eventually plan to return to). Any advice from people who've dealt with multi-state business situations would be super helpful! Trying to make the smartest choice for long-term tax implications.
Join the conversation
Another option you might consider is forming an LLC in your home state but electing to be taxed as an S-Corporation. This can potentially reduce self-employment taxes while giving you flexibility. I did this while bouncing between states and it worked well because: 1) I maintained my business entity in one consistent state 2) I could pay myself a reasonable salary and take distributions 3) I only had to deal with one state for business filings 4) Sales tax was still collected based on customer location regardless Remember that your personal tax residence and business entity location are separate issues that sometimes overlap.
That's interesting! How did you handle the "reasonable salary" determination? I've heard the IRS can be picky about that with S-Corps. And did you have to register as a foreign entity in other states where you were physically working?
For reasonable salary, I researched what someone would make in a similar role in my industry and documented my justification. It's generally accepted that 40-60% of your business income as salary is reasonable, but it varies by industry and circumstances. Yes, technically you're supposed to register as a foreign entity in states where you're physically working. However, many digital nomads don't do this for temporary stays (risky but common). I registered in states where I stayed more than 2-3 months to be safe. Some states have thresholds before registration is required, but they vary widely.
Has anyone actually tried the Wyoming route with a digital business? I did this last year and regret it honestly. The initial setup was easy but I ended up having to register as a foreign entity in 4 different states because my customers triggered economic nexus thresholds. Each state had different requirements and filing deadlines. Ended up spending way more on compliance than I saved.
Wyoming works great if you truly don't have physical presence elsewhere AND your sales don't trigger economic nexus in multiple states. I went this route for my consulting business that primarily works with clients in just 2 states, and it's been manageable.
That makes sense. My mistake was having customers spread across too many states and exceeding those economic nexus thresholds. Looking back, I should have incorporated in the state where I spend most of my time and just dealt with being a resident there for tax purposes. The complexity of multi-state compliance wasn't worth the theoretical tax savings.
Hazel Garcia
Don't forget to set aside money for self-employment tax!! This catches so many first-time sellers off guard. You'll owe about 15.3% on your net profit for social security and medicare taxes, ON TOP OF regular income tax.
0 coins
Laila Fury
This is really important! I got hit with a surprise $400 tax bill my first year selling online because I didn't know about self-employment tax. Even small businesses have to pay it.
0 coins
Geoff Richards
If you're feeling overwhelmed, the IRS has a special small business tax center with guides specifically for self-employed people: https://www.irs.gov/businesses/small-businesses-self-employed Also check if your state has sales tax requirements for online sellers. Some states require you to collect and remit sales tax even for small amounts of sales.
0 coins