Just my two cents, but we amended our S-corp return in 2022 to fix a similar revenue reporting error where we had accidentally counted some deposits twice. Ended up reducing our reported income by about $22,000. We filed the amendment, got a letter acknowledging receipt about 8 weeks later, and then eventually got a small refund check. No audit, no questions, nothing complicated.

One thing nobody's mentioned - make sure you also check if you need to amend your STATE tax returns too! I amended my federal return and completely forgot that the changes would affect my state return too. Ended up getting a notice from the state about the discrepancy.

Don't forget that the IRS HAS to send you a Collection Due Process notice which gives you the right to appeal! This is super important because filing that appeal stops all collection activity while they review your case. You only have 30 days from the date on the letter though, not from when you receive it. I almost missed my window and would have been screwed.

From my experience, you usually get several notices before they actually levy anything. First some billing notices, then warning notices, then the official Notice of Intent to Levy (CP504 or LT11). I ignored all of them like an idiot and they eventually took $3,900 from my checking account. But it wasn't a surprise - they had warned me multiple times over about 6 months.

One thing nobody's mentioned yet - make sure you discuss who will claim any childcare expenses. My ex and I had a huge issue with this during our separation year. If you're the custodial parent and paid for childcare so you could work, you might qualify for the Child and Dependent Care Credit, which is significant. Also check if you're eligible for Earned Income Credit - the rules get complicated during separation years. And remember that alimony rules changed a few years back - it's no longer deductible by the payer or taxable to the recipient for divorces after 2019.

A word of warning - my ex and I thought we were being smart by filing separately during our separation. What we didn't realize is that if you file separately, BOTH of you have to either take the standard deduction OR itemize. You can't mix and match where one itemizes and the other takes standard. Also, if your divorce involves transferring property between you (like houses or investment accounts), don't do anything without understanding the tax implications first! Some transfers incident to divorce are tax-free, but timing matters.

One thing I learned the hard way - if you're planning to do a SEP IRA instead of a 401k, the rules are different! With a SEP, you can contribute up to 25% of your net self-employment income, but the calculation gets weird with S-Corps. For S-Corps, SEP contributions can only be made as employer contributions, and they're based on W-2 wages, not K-1 distributions. So again, your $70k would be the limiting factor. Also be careful if you have any other retirement plans through other employment - contribution limits get complicated fast.

I noticed nobody mentioned Qualified Business Income (QBI) deduction considerations in this discussion. This is another factor that might influence how you split income between W-2 and K-1. Your K-1 distributions might qualify for the 20% QBI deduction (depending on your total income and business type), but your W-2 wages don't. So increasing W-2 for retirement purposes could reduce your QBI deduction. It's yet another variable in the already complicated equation of S-Corp owner compensation planning. This is definitely an area where good tax planning software or a knowledgeable accountant is worth their weight in gold.

Everyone's talking about the Offer in Compromise, but don't forget about Currently Not Collectible status! If your boyfriend's finances are really tight right now, he might qualify to have his account temporarily placed in CNC status. The debt doesn't go away, but collections stop while he gets back on his feet. The IRS form is 433-F for individuals, and you basically need to show that after necessary living expenses, there's no money left to pay the tax debt. The benefit is immediate relief from collection activity, and sometimes the collection statute expires before they reassess your situation.

One thing nobody has mentioned is that your boyfriend should determine if he was misclassified as a 1099 contractor when he should have been an employee (W-2). If he was on the road 90% of the time doing work the company directed, used their equipment, followed their schedule, etc., he might have been misclassified. This is actually super common and if he was misclassified, he could file Form SS-8 for the IRS to make a determination. If they rule he should have been an employee, he'd only be responsible for the employee portion of FICA taxes (7.65%) instead of the full self-employment tax (15.3%). This could reduce his tax debt substantially!